Ethiopia’s Budget for Upcoming Fiscal Year Prepared Based on Domestic Sources 

Addis Ababa, June 24, 2024 (FBC) – Ministry of Finance provided clarification to the House of People’s Representatives’ Budget and Finance Affairs Standing Committee regarding the draft budget bill proposed for the 2017 Ethiopian Fiscal Year.

It is to be recalled that two weeks ago the Council of Ministers referred to the House of People’s Representatives a close to 1 trillion Birr draft budget for the upcoming Ethiopian fiscal year.

Ministry of Finance has given clarification to the House of People’s Representatives’ Budget and Finance Affairs Standing Committee about this draft budget, as ENA reported.

The budget was prepared based on the performance report of the just ended 2016 federal government program budget and by taking into consideration the government’s financial capacity and expected revenues as well as expenses required by executive offices.

It was learned that the committee has concluded scrutinizing the budget bill, which showed 21 percent increment from the preceding year.

Accordingly, the committee has raised at least a dozen questions about the budget bill, with a focus on how the government plans to finance the increased spending for development while also addressing macro and fiscal challenges.

Finance State Minister, Eyob Tekalign responded that the proposed budget prioritizes domestic funding sources and invests in productive sectors to boost productivity and economic output.

The state minister also highlighted plans to limit borrowing from the National Bank of Ethiopia, a measure intended to curb inflation.

According to him, the budget is prepared based on domestic sources of finance and included some approved loans and financial supports.

“We ensure these funds are disbursed on our priorities and this could be exemplary for Africa.”

Poverty reduction and sustainable development are also central to the budget plan, Eyob added.

Committee Chairperson Desalegn Wedaje commended the budget’s alignment with Ethiopia’s Ten-year Prospective Development Plan and medium-term economic framework

He emphasized the draft’s reliance on domestic revenue, with 92 percent projected to come from tax collection.

The chairperson also pointed out that the budget deficit falls within a healthy range, below the 3 percent threshold.

Yet, he stressed the need to strengthen follow up of projects implementation and narrow growing audit findings of institutions.