It was in June this year that Ethiopia approved nearly 1 trillion budget
Borkena
Toronto – Ethiopia’s Council of Ministers held its regular session on Thursday, where one of the key topics discussed was a budget adjustment.
The office of the Prime Minister announced that an additional 581,982,390,117 billion birr has been approved for the current fiscal year (2017 in the Ethiopian calendar). The request has been forwarded to the House of People’s Representatives for approval.
Over the past six years under Prime Minister Abiy Ahmed’s leadership, the Ethiopian parliament has rarely meaningfully debated or declined to approve budget requests or other decisions from the Council of Ministers.
It is said that the additional budget is necessary to cover increased government spending. The increase is based on projected revenue growth, primarily from domestic tax collection and potential aid inflows.
With this addition, Ethiopia’s total annual budget now exceeds 1.5 trillion birr. However, the apparent growth in the budget is nominal when considering the devaluation of Ethiopia’s currency, which has fallen by nearly 100 percent against the U.S. dollar and other major currencies over the past seven months.
Ethiopia approves 1 trillion birr budget for next fiscal year
In July of this year, the Ethiopian government introduced a currency devaluation, reportedly based on “policy advice” from the IMF and World Bank. At that time, one U.S. dollar was valued at approximately 57 Ethiopian birr. Today, the exchange rate has surpassed 121 Ethiopian birr per dollar, representing a sharp depreciation in just six months.
This currency adjustment was part of broader macroeconomic reforms, including the shift from a regulated and fixed exchange rate system to a market-based foreign exchange regime.
When adjusted for inflation over the past six months, the budgetary increase appears to be minimal, if not nothing. The government also implemented a salary increase for low-income public servants in October; however, this increase, much like the budget adjustment, seems to be nominal.
__
Join our Telegram Channel : t.me/borkena
Like borkena on Facebook
Add your business to Ethiopian Business Listing / Ethiopian Business Directory
Join the conversation. Follow us on X (Formerly Twitter) @zborkena to get the latest Ethiopian News updates regularly. Subscribe to YouTube channel To share information or for submission, send e-mail to info@borkena.com