Ethiopia to increase importation of food products to ease inflation

ETHIOPIA – Ministry of Finance in Ethiopia is set to issue an Expression of Interest (EoI) inviting foreign companies, who are interested in supplying wheat, edible oil and sugar to the country to ease the burden of souring inflation rate.

The Ministry will evaluate the proposals that will be presented by the companies and shortlist those that qualify, after selections by a committee composed of representatives from the National Bank of Ethiopia (NBE), Ministry of Finance, Ministry of Trade and Industry and the Ethiopian Investment Commission.

ADVERT

Upon selection, the companies will be licensed to wholesale the food items to the local market.

Inflation rate on food items was reported to have reached 19.6 percent in June and 20.1 percent in July 2019. Similarly, the prices of edible oil and sugar have increased in the past successive months.

According to the Central Statistical Agency’s price index report, which was published in August 2019, the headline inflation reached 15.6 percent, a record high in five years’ time.

Few local private companies have dominated the import of edible oil. Through competitive bid process the foreign companies will be able to wholesale wheat, edible oil and sugar to the local market through government distribution channels.

ADVERT

The Ethiopian government buys wheat, edible oil and sugar through competitive bids and distribute to the public with subsidized prices.

Recently the government imported 3M litres of refined sunflower oil and 30M litres of palm oil from the Indonesian Company, Pacific Interlink through the Ethiopian Industrial Inputs Development Enterprise.

In addition to that they imported four million quintals of wheat to combat the galloping inflation.

Currently, Ethiopia spends annually around one billion dollars on wheat and fertilizers imports.

The Ministry of Agriculture has announced plans to end wheat import by introducing mechanized farming and helping small-scale farmers engage in irrigation agriculture.

In Mid-October, the Ministry of Water, Irrigation & Energy began the construction of three irrigation dams in Oromia Regional State, Southern Ethiopia at a total cost of 4.9 billion Br (US$167m).

This is an added investment to the Lowland wheat initiative in the lowland basins i.e Awash, Wabeshebelle and Omo regions set to cover more than 132,000 hectares to ensure food self-sufficiency and improving the livelihoods of Ethiopian smallholders’ farmers.

In addition to that the International Fund for Agricultural Development (IFAD) signed an agreement with the government to fund the Lowlands Livelihood Resilience Project by injecting US$451m funded through a combination of debt and grant.

The Lowlands Livelihood Resilience Project is aimed to increase resilience to climate shocks in the communities at the lowland areas of Ethiopia who are dependent on rain fed agriculture and pastoralism thus highly vulnerable to droughts, desertification and floods.

Leave a Reply

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

This site uses Akismet to reduce spam. Learn how your comment data is processed.