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Ethiopian Federal Government shy about raising supplementary budget at the Parliament

PM Abiy Ahmed cabinet during a meeting in Nov 2022 (Photo : Public Domain)

By Hailegebriel Endeshaw
Staff Reporter

ADDIS ABABA – (BORKENA) – Usually this time around the Federal Government should have submitted extra budgetary requests to the House of Peoples Representatives. However, as days wear on to the end the third quarter of the fiscal year, the Federal Ministry of Finance has not yet come up with the request for an additional budget, according to Wazema Radio.

It is to be recalled that the Federal Government approved 786.6 billion birr annual budget for this current Fiscal Year. The allocated budget is much bigger than the previous budget years. However, the supplementary budget request that should have been submitted to the House this time delayed much more than expected.

Last Ethiopian budget year, in 2014, the House approved birr 561.7 billion birr as annual budget. In January same year the Federal Government came up with the request for a supplementary budget of 122 billion birr. This was approved by the House of Peoples Representatives. It is to be recalled that the extra budget request was rationalized for expenses of war-damaged infrastructures.

A senior government official told Wazema that there might not be a supplementary budget request this budget year, but “if there is any”, it would be seen ahead. The source did not list out the reasons why the additional budget was not tabled for request.

The other sources said that this government might not submit additional budget requests lest it should not be exposed to the subsequent money printing.

Recently the Federal Government has borrowed, during the first quarter of the budget year, the total amount of 100 billion birr from National Bank. Similar direct advance payment taken by the government in the 2014 Ethiopian Budget year was 76 billion. Sources say that to supply direct advance payment (loan) or to fill the huge budgetary deficit, the National Bank is obliged to print money. Ahmed Shede said while presenting a report to the House of Peoples Representatives that of the allocated annual budget of birr 786.6 billion, a deficit of over 300 billion birr was expected.

The internal conflict Ethiopia has gone through caused her not to get loan and assistance from the international community. The various revenues collected annually cannot fill the budget gap. Therefore, the government had to take the loan from the National Bank of Ethiopia. This means money printing was taken as the sole alternative to fill the budget gap. 

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