The proposed budget of Ethiopia for the next fiscal year was tabled to the parliament on Thursday, June 14, 2018. This comes a week after the Council of Ministers had approved the 12.8 Billion dollars (346 .9 Billion Birr) budget for the coming financial year. This is 3.6% higher than the current fiscal year’s budget.
Such a growth rate is the lowest in two-decades and is a part of the government’s plan to reduce public expenditure and narrow the budget deficit. According to the International Monetary Fund (IMF), this stood at four percent of the nation’s GDP.
The rate where the newly approved budget grew is also three times higher than the progress witnessed in the previous financial year. Specifically, the current financial year’s budget is at 16.9% higher than that of the 2016/17 fiscal year.
About 91.6 Billion Birr of the proposed budget is allocated for recurrent expenditures, while 113.6 Billion Birr and 135.6 Birr is proposed to capital expenditures and subsidized regional states respectively. The remaining six Billion Birr is allotted to implement the Sustainable Development Goals. The lion share of the bill will be covered by tax revenues, accounting for around 61% of the total budget. The rest would be sourced from non-tax revenues, foreign aid and loans.
More than half of the budget will be used for infrastructure developments including, road, education, agriculture, water, health and rural electrification projects. Amongst all federal institutions, the Ethiopian Roads Authority and the Ministry of Urban Development & Housing will receive the highest budget. They are followed by public universities.
The new budget has been delegated to the Standing Committee of Budget and Finance for further discussion. It is expected to be approved within the next three weeks before the parliament recess.