ethiopiantimes

November 14, 2011

Ethiopia: Trade ministers sacked

Filed under: Ethiopia — ethiopiantimes @ 8:57 pm
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he Ethiopian government has given its trade ministers the boot following a widely criticised price cap strategy that was introduced in the country at the beginning of the year to control inflation.

MAP OF ETHIOPIA

The Prime Minister, Meles Zenawi’s Office sacked Trade Minister, Abdurahman Sheikh Mohammed and Minister of State for Trade, Ahmed Tussa over the weekend only fifteen months after the two were appointed into office.

It was reported that recently mounting public discontent over the introduction of the price cap, in January and which was revised in June, triggered the move.

A trade ministry price cap on 18 basic commodities at the beginning of the year was blamed for market instability that saw the country’s inflation soar to around 40 per cent.

Consumers and traders also criticised the government over its decision to impose the price cap as well as their lack of ability to effectively enforce it.

The Ethiopian government has vowed to take various measures to minimise the inflation level.

Under the new measures the government will stop borrowing from the central bank and also subsidise certain basic commodities like wheat and oil.

Both the World Bank and the IMF have said that the inflation could have a negative impact on the country’s economic growth.

The international lenders have predicted that the 40 percent inflation will cut the 11 percent growth projection for the year 2011/2012 by half.

But the Ethiopian government says it can reduce the inflation to a single digit.

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