The House of People’s Representatives (HPR) has endorsed Birr 1.93 trillion budget for the fiscal year 2018 (2025/26), which is close to 2 trillion and twice that of the previous year.
The budget shows a lot of increase compared with that of last year’s i.e. 971 billion, as it has considered the measures taken under the landmark macro-economic reform, which was launched at the outset of the fiscal year.
A large portion of the budget that is 1.2 trillion (81.3%) is set to be covered by domestic resources, according to the report presented to the House.
The government’s initiative to mobilize domestic resources to cover more than 80% of the budget is a commendable beginning in empowering the nation to become self-reliant on its resources. Indeed, the country is endowed with rich and untapped economic potential as well as human resource that can support its rapid and sustainable economic development.
Hence, conquering the chronic mentality of dependence on foreign aid will be a favorable feat for the generation. The government should uphold best practices in cultivating domestic revenue sources both tax and non-tax to ensure sustainable social justice and political stability to the future generation.
Without ignoring the role of effective economic policy implantation in the recent past, it’s also important to acknowledge the promising start of the macro economic reform which is yet one year old, but is capable of yielding resources for the subsequent fiscal year.
Though difficult to say that the reforms path was a bed of roses, it has undeniably passed through the feared and anticipated backlashes and tided the economy over to where it is now. For instance, one of the highly expected drawbacks was high currency inflation due to the floating of the foreign currency market. The free foreign exchange market has rather ended up narrowing the gap between the official and parallel markets.
Other components of liberalizing the macro economy via the reform are also being implemented in due course through careful procedure and involvement of relevant stakeholders. Both the implementation of the macro economic reform and the budget for the upcoming fiscal year reflects the government’s commitment to apply the economic policy in a way that lays the foundation for the future of the nation.
As discussed in the house, proportion of the capital budget for the fiscal year is only 21% of the total. In response, Minister of Finance Ahmed Shide indicated that the infrastructure projects already under construction are capital intensive and need due time to allocate the required budget and complete them.
From this, it is possible to conclude that the country is undertaking diverse mega projects that can serve the nation for a long range. In the someway there is no need to allocate all the budget at one year and they can be effectively accomplished in due course but surely. This will help to avoid any possible shock in the economy, drawbacks in the construction process and quality of deliverables as well as malpractices that take advantage of the hasty and unscrupulous planning and implementation of such mega projects.
Overall, the budgeting of the upcoming fiscal year reflects the farsighted approach of the government and the macro economic reform. It needs the government’s cautious and committed implantation as well as the honest collaboration of all stakeholders for the effective accomplishment.
THE ETHIOPIAN HERALD THURSDAY 12 JUNE 2025
