BY ABDUREZAK MOHAMMED
Some weeks ago, the Council of Ministers, in its 97th regular meeting, approved 561.67 billion Birr proposed budget for 2014 E.C. fiscal year. The council stated that the proposed budget has shown an 18 percent increment compared to the last year’s budget. Out of the total 561.67 billion Birr budget, 162 billion Birr is allocated for recurrent spending, 183.5 billion Birr for capital expenditure, 203.95 billion Birr for the subsidy to regions, and 12 billion Birr for sustained development goals, according to the press release.
It was also reported that some 369.1 billion Birr or 84.7 percent of the total budget is expected to come from domestic sources and the remaining 123.7 billion Birr from foreign loans and grants.
It was also learnt that after an extensive discussion of the draft budget bill, the council approved the bill and referred it to the House of People’s Representatives for further discussion and approval.
Ethiopia’s economic growth is projected to be 8.7 percent in the 2014 Ethiopian fiscal year, said Finance Minister Ahmed Shide.
Delivering this year’s budget speech to the House of Peoples’ Representatives, Ahmed Shiede, Minister of Finance briefed the House about the economic reform activities that have been undertaken in the country and also the challenges facing the economy.
He said that the Ethiopian economy has been facing several challenges including the outbreak of COVID-19, inflation, shortages of foreign currency as well as other manmade and natural disasters, reported the Ethiopian News Agency (ENA).
Despite all the challenges, the economy has managed to grow by 6.1 percent and per capita income has reached 10,080 Birr. Based on the existing indicators, the nation’s economy is also expected to register better performance in the 2014 fiscal year. “Accordingly, the overall economic growth is projected to be 8.7 percent and inflation is expected to fall to a single digit,” Ahmed elaborated.
As to him, an improved system will be implemented to increase government revenue. He also assured that the necessary monitoring system will be implemented to ensure the proper spending of government’s expenditure for social and economic developments.
After discussion, the House, in its 15th regular meeting, sent the draft bill to the Revenue, Budget, and Finance Affairs Standing Committee for further scrutiny.
Following this, the aforesaid standing committee organized a public hearing and discussed the draft budget bill with the higher officials of the Ministry of Finance and other government officials and also various sections of the community.
During the discussion, the Standing Committee stressed that government institutions need to use their annual budget in a cost-effective and waste-free manner.
Participants of the discussion also stated that, over the years, there has been a high level of budget wastage in the government, especially during procurement. Participants also asked what is planned for this fiscal year to reduce budget wastage in government institutions. They also inquired government’s design to lessen the high cost of living and the high level of unemployment rate in the country.
During the discussion, Finance State Minister Eyob Tekalign (Ph.D.) stated that the draft budget in the 2014 has given priority to reduce inflation and unemployment in line with the country’s 10 Years Perspective Plan. He added that 60 percent of the total cost of food and food items is the result of inflation and the high cost of living.
He also noted that like many other countries, the coronavirus pandemic has hit Ethiopia’s economy hard.
To tackle the problems expected in the coming budget year, the government has given great attention to curb the existed, he reported. He also urged that institutions need to use their budgets economically to help the government carryout short and long-term market stabilization and agricultural expansion.
He also indicated that subsidy on food grains and commodities is a short-term stabilization of the market. Irrigation and related agricultural activities will be carried out to increase productivity and reduce inflation and unemployment. “If we extensively work hard in the agriculture sector, we would fundamentally bring a change,” Eyob stressed.
Eyob also said that the procurement system of institutions needs to be scrutinized and improved.
Increasing tax revenues and expanding tourism destinations with the involvement of the private sector is crucial, said Teferi Demeke, Budget Affairs Advisor at the Ministry of Finance. He added that the aforesaid activities would enhance local revenues and create jobs for citizens.
The advisor also reported that a huge amount of budget is allocated for education, health, construction of roads, and urban development.
Shambel Jember Asmamaw member of the parliament queried about the supervision and monitoring measures application on government institutions with audit findings He also raised questions about financial loans and grants from foreign sources, cost of living, inflation, and additional costs Universities were obliged to expend for coronavirus victims.
He further claimed that the budget subsidy to the regional states does not take into account the total population of the regions. He also asked about the budget allocation consideration for the “2.3 million people in the Amhara regional state who were jumped over when a census was conducted years ago”.
Another MP Dogisso Gonna appreciated the draft budget plan and the clearly stated measures mentioned in the plan to tackle the inflation challenge of the nation. However, he asked about the government’s plan to halt inflation in the country.
Besides, additional MPs forwarded multiple inquiries and comments in the 2014 draft budget bill. All the inquiries and comments focus on the viability of the allocated budget in the respective government institutions and regional states across the country.
Regarding the census issue, Finance Minister Ahmed Shide said the mandate belongs to the House of Federation to deal with the enumeration of a given people in a given region and when the House does so, the ministry will follow the formula.
He also stated that institutions with audit findings have been subject to correction measures so far.
The foreign sources of financial loans and grants are the credible ones, he said. On the other hand, the treasury bill market as part of the homegrown economy is reliable when it comes to the budget deficit, he added.
The Ethiopian Herald July 4/2021
