6
3. 4 Hyperinflation and Sky-high Prices
As a consequence of the confluence of the devastating economic destruction by the afore-said occupation during 2007 and 2008, the terrible devaluation and hyperinflation caused by the printing of valueless paper money by the TFG and connected racketeering businessmen, the sky-high world food shortages and prices hikes, and exacerbated by the global economic recession from the last half of 2008, food has increasingly become very scarce and prices still continued to sky-rocket in Somalia destroying the meagre incomes and living standards of the masses and many millions to a situation of absolute destitution and humanitarian emergency as narrated above.
According to UN source Somalia imports 60% of its food consumption, which means that 40% is internally produced, and the price of imported food and nonfood items rose to unprecedented levels and in some instances to 383% during the 12 months prior to May 2008. The exchange rate of the Somali shilling against US$1 was continuously fluctuating between 30,000 and 34,000 – a record historic high rise of 125% rise within the 4 months before May 2008. (33) Another UN source stated that ‘price of cereals increased between 340 and 700 per cent in the last year’ that is 2007 and ‘One of the main driving factors of the crisis is the escalating civil insecurity, which is not only leading to human suffering in terms of killings, violence, human rights abuses, and population displacement’(34) in Somalia obviously referring indirectly to the policy of the Ethiopian occupation and the TFG in obstructing the humanitarian aid to reach the needy people and insecurity created by the fight between them and the Somali anti-occupation forces.Fifty two (52) INGOs dealing with Somalia declared ‘The international community has completely failed Somali civilians. The average Somali has seen price increases for food ad water of up to 1,000 per cent plunging many into worsening poverty’ – said the 52 NGOs. ‘At present, south-central Somalia is almost entirely off limits to the international staff of aid agencies.’ (35) while ‘70% of the population lacks reliable access to safe water’ (36)
The following eight tables show some examples of how the prices of some basic food items and have been sky-rocketing and Somali Shilling become devalued from January 2007 just after Mogadishu and south/central regions of Somalia haven been invaded and occupied by the Ethiopian Troops and how during the whole period of the two years of this occupation, i.e., 2007 and 2008, these prices and the Somali continued to rise and Somali shilling plummeted steeply.
Table 1: Devaluation of the Somali Shilling to the US Dollar from 2007 to 2008 (37) and last column is from UN Source: (38)
March 2006
Exchange rate of Somali Shilling to US$1
13,400
February 2007
=
15,000
March 2008
=
25,000
July 2008
=
35,000
May 2008
=
30,000-34,000
Table 2: Some Anecdotic Data Drawn from UN Source: (39)
Some basic food Items
Place
Price in So.Shs per Kg.
Period
% Rise
Sorghum
Baidoa
6,666 -9,833
Jan-April’08
201%?
Wheat flour
Hudur
April’07 –April’08
146%
Sorghum
Baidoa
April’07
379%
Sorghum
Hudur
April’07
383%
White Maize
Central regions
Jan-April’08
167%-390%
Sorghum
Baidoa
5,150
April’08
Sorghum
Bardera
3,600
April’08
Sorghum
Hudur
7,250
April’08
Sorghum
Belet Weyne
7,500
April’08
Sorghum
The two Shabelle Regions
7,111
April’08
Sorghum
Central regions
10,000
April’08
Wheat flour
Baidoa
April’08
176%
Drum of Water
Hawd area
80,000-100,000
March’08
Drum of water
Sool and Sanaag regions
120,000-150,000
March’08
Table 3: Average Retail price of Rice in selected Markets, Jan.’07 Compared to April’08 from UN Source (40)
Market
April 2008 price So.Shs.
Compared to Jan.2008 price in So.
