News Analysis: Minister Kassahun Goffe faces intense scrutiny as lawmakers demand accountability for price hikes, escalating cost of living

Addis Abeba – In a heated parliamentary session yesterday, Kassahun Goffe (PhD), Minister of Trade and Regional Integration, faced intense scrutiny from lawmakers over the soaring prices of essential household and food items.

Amid growing public hardship, MPs convened on 03 December, 2024, to demand explanations regarding the government’s response to illegal trading activities, which they argue are worsening the cost-of-living crisis.

Lawmakers specifically criticized the sharp increase in prices of locally produced items, challenging the ministry’s effectiveness in monitoring and controlling illegal traders and brokers. These activities, they said, are “exacerbating the cost of living” and disproportionately burdening the poorest segments of the population.

Abere Adamu is one of the MPs who expressed concern regarding the escalating cost of living in Ethiopia and its impact on low-income and fixed-income households.

He noted that the rising cost of imported goods has significantly contributed to this trend. However, Abere emphasized that the unreasonable price increases observed in domestically produced goods have had a more severe impact on the population.

As an example, he cited staple foods such as teff, wheat, fruits, and vegetables—items that are produced locally but are not sufficiently available in the market.

“Even if these food items are available in some markets, their prices are highly exaggerated, making them unaffordable for the average consumer,” Abere stated, adding that “the beneficiary of this price rise is not the farmer.”

Reminding Minister Kassahun of the rapid rise in inflation in recent times, MP Etameraw Mota emphasized that the increasing prices of essential consumer goods, such as cooking oil and sugar, are significantly affecting the daily lives of citizens.

She pointed to sugar, a predominantly locally produced commodity, as an example of a product that has experienced significant price hikes recently.

Etameraw urged the minister to clarify whether the price rise is due to decreased production.

“The price of cooking oil has increased by up to 300 birr recently,” she added.

Etameraw highlighted that public servants and low-income earners are among the most vulnerable groups affected by the escalating cost of living. 

“Unless we find a sustainable solution to this escalating cost of living, it could expose the country to more complex problems,” she warned.

Kassahun acknowledged that lawmakers’ concerns regarding the rising cost of living were legitimate, although he remarked that the inquiries “seem many.”

“It was anticipated before the reform that transitioning to a market-based exchange rate regime might have adverse effects, such as exacerbating the prices of imported commodities and causing market instability,” he explained.

However, the minister clarified the distinction between inflation and the cost of living, emphasizing that while the terms are often used interchangeably, they differ in concept and substance.

“Inflation, defined as the rate of increase in prices over a given period, has been declining in recent months,” he stated.

The minister noted that through enhanced supply mechanisms and the implementation of price control measures, the food inflation rate has been reduced from 29.2% in October 2023 to the current rate of 19%.

According to Kassahun, the cost of living relates to consumers’ purchasing power. “The government is addressing the cost of living challenges by adjusting the salaries of civil servants.”

Despite the government’s claim that civil servants received the new salary increments in their October payments, Addis Standard recently reported that many federal employees and workers in the Addis Abeba municipality have yet to see the adjustment.

Haregewoin Yimir, an MP, highlighted that despite repeated government attempts to stabilize inflation and the escalating cost of living, the problem remains to be a challenge for citizens.

She noted that the prices of food items, in particular, are rising without adequate justification, making life increasingly difficult for fixed-income and low-income earners.

Kassahun, who previously served as the State Minister of Trade and Regional Integration, was appointed by Prime Minister Abiy Ahmed in early July 2024 to lead the ministry, succeeding Gebremeskel Chala.

His appointment comes amid significant economic and political challenges in Ethiopia, which have directly impacted the nation’s trade activities, resulting in sharp price increases and a rising cost of living for citizens.

In recent years, inflation—particularly in food prices—has surged significantly, imposing severe financial strain on low-income families. The price increases have notably impacted essential items such as onions, edible oil, meat, and teff, a staple grain in Ethiopian cuisine.

As the cost of these essential food items reached record highs last year, it placed a substantial burden on individuals, especially those with fixed incomes.

In August 2023, Addis Standard published an in-depth article revealing how consumers are struggling with stagnant incomes that have shown little to no growth over the past decade.

The cost of living has further escalated since the government introduced macroeconomic reforms in late July 2024. These reforms drove up the prices of various consumer goods, prompting a government crackdown on businesses accused of price gouging and hoarding.

A survey conducted by Addis Standard at various markets in Addis Abeba following the reforms revealed significant price increases for several products, particularly imported goods and essential domestic items such as oil, sugar, and onions.

A trader at Merkato, the city’s largest market, who requested anonymity, reported that a five-liter container of cooking oil, previously sold for 900 birr, now costs as much as 1,200 birr. Similarly, the price of sugar has risen from 100 birr per kilogram to 116 birr.

During the recent parliamentary session, Kassahun stated that since the implementation of the macroeconomic reform, daily market monitoring and control measures have been actively conducted, leading to actions against traders contributing to the rising cost of living.

“Over the past five months, the ministry has taken action against 105,000 illegal traders responsible for price escalations,” he told legislators. “The outcomes of these efforts have been positive.”

Abere argued that the root cause of the rising prices is largely human-induced.

“Legal traders have been overshadowed by contraband traders, rendering them unable to operate effectively,” he stated. “Brokers also wield significant power in manipulating prices.”

He highlighted that the worsening cost of living has led to an alarming increase in street begging by the elderly and children. “Although it is not a new phenomenon, begging on the streets has become a common sight nowadays,” he remarked.

Abere further criticized the government for its lax approach to addressing illegal trade and market manipulation, accusing authorities of merely shutting down a few shops temporarily and presenting these actions as major achievements.

He directly questioned Minister Kassahun, “Is the market controlled by your office or by illegal traders and brokers?”

Despite legislators’ criticism of the government’s perceived laxity in addressing illegal trade, Kassahun asserted that the ministry has been accused of exerting undue pressure on the business community.

“However, we have opted for a balanced approach to addressing this issue,” he stated.

Kassahun also attributed the rising prices of food items, in part, to the presence of 283 “illegal” checkpoints established across the country.

Despite a government directive to dismantle these checkpoints, he noted that they have continued to proliferate for various reasons.

“These illegal checkpoints disrupt free trade, hinder logistics, and create significant economic challenges,” he stated.

Acknowledging the adverse impact of these checkpoints on the free movement of goods, logistical efficiency, and overall economic activity, Minister Kassahun urged lawmakers to play their part in addressing this pressing issue. AS