Ever since the inflation rate hit double-digit, the government has been identifying the major causes and set plans to balance control it.
Amongst the areas that the government prioritizes to work on to control the inflation rate were modernizing the trading system, stopping businessmen that cause (artificial) price hike, creating a balance between demand and supply, and the monetary and fiscal policy.
With the aim of addressing the challenges of increasing inflation, the government has been supplying food and other edible products through various cooperative agencies with a fair and minimum price to society.
In addition, as part of its effort to arrest the increasing inflation rate, the Ministry of Trade and Industry has recently announced that it is going to open around seven trade centers in every gateway to Addis Ababa.
According to Eshete Asefaw, State Minister of the Ministry, Corporate Association Unions in Amhara and Oromia will directly supply their products to these trade centers.
It has been frequently mentioned that arresting inflation could be done in many ways such as maximizing productive sectors while minimizing expenditure on wasteful products, minimizing government’s expenditure and tax exemption in areas that are not profitable and so on.
To this effect, Wondaferaw Mulugeta (PhD), Associate Professor of Economics, Faculty of Policy and Development Studies at Meles Zenawi Leadership Academy said that in order to modernize the trade system; it is a must to embrace all the retailer shops in the tax bracket. Considering the fact that an appropriate trade system is one way of arresting inflation, the government should manage the small retailer shops under one roof.
Though modernizing the trade system could be applied in many ways, he stressed that priority needs to be given to areas that should come first.
“Embracing all the retailer shops in the tax bracket is useful to modernize the trading system,” he said.
Penalizing those business people trying to amass greater profits by adding extra prices on products should be continued. In this regard, the firm actions that the Addis Ababa City Administration took on self-centered traders are crucial, Wondaferaw added.
Shiferaw Shitahun, an Economist advises that the agricultural policy has to be revised in order to fight the inflation rate caused by price expectation as having a modern and timely agricultural policy helps the country to increase production and productivity by allowing farmers not to care much about price expectations.
He said: “If it is needed to lower the rate of inflation instantly, the agricultural sector should receive priority. The nation has to take a lesson from countries like India. Most of our oilseeds are exported while we are importing edible oil and that is costly.”
The government, in this regard, should work on inward policy. The country has to strive to set up oil manufacturing companies for the domestic market while vigorously working on exporting, as to him.
The seven gateway trade centers are expected to settle the inflation rate as it leaves no room for illegal brokers as well as traders who put an extra price on products. Similarly, the consumers would benefit in (low) price and in quality since they consume directly from the producers.
The Ethiopian Herald November13, 2019
BY BETELHEM BEDLU
