Reversing price inflation and security in the country given major considerations in the draft budget for Ethiopia’s upcoming fiscal year. The budget made assumptions that the conflict in the country would be ended by next year .
The Ministry of Finance on Tuesday announced a draft budget for the 2015 Ethiopian fiscal year ( 2022/2023 G.C).
Ahmed Shade, the Minister, said the budget gives special attention to the security of the country, debt payment, humanitarian support, and reconstruction work.
The Ministry also plans to bring down price inflation in the country, which is currently 36.6 percent, to 11.9 percent.
Based on a report from Ethiopian News Agency (ENA), state media, the government is planning to take serious measures to effect the desired result by preparing what the Federal government thinks are necessary policy measures and structural adjustments.
The total draft budget for the coming fiscal year is 786.6 billion birr. It is up by 16.6 percent compared to the ending fiscal year.
In terms of breakdown, 216.1 billion birr will be allocated for the capital budget and 345.1 billion will be for the regular budget.
209.4 billion birr is set aside for transfers to regional states. Population size seems to be among the factors to be taken into consideration for distributing the subsidy for the ethnic-based states.
14 billion birr is allocated for development projects.
The Minister also said that the draft budget was informed by a macroeconomic forecast for next year.
One major assumption that is made in the preparation of the draft budget is that the war in the country would be ended by next year and that the focus will be on reconstruction.
Paradoxically, the security of the country would be among the top spending areas for the next fiscal year.
Prime Minister Abiy Ahmed’s administration is also anticipating a 9.32 percent economic growth which was also taken into consideration in the preparation of the draft budget.
Another plan is to cut imports from 18 percent, which is what is under in the current fiscal year, to 10.2 percent. Among the measures to finance the budget are amendments to excise tax, value-added tax, and property tax.
The Federal government expects a 231.4 billion birr budget deficit. It plans to borrow from domestic and international sources to cover it.
The draft was discussed in the House of People’s Representatives and forwarded to the Budget and Finance Standing Committee in the House.
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