September 01, 2007

Ethiopia’s govt unable to check inflation - opposition

August 31, 2007 (ADDIS ABABA) — Ethiopia’s main opposition party accused the government on Friday of failing to control spiralling food prices and demanded immediate corrective measures be taken.

The opposition Coalition for Unity and Democracy (CUD) estimates that inflation stands at around 25 percent - more than double the government figure - which they said was due to sharp rises in prices of staples such as cereal and pepper.

"What is being observed in the upward spiral of prices in cereals and other consumable goods is a phenomenon that has never been witnessed at any other time in recent memory," the party said in a statement.

It added that inflation had hit the purchasing power of the majority of urban dwellers most.

Prime Minister Meles Zenawi’s government however said the inflation was due to high economic growth.

"The government recognises that currently, there is a price increase in consumer goods the causes of which are several," Bereket Simon, special adviser to Meles, told Reuters.

"The government believes this is a growth pain which can only be solved by maintaining the high growth rate the country is registering."

The economy’s growth has averaged 7 percent in the last few years and the government estimates it will expand by 10 percent in 2006/07.

Official inflation figures stand at 12 percent.

The government has intervened by providing cereals at lower prices and banned the export of food items and the Ministry of Trade and Industry plans to spend 450 million birr ($50 million) to subsidise consumer good prices further in the near future.

But the opposition says these measures should have been carried out sooner.

"Inflation is alarmingly increasing like wild fire. But the government’s attempt to control and stabilise the cost of living is too little too late," CUD said.


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