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From: Biniam Tekle (biniamt@dehai.org)
Date: Wed Aug 10 2011 - 08:40:57 EDT
http://www.voanews.com/english/news/africa/Ethiopian-Food-Prices-Up-Nearly-50-127316328.html
August 09, 2011 Ethiopian Food Prices Up Nearly 50 Percent
Peter Heinlein | Addis Ababa
Ethiopians awoke Tuesday to news that food prices had increased nearly 50
percent over the past year. They didn’t need to be told. Even middle-class
Ethiopians are finding it more difficult to feed their families.
Ethiopia’s annual inflation rate jumped to nearly 40 percent in July. The
Central Statistics Agency says food prices, which comprise more than half
the Consumer Price Index, were up 47.4 percent from a year ago.
In local markets, faces were glum, but few were willing to talk about their
condition. One shopper, who gave his name as Geremew, simply held up the
thick wad of birr, the Ethiopian currency, that he was holding as he waited
to pay for a small basket of food.
Mansour Mohammed, a grocer in central Addis Ababa, says prices of essentials
such as cooking oil have risen much more than the average, forcing consumers
to switch to cheaper alternatives. "People say that’s expensive. Once you
[could] buy vegetable oil 20 birr, [approx.$1.25] now it’s 60 birr ($3.75).
It’s almost 200 percent increase. But you can change. Instead of vegetable
oil you can use palm oil," he said.
The statistics agency says transportation costs and housing were up more
than 40 percent during the past year. The price of a liter of gasoline stood
at 21 birr this week, a massive increase despite government promises to keep
inflation in single-digit territory.
When prices began to shoot skyward earlier this year, the government imposed
price controls on a number of items and began selling sugar and cooking oil
directly to consumers. But the controls led to shortages, and were dropped
after infuriating shop owners and failing to ease inflationary pressure.
While the price caps were in place, shopkeepers were accused of keeping
goods off the market until prices rose. But after the controls were
removed, shortages continued and prices surged.
Government economists say the inflation rate is being driven largely by the
drought that is crippling food production in parts of the Horn of Africa.
But others, such as opposition leader and former World Bank director Bulcha
Demeksa, says factors such as government land policy and corruption are just
as much to blame.
"The farmers are not producing enough. There is commotion in the
agriculture sector. Commotion meaning the farmer’s mind is not at rest. He
is not even sure whether the local officials are going to take his
particular plot or not. These are people who take a small bribe and take
land from one and give it to the other, and [so] people do not produce as
much. The population is increasing; production is not increasing because of
government land policy," Bulcha said.
Government statistics indicate more than 13 million of Ethiopia’s 80 million
people will receive some sort of nutritional assistance this year. About
4.5 million are in urgent need of help, and emergency food stocks are
stretched by the arrival of an additional 150,000 refugees from
famine-stricken Somalia.
Despite the difficulties, the government is predicting economic growth of 11
percent this year. The International Monetary Fund says inflation troubles
are likely to cut that figure by half.
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