Ethiopia’s budget increase explained by the law enforcement operations in Tigray region, among other factors
Ethiopia’s budget for the 2014 fiscal year (2021/22 G.C) on Saturday is approved by the Council of Ministers. It means that the Ethiopian Parliament will have to approve it.
The council of Ministers has approved a total of 561.7 billion birr, according to a report by state media – Ethiopian News Agency.
The budget is said to be one that is inline with the ruling party’s ten years plan which the party expects to transform Ethiopia’s productive capacity.
Prime Minister Abiy Ahmed tweeted :
“The Council of Ministers today approved a 561.7 billion draft budget for the 2014 Ethiopian Fiscal year. Due attention is given to enhancing our productive capacity in line with the 10 year perspective plan, laying the foundation for Ethiopia’s inevitable prosperity!”
Also, his office announced that the new budget is intended to address existing economic challenges , and adjustments have been made to cover new budget requests.
According to a report by Ethiopian News Agency, the Ethiopian economy was impacted by what the government calls law enforcement operation in the Tigray region of Ethiopia.
The reason an increase was required in this year’s Ethiopia’s budget was due to spending for the operation, for those affected by drought, those displaced, due to COVID-19 and fertilizer supply to farmers, among other things.
26.4 billion birr is to be financed from incomes to be taxed, local borrowing and from development partners, according to the report.
The upcoming budget is said to be higher by 18 percent compared to the budget for the ending fiscal year.
Ethiopia’s currency was affected by severe inflation this past year. In 2020, 1 canadian dollar was equivalent to about 25 Ethiopian birr. This year, 1 canadian dollar can fetch about 34 Ethiopian birr.
In 2019, Ethiopia’s budget was only 386 billion birr.