Ethiopian Confederation of Trade Unions (CETU) has, on April 7, 2022, held its 48th regular conference in Addis Ababa. President of CETU, Kassahun Follo stated that employees and workers have been encumbered with unbearable cost of living soaring with time, which is indescribably contrary to the stagnant amount of income most employees are literally earning in their day to day toiling.
Voicing CETU’s statement, the President stated that following the broke out of COVID-19, the protracted war in Northern Ethiopia and the recent conflict between Russia and Ukraine have all exacerbated the living condition of employees. Let alone saving, the volatile inflation is vying to devour their daily income and bread.
Inflationary pressure has been one of the relentless economic woes over the past decade and a half making Ethiopia home to one of the top 10 inflationary indices in the world. In line with this, Global Agricultural Information Network (GAIN) on March 10, 2022 reported that Ethiopia’s inflation rate remains persistently high, reaching 33.6 percent in February 2022, which is by one percent lower than the one recorded in January 2022.
GAIN said headline inflation in Ethiopia (measure of the total inflation within an economy, including commodities such as food and energy prices, for example, oil and gas, which tend to be much more volatile and prone to inflationary spikes) has been swinging between double digits over the past couple of years.
The major factors driving food inflation are spikes in price of cooking oils, non-alcoholic beverages, bread and cereals, dairy, and meat products, among others. Weak domestic market supply due to agricultural production constraints and continuous devaluation of the local currency are among the major factors contributing to the utterly high inflation levels.
It said although the Ethiopian government took various policy actions including monetary, fiscal, and structural measures to control price escalations, the inflation levels remain in the double digits.
Following the unbearable living condition of the poor and their outcry, Addis Ababa City Administration has been hyping a lot on taking drastic measures to curb the mal-practice of illegal merchants and hoarders. These agents are alleged to have created man-made scarcity of supply by making unjustifiable increment of prices, collusion and inflicting distortion on healthy transaction meant to destabilize the economy.
It said a task force comprising the federal government and the city administration has been established to oversee and monitor such sabotages. But can it answer the immediate demand of individuals to ease the burden of inflation? Is it feasible to restrain the scaling up of prices by scooting from shop to shop and undertaking monitoring and controlling activities of merchants in every corner? No, never!
There are several exigent actions that should be taken in response to this question of existence. To begin with, the government can levy new taxes against the wealthier citizens so as to provide more facility support for the poorer. Secondly, the government should formulate plans to help supplies reach the masses properly. Since inflation is a factor that increases bit by bit and spirals out of control to eat in to people’s daily expenses and reduce their spending power, the government can and must keep the cost of living at an acceptable level if it can keep tight led on inflation.
Secret in public, the lasting solution to cure inflation is enhancing productivity of goods and services and alleviating scarcity of goods by setting equilibrium between demand of consumption and supply.
In this day and age, there is a worrying trend that the cost of living keeps increasing for individuals worldwide. From my perspective, although some problems have arisen as a result of the rise in the price and shortage of petroleum, most of the hindrances that are causing inflation at home are caused by greedy actors and unworkable domestic polices and trade-related systems. Hence, the government is highly anticipated to stabilize the razor-edge situation of the current inflation and undertake exigent tasks to control price hiking being caused by illegal and unreasonable actors.
Editor’s Note: The views entertained in this article do not necessarily reflect the stance of The Ethiopian Herald
BY FEKADU W.
THE ETHIOPIAN HERALD THURSDAY 14 APRIL 2022
