COVID-19: Over 25, 000 Businesses Penalized for Price Gauging, Hoarding

ADDIS ABABA – The number of businesses penalized for illegal dealings since the start of the COVID-19 pandemic has reached 25,000, according to Ministry of Trade and Industry.

These businesses have been accused of market manipulation activities including gouging prices, hoarding, among others, since the start of March.

Officials said the prices of some essential items in several parts of the country skyrocketed at the back of coronavirus pandemic.

The accused businesses were trying to exploit customers who started to panic buy and started to overcharge citizens, said Melaku Alebel, minister of trade and industry, during a press briefing today.

Initially, officials acted upon 7, 500 businesses that failed to heed their advice.

That number has now increased to 25, 000. The ministry said today it shut down 13, 350 shops, revoked 900 business licenses, and gave warning 10,000 business owners, that were in illegal activities ranging from selling substandard items to gouging price. 

Business owners that committed grave crimes were taken to courts and faced justice, trade minister Melaku said, adding that at least 424 people have been sentenced to various prison terms.

Stabilizing role

Among the essential items that have been subject to business manipulation during the COVID-19 outbreak in Ethiopia are hygienic and sanitary products.

Apart from works to keep substandard items from the market, the ministry said it is supporting local manufacturers’ capacity to produce more and substitute imports.

“There are major signs that local factories are managing to increase their capacity,” Melaku said. “They have produced around 3 million liters of sanitizer since mid-March.” 

The minister said, with the government stepping up its support, their capacity “has increased so much” that they may start exporting the products.

A total of 100 million U.S. dollar has been allocated to support detergent and soap manufacturers. At least 43 firms have been identified for support, Melaku said adding that they “will be able to get the necessary raw materials” to bolster their production.

The country currently produces at least 2.25 million Kilograms of soap and 100,000 litter detergent are per day.

“One advantage of our COVID-19 response is, it is helping us to know our local production capacity and the demand,” said Melaku. Support will pour into the sector and accelerate the import substitution effort, he added.

Meanwhile, the ministry of trade and industry also said the government would also support firms that ramp up production of personal protective equipment (PPE) especially surgical face masks. 

Over 80 firms have been identified for face masks production, Melaku said, as part of the government’s effort to avail the much-needed PPE during the coronavirus pandemic.

Seven factories have already started production with some shifting their regular production operations following the government’s call for firms in Ethiopia to step in.  

Companies in Ethiopia are producing 10,000 face masks per day with an immediate plan “to increase to 50,000 per day”, according to government officials.

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By Sisay Sahlu

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