Addis Ababa Supermarkets Hoard Products to Raise Prices

Many supermarkets in Addis Ababa are hoarding products in warehouses and only selling small quantities in their stores. Addis Ababa government has launched a crackdown on traders who are raising prices or hoarding. To escape punishment by city authorities, the traders are selling small quantities of commodities only. Consumers who want to buy in bulk must pay inflated prices for products they are told to pick from warehouses.

Ethiopian birr has lost more than 90% of its value in the last ten days. The devaluation of birr happened as a result of macro economic reforms introduced by the Ethiopian government. The government linked the foreign exchange rates to open market which led to immediate fall of birr against dollar. Prices of commodities increased as a result and customers are forced to pay more for basic commodities and some businesspeople are hoarding.

In Merkato, the capital’s biggest open-air market, guards are stationed in an attempt to keep businesses from raising prices. Last week, police officers raided some warehouses and confiscated 800,000 liters (210,000 gallons) of edible oil they later distributed to local cooperatives, which offered it at previous prices. More than 3,000 stores accused of hoarding have been shuttered across the country.

On Sunday, the Ethiopian Ministry of Trade announced that 217 businesses had been closed down in one day for price hike. Most of these businesses were dealing in building materials. The authorities completely revoked the operating license of one business and shut down eight others for storing products, which led to three of those businesses losing their licenses.

Many of the businesses that were closed for breaking the law are now back in operation. A total of 27,078 businesses have reopened. 122 out of the 430 traders who were arrested have been released.

Ethiopian Ministry of Trade Closes 217 Businesses by Today