Abrham Tekeste (PhD), Ethiopia’s Minister of Finance and Economic Cooperation, proposed a 320.8 billion Birr budget for the coming fiscal year. The budget the Minister tabled for the House Peoples’ Representatives on Thursday, June 8, 2017, was 17 percent higher than last year’s.

It is to be recalled that the house approved a supplementary budget of 28.2 billion Birr during the current fiscal year, in addition to the 274 billion Birr Budget.
From the newly proposed budget, urban development and construction takes 50.7 billion Birr, taking the biggest chunk, followed by education and agriculture and rural development, consuming 43.2 billion Birr and 12.2 billion Birr respectively.

Capital expenditure is going to consume 114.7 billion Birr of the budget, while recurrent expenditure will use 81.8 billion Birr. For subsidizing regional governments, the budget has allocated 117 billion Birr. The subsidy shows 16.9 percent increase when compared to the previous year’s allocation.

The budget set aside for public debt repayment is 16.9 billion Birr, which is more than double the budget allocated for sustainable development goals – 7 billion Birr.

Other than this, the government has set aside budget for industrial parks development and revolving youth finds.

The budget deficit, on the other hand, is set to be 53.9 billion Birr. The plan is to cover the deficit with internal sources. Domestic loans that will cover the deficit will be 2.5 percent of the total gross domestic product (GDP).

The budget deficit is going to be twice what it was 2 years back. Back in 2015/16, the proportion of the deficit which was covered by domestic loan was 27.6 billion Birr.

The total budget is going to be made up in the following manner; some 221.1 billion, 17.1 billion, and 28.6 billion birr will respectively be sourced from domestic revenue, external assistance and loans and credit.

Source: The Reporter