Ethiopians are facing rapid inflation

At a market in Addis Ababa on September 11, 2022 (Amanuel Sileshi / AFP/Archives)

Zerihun, who works as a porter at the expanding Merkato market in Addis Ababa, says: “All prices are rising, but our wages are not.” A finding shared by most Ethiopians in the face of an economy in crisis.

Ethiopia, one of the world’s most dynamic economies in the 2010s, has seen its growth hampered by the Covid-19 pandemic, climate disasters, the Tigray conflict that has ravaged the country’s north since 2020, and a global shock wave. war in ukraine.

Africa’s second most populous country is suffering from runaway inflation, which is expected to hit an annual average of 30% in 2022 (up from 26% in 2021), according to official statistics on food prices, among other ailments.

“Vegetables, food, rent, everything has gone up,” says Zerihun, a 30-year-old father of two, who loads and unloads trucks at Merkato, Africa’s largest open-air market.

“We work, but the cost of living makes it very difficult to survive,” says colleague Sintayeh Tadelle, 29, who has two sons, ages 12 and 6.

When asked how he is doing, this harsh, loud-voiced man answers: “May God help us.” Addis Ababa municipality also provides “uniforms and school books as well as food” in the canteen: “I don’t know how I can live without it.”

Merkato operators earn 5 birr (8 euro cents) per crate loaded or unloaded. On good days, they earn a little more than 5 euros.

“The economy is slow, there are fewer jobs ‘on the market,’ and therefore I earn less,” says Zirehun.

“It’s less alive”

Filled with shops or goods of all kinds, the streets of the Mercato are crowded with buyers, sellers, sellers and overworked workers.

But according to regulars, the market, which has thousands of shops where you can find everything from clothing to building materials and industrial machinery, as well as electronics and home appliances, has seen a decline in activity.

“People in all sectors of the market are saying the same thing: it’s less vibrant,” said Hamat Redi, 26, who mainly sells Chinese washing machines and televisions.

“Business was good 5-6 months ago, but now it’s very slow,” he continues. “With inflation, people don’t want to spend money on luxury goods,” he said.

A little further, in addition to the lack of customers, Sisai Desalegn complains about the lack of dollars to be able to import audio equipment and solar panels.

In the market of Dire Dawa, 23 October 2022
At a market in Dire Dawa, October 23, 2022 (Amanuel Sileshi / AFP/Archive)

The 30-year-old man, whose activity has decreased by 40% in two years, explains that “We don’t get enough foreign currency from the banks” because of the aggravation of this shortage.

“There are few buyers (…) we don’t make a profit and we sell at the purchase price,” he assures the father of two, reducing his daily expenses to make ends meet.

“It’s very difficult to do with what we have,” he emphasizes, “we don’t stop everything completely, but we reduce the amount or frequency of non-essentials.”

Many reasons

Interviewees at Mercato attribute the economic situation to the war that has devastated the north of the country for two years.

The end of trade with the north means fewer cars to load or unload a truck, Zerihun and Sintayeh explain. And Sisa Desalegn no longer sees her customers as merchants or farmers from the northern regions.

The conflict has strained government finances and hit sectors such as agriculture and industry hard.

By scaring off investors and foreign partners, it also contributed to the drying up of the currencies of the ultra-importing country.

Zerihun hopes that the peace agreement signed between the government and Tigray rebels on November 2 will “improve the situation”.

Water supply for displaced persons near Semera, June 7, 2022
Water supply for internally displaced persons near Semera, June 7, 2022 (EDUARDO SOTERAS / AFP/Archive)

However, the conflict aggravated the crisis that had already started with the Covid-19 pandemic. Growth – which averaged 9.7% between 2010 and 2018 – has slowed significantly since 2020, falling to 6.1% from 9% the previous year. According to the IMF, it will fall below 4% in 2022, against 6.3% in 2021.

In a country with a 75% rural population, erratic weather, particularly the drought that has ravaged the Horn of Africa, has also affected agriculture (a third of GDP), causing an explosion in food prices.

Whatever the reasons, “in the end, all this affects low-income people like us,” Zehirun can only see.

Leave a Reply

Your email address will not be published. Required fields are marked *