% Change
Afmadow
27,250
8,000
241
Merka
27,000
5,875
359
Jamame
25,500
6,500
292
Mogadishu
24,750
6,000
313
B/Weyne
28,250
7,000
304
Dusa Mareb
25,000
8,000
213
Galkayo
24,000
6,600
264
Jowhar
28,000
6,500
330
Burao
12,500
7,000
79
Erigavo
29,500
6,500
354
Table 4 :Comparison of Data of prices Rises of Five Basic Food Items collected from inside
Mogadishu in January 2007 and January 2008 (41)
S/No.
Basic food Item
Unit of Measurement
Price of January 2007 in So. shs.
Price in January 2008 in So.shs.
% Rose
1.
Sugar
50 Kg.
200,000
650,000
225%
2.
Flour
50 kg.
200,000
650,000
225%
3.
Rice
50 kg.
250,000
700,000
220%
4.
Carton of spaghetti
10 kg.
70,000
240,000
243%
5.
Cooking Oil
10 litres
300,000
540,000
80%
6
Powder milk
2.5 kg tin
200,000
440,000
120%
Table 5: Comparison of Data of prices Rises of Five Basic Food Items collected from inside Mogadishu in
price Rises of Five Basic Food Items in January 2007(42) and January 2009 (43)
S/No.
Basic Food Item
Unit of Measurement
Price in January 2007 in So. Shs.
Price in Jan. 2009 in So. Shs.
% Rise
1.
Sugar
50 kgs.
200,000
800,000
300%
2.
Flour
50 kgs.
200,000
950,000
375%
3.
Rice
50 kgs.
250,000
1,250,000
400%
4.
Spaghetti
10 kgs.
70,000
450,000
543%
5.
Cooking oil
10 litres
300,000
540,000
80%
Table 6: Comparison of Data of Nine Basic Food Items collected from inside Mogadishu in Jan 2006 and
Jan 2007 (44)
S/no.
Item of food
Unit of Measurement
Price in Jan.2006 in So. Shs.
Price in Jan. 2007 in So. Shs
% change
1.
Sugar
50 kgs.
70,000
80,000
14.3%
2
Wheat Four
50 kgs.
50,000.
60,000.
20%
3
Rice
. 50 kgs.
60,000
550,000
817%
4
Spaghetti
10 kgs.
105,000
100,000
-4.7%
5
Cooking oil
10 litres
130,000
140,000
7.7%
6
Maize
100 kgs.
80,000
80,000
0%
7
Wheat
100 kgs.
60.000
70,000.
16.7%
8
Beans
100 kgs.
140.000
160,000
14.3%
9
Milk powder
9 kgs.
5000.
5,000
0%
Table 7: Comparison of Data of Nine Basic Food Items Collected From Inside Mogadishu in Jan 2007
and Jan 2008 (45)
S/no.
Item of food
Unit of Measurement
Price in Jan. Jan 2007
In So. Shs.
Price in Jan. 2008 2008 in So. Shs.
% change
1.
Sugar
50 kgs.
80.000
280.000
250%
2
Wheat Four
50 kgs.
60,000.
260,000
333%
3
Rice
. 50 kgs.
550,000
330,000
-40%
4
Spaghetti
10 kgs.
100,000
520,000
420%
5
Cooking oil
10 litres
140,000
300,000
114%
6
Maize
100 kgs.
80,000
250,000
213%
7
Wheat
100 kgs.
70,000
100,000
43%
8
Beans
100 kgs.
160,000
490,000
206%
9
Milk powder
9 kgs.
5,000
6,000
20%
A comment of the Above Table
Table 8: Comparison of Data of Nine Basic Food Items Collected From Inside Mogadishu in Jan 2008
and March 2009 (46).Tables 1 – 7: mostly show sky-high increase of prices except price of spaghetti
in Table 6 and of rice in Table 7. But Table 8 mostly shows slight drops of prices or moderate prices rises of food items in 2008 except wheat and milk powder. Such slight drops or moderate increases of prices might either mean temporary release of food items from hoarding, or a decrease of the purchasing power of the people, and/or more humanitarian food temporarily saturating the market.
But prices of all these basic food items are still unusually very high compared to those of 2007 and 2008.
