Ethiopian Government Cracks Down on Price Gouging After Currency Float

Local governments in Ethiopia have ordered the closure of several businesses for hiking prices on essential commodities post-currency float. The Ethiopian birr devalued by 28% against the dollar, prompting price surges, particularly in cooking oil. While the currency move secured IMF funding, it risks harming the poor with price inflation.

At least two Ethiopian local governments have mandated the closure of dozens of businesses that hiked prices of basic commodities after the central bank floated the national currency, officials revealed on Thursday.

The Ethiopian Birr weakened by 28% against the dollar after the central bank adopted a market-determined foreign exchange rate to secure a new International Monetary Fund lending programme and address debt restructuring.

"The businesses were caught making unreasonable price increases mostly on food items... The stocks were imported before the new exchange rate," said Sewnet Ayele, a spokesperson for the Addis Ababa City Trade Bureau. Sewnet disclosed that 71 businesses faced closure orders, while in Oromiya region, 19 businesses were shut down and three individuals detained, according to Meseret Assefa, head of the Trade Bureau of Oromiya.

(With inputs from agencies.)