Federal and regional authorities continued punitive measures against traders accused of price gouging this week as the government seeks to curb inflation following the depreciation of the birr currency.
In an operation now in its 12th day, government officials have shut down 3,512 businesses for illegally raising prices, according to a statement from the Ministry of Trade and Regional Integration. A further 38 traders have been detained and face criminal charges.
Some 2,095 other companies have been accused of hoarding essential goods and preventing them from reaching the market. Officials say cracking down on such practices is necessary to stabilize prices in the wake of the birr's floatation against major foreign currencies on July 29th.
Over 24,000 traders who were initially suspected of abusive pricing have been allowed to reopen after pledging to respect official guidelines. The government has insisted there is no economic justification for widespread price hikes given that the black market exchange rate was already being used by many importers before the currency reform.
Wholesale and retail sellers of construction supplies have come under especially heavy scrutiny during the enforcement push as stabilizing prices in this supply chain is critical to infrastructure projects and housing affordability.
Inflation has soared since the birr lost roughly 77 percent of its value after the central bank removed its peg to the U.S. dollar. The administration of Prime Minister Abiy Ahmed hopes containing costs of basic necessities will help manage public anger over the currency move and its impact on living standards.