Scholars Urge Short, Long Term Remedial Measures to Curb Soaring Inflation - ENA English
Scholars Urge Short, Long Term Remedial Measures to Curb Soaring Inflation
Addis Ababa, July 12/2021(ENA) The strategies introduced by the government of Ethiopia to intensify efforts with a view to improve supply of goods, agricultural productivity and enhance import substitution would be vital instruments to curbing the soaring inflation if they are swiftly and effectively implemented, scholars of economics underlined.
Prime Minister Abiy Ahmed last week told the Parliament that the rising inflation has been one of the challenges of Ethiopia’s economic development over the past years.
Scholars of economics on their part suggested that more effort is expected to be implemented by the government and other actors to control the inflation and stabilize the economy.
According to them, the strategies introduced by the government to improve supply of goods, agricultural productivity and enhance import substitution would be vital instruments to curbing the soaring inflation if they are swiftly and effectively implemented.
A Lecturer at the Addis Ababa University, Berehanu Denu told ENA that modernizing the domestic trading system is very critical to control inflation for one of the reasons of inflation is shortage of supply deliberately created by some of business community to amass profit.
He noted that currently the Ethiopian trading system is under the control of few people who manipulate the price and supply of basic consumer goods by hoarding and stockpiling of goods as well as other illegal activities.
In addition to taking legal measures to control these illegal traders, Berhanu urged the government to intensify its effort to enhance the supply side of the economy in order to help control the inflation.
In this regard, the Cooperative Unions operating in the country should be given the necessary financial and technical support in order to help them provide the adequate service to the consumer, he underlined.
“The government should work on stabilizing the economy. This begins with enhancing the supply side of the economy. In this regard Cooperative Unions should be strengthened both in terms of finance and capacity. In order to tackle the man-made shortages of supply, these Unions are vital instruments and must be one of the utmost priorities of government strategy to curb inflation in the country,” he said.
He further pointed out that improving agricultural productivity by modernizing the sector should also be considered as the other remedy to fighting the inflation and enhances national economy.
Economics lecturer at Civil Service University Nazid Nassir urged that reducing the cost of the government and limiting currency in the economy can help to control the inflation for the time being.
However, he stressed the need to be cautious in this regard for such strategies might cause reduction in the overall GDP and increase unemployment.
According to Nazid, measures to enhancing import substitution should also be intensified with a view to help the nation fight inflation related with imported goods.
“We should work on products that can substitute imports. In this way we can succeed in two things. The first one is we can control the inflation related to lack of foreign exchange and the second is we can provide additional supply for domestic economy’, he said.
The Scholars advised the government to be proactive to take swift concrete steps to lower the soaring inflation and stabilize the economic activities in the country in its short term plan.