There is an Ethiopian saying which roughly goes, “Even a grave can be cozy if one has to live there.” How long will we Ethiopians keep on using this saying to console ourselves and make our lives bearable in the face of the current escalating cost of living?

We need to understand that let alone a grave even the living room cannot be cozy when life becomes expensive. Record fuel prices on the international market are causing havoc everywhere. It is not only the transport sector but also industries which depend on fuel or fuel products which have been severely affected by the soaring petroleum price.

As in other parts of the world, the rise in the price of fuel has resulted in the rise of the Ethiopian inflation index. But the hike in the price of fuel is not the only factor accounting for the surging inflation.

There are a number of things that the government needs to do to bring down the level of the inflation to an acceptable level. First, it should make the appropriate effort to explain to the public about the rise in inflation induced by sky-high fuel prices. It is imperative to make it clear that Ethiopia is not immune to the vagaries of world markets. The public will understand that it is beyond the government’s ability to control international events/situations which drive price increases.

Second, the government must acknowledge that some of its policies contribute to exacerbating the rising inflation and act accordingly. In this regard, the levying of surtax is worth mentioning. We have no objection with imposing a surtax on luxury goods as the revenue it generates can be put to use in development endeavours. Nonetheless, it should be clearly delineated what types of goods constitute luxury goods. For instance, surtax is levied on imported formula milk. It is not difficult to figure out that formula milk is not a luxury item. That is why the government ought to revise its policy regarding surtax.

Third, it should set a ceiling on the price of essential goods so as to protect the public from the actions of greedy merchants. The principles of free market do not rule out the imposition of price control on essential goods. That is why, for instance, the retail price of fuel and fuel products is set by the government and not dealers. A similar approach should be also used for other vital goods. Anyone who sells these goods for a price above that determined by the government should pay the penalty.

 Fourth, production must be stepped up. When supply increase as a result of higher production, prices will go down. It is possible to raise the production of foodstuff, for example, by introducing a policy framework which provides incentives to producers. If the private sector is unable to produce essential goods at the desired level, the government should step in and fill the gap. Large-scale commercial farming should be encouraged as one component of the strategy to boost production.

Fifth, the government should provide the necessary assistance towards establishing and strengthening consumers associations. The government alone cannot control prices; it needs the support of the public. It can better gain the public’s support when the latter is organized.

Sixth, preparations and forecasts need to be made with a view to being able to deal with events that can lead to a rise in inflation. It may be argued that the government is undertaking this task through the Disaster Prevention and Preparedness Agency. However, the scale of the problem is such that it is beyond the capability of a single institution. The public should not panic whenever a temporary decrease of essential goods occurs.

Seventh, the creation of jobs and increasing income should also be given due regard to help the unemployed and the low-income group to cope with the rising cost of living.

The issues we have addressed above, we believe, are of paramount importance. What impels us to be more concerned and devote greater attention to the problem at hand, though, is the delay in the seasonal belg rains. This delay will entail a shortage in the supply of food for humans and grass for animals, thereby aggravating the plight of those affected by the growing inflation. This makes it imperative to take the necessary precautionary measures well ahead of time.

Policies can do miracles. Let’s strive to improve our lives by formulating the appropriate policies and implementing them properly. This way we can make our life that much better.