ADDIS ABABA – Two Ethiopian regional governments have ordered the closure of dozens of businesses accused of hiking prices on essential goods following the central bank’s decision to float the national currency, officials said on Thursday.
The Ethiopian birr weakened by 28% against the dollar this week after the central bank adopted a market-determined exchange rate, a move aimed at securing a new International Monetary Fund (IMF) lending program and advancing debt restructuring efforts.
“The businesses were caught making unreasonable price increases mostly on food items … The stocks were imported before the new exchange rate,” said Sewnet Ayele, spokesperson for the Addis Ababa City Trade Bureau.
In Addis Ababa, authorities have shut down 71 businesses. In the Oromiya region, another 19 businesses were closed and three people detained, said Meseret Assefa, head of the Oromiya Trade Bureau.
“Those whose businesses are closed were the ones who increased prices on items just immediately after the (exchange rate) announcement,” Meseret said.
Cooking oil prices have surged by 25%, or 300 birrs, according to a trader in Addis Ababa who requested anonymity. Other staples, such as rice, have also seen smaller price increases, the trader said.
While the removal of foreign exchange trading restrictions is expected to help Ethiopia secure IMF support and funding from other creditors like the World Bank, some analysts warn that the resulting price hikes could hit the poor hardest.
Government officials and development partners argue that liberalizing the exchange rate will enable the private sector to contribute more significantly to the economy, boosting long-term growth.
However, the immediate impact has sparked public concern and prompted swift regulatory action.
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