The lofty ambitions of former Deputy Mayor Takele Uma to safeguard Addis Abeba’s most vulnerable residents from rampant inflation are at risk of crumbling, facing an acute wheat shortage that has brought an industrial bakery to a standstill for over a month.

An audacious project spearheaded by Takele, the Sheger Bread & Flour Factory was designed to provide low-cost bread to those affected by the soaring cost of living. The plant, nestled within the manufacturing arm of the Midroc Investment Group, found itself struggling to maintain production as the price of wheat surged. Both the Group and the Mayor’s Office stepped up to the plate, providing subsidies of 0.36 Br and 1.14 Br for a loaf, respectively, to maintain production levels in an environment of price escalation.

Operating from a sprawling 4.1hct facility in the Aqaqi-Qality District, the bakery was constructed for 900 million Br. It is capable of churning out 1.6 million loaves of bread a day. The plant, a feather in the cap of the MIDROC’s Horizon Plantations Plc, had been sustaining its production by buying wheat at around 3,000 Br of a quintal supplied by the city’s Trade Bureau. However, the sudden leap to 5,000 Br a quintal caused tremors in its operations, forcing its managers to pass on the increased cost to consumers, according to Seid Mohammed, the head of MIDROC’s corporate communication.

“We transferred the additional cost to the consumers,” Seid from MIDRIC told Fortune.

The situation escalated when the Trade Bureau failed to meet the bakery’s wheat demands, suspending production entirely and leaving a workforce of 390 idle. Seid noted that these workers were temporarily reassigned to other areas of the Group’s business while the plant sought to acquire 100,000qtl of wheat through a bidding process to resume production.

Sheger’s parent company, the Midroc Investment Group, is owned by Mohammed Hussein Al-Amoudi’s (Sheikh) family. It has business interests across various sectors and industries, including agriculture, manufacturing, mining, construction, and hospitality. Over the last 25 years, the Group has built a formidable presence in Ethiopia, with Sheger representing its contribution to corporate social responsibility. The plant is one of 11 bakeries established across the regional states recently.

Bereket Tekle from the Addis Abeba City Administration’s Mayor Office Press Secretariat confirms that the closure of the bread shops is due to a wheat supply shortage but admits a lack of details. Mayor Adanech Abiebie announced an allocation of 300 million Br to tackle the problem while addressing the City Council that met recently.

“There is a need to work hard to address the challenges that persist in the wheat supply,” she told councillors.

The federal government’s belief in Ethiopia’s self-sufficiency in wheat production has led to a termination in imports despite the harvested wheat for 2022 falling significantly short of the country’s annual demand of 97 million quintals. Data from the Central Statistics Agency reveals that 52.1 million quintals of wheat were harvested from 1.6 million hectares of land during the Meher season.

The decision to stop imports has been met with scepticism, with officials from the Addis Abeba Trade Bureau suggesting it merely diverts the attention from the central issue rather than addressing it. Biniyam Alemayhu, the head of the Bureau, said that they previously sourced supplies through the Ministry of Trade & Regional Integration (MTRI) until the focus shifted to local production.

The Bureau used to supply around 30,000qtl of wheat a month to the bakery that demands 1,200qtl of flour daily. While Biniyam does not acknowledge the shortage of bread in the city, he believes there is enough domestic production to supply bakeries.

“They’ll buy from the local market,” said Biniyam.

He lauded providing additional 25 bakeries throughout the city, with 16 expected to start operation and produce 1.2 million bread loaves a day.

“This is what we can do,” Biniyam told Fortune. “After all, the city is not a producer but a consumer.”