– Gov’t drafts 1.93 T Birr budget for 2025/26 FY
ADDIS ABABA – In a significant step toward implementing comprehensive and long-term macroeconomic reforms, Ethiopia has proposed a 1.93 trillion Birr budget for the 2025/26 fiscal year, targeting an economic growth rate of 8.9%.
Presenting the draft budget during the 35th regular session of the House of People’s Representatives, Finance Minister Ahmed Shide stated that the proposal is aligned with the country’s Ten-Year Perspective Plan (2021–2030), emphasizing continuity with Ethiopia’s long-term development goals.
According to the Minister, the government plans to generate 1.5 trillion Birr in revenue during the 2025/26 fiscal year. This includes revenue from tax and non-tax sources, as well as support from development partners and foreign aid. The projected revenue marks a 62% increase compared to the estimated revenue for the current fiscal year.
Of the total draft budget, 61% is allocated for recurrent expenditures, representing a 48.1% increase over the current fiscal year’s recurrent budget. Additionally, 463 billion Birr is earmarked for servicing domestic and foreign debt, he stated.
The capital budget is set at 415 billion Birr, accounting for 22% of the total budget, an increase of 72 billion Birr compared to the current fiscal year, he noted.
Ahmed noted that preparations are underway to implement reforms in both tax policy and administration, aiming to enhance tax revenue performance. He also emphasized that the rise in total budget size is largely driven by increased expenditures associated with reform implementation.
This budget plays a crucial role in advancing Ethiopia’s comprehensive macroeconomic reform agenda, he said.
The minister urged government institutions to use their allocated funds effectively and for their intended purposes. He also called on all relevant stakeholders to ensure the efficient and responsible utilization of the budget.
Following the presentation and discussion, the parliament referred the draft budget to the Standing Committee on Budget, Planning, and Financial Affairs for further deliberation.
BY STAFF REPORTER
THE ETHIOPIAN HERALD THURSDAY 12 JUNE 2025
