The House of People’s Representatives has approved a 320.8 billion Birr budget, (c$13.9 billion), submitted by the Council of Ministers for the 2010 fiscal year, an increase of 46.9 billion Br (16.9%) compared to the previous year. Of the total, 114.8 billion Birr is for capital expenditure, 81.8 billion for recurrent spending, 117.3 billion to subsidise regional states, and 7 billion for Sustainable Development Goal (SDG) projects.

Presenting the bill, Minister of Finance and Economy, Abraham Tekeste (Ph.D.), gave details of the performance of the current fiscal year and federal government priorities for the coming fiscal year. He noted that broad-based and equitable economic growth has contributed to a significant increase in peoples’ income level.

About 61% of the budget will be spent mainly to finance infrastructure developments such as road, education, agriculture, water, health and rural electrification projects. Large sections of the budget will be spent on manufacturing, export and urban development, with the specific intention of transforming the economy sustainably.

In addition, the bill aims to collect up to 196 billion Birr, an increment of 26 billion compared to the closing fiscal year, from domestic tax and non-tax incomes. The remaining budget is to be secured from other sources including 80.3 billion from the treasury, 14.3 billion from external loans and 20.2 billion from external grants.

During the second day session of the Parliament, Prime Minister Hailemariam Dessalegn elaborated government plans for the upcoming fiscal year and responded to questions from MPs. MPs asked about the financing of the new budget, the drought situation present in parts of the country, measures sought to tackle unemployment, plans for tax collection schemes, trade balance, export trade performance, use of small- and medium-scale irrigation programmes and questions related to the status of the Mega-industrialisation projects.

The premier told MPs that the Government had set out comprehensive and detailed plans to enhance the tax regime and revenue mobilisation capabilities. The tax targets would, he said, be achieved as a result of improved institutional capacities and public awareness. Referring to export performance and foreign currency earnings, the premier said valuable experiences had been gained from Hawassa Industrial Park and the experience obtained will be emulated nationwide to strengthen exports and increase export revenue earnings.

He reminded the house that in three years’ time Ethiopia will start exporting natural gas and the revenue obtained from the sales will substantially improve export earnings. A collaborative effort has to be made both by the government and private sector to expand export volume and variety, he added.

On employment, the premier underscored the development of Industrial Parks, three of which are in operation, and many others under construction in various parts of the country. They will provide job opportunities for many youths in and around the major cities and would also be centres of technology transfer and modernisation.

On climate change and the drought, he reaffirmed that the massive development of power projects in the country demonstrated Ethiopia’s strategic orientation and the application of its green development vision. He added that Ethiopia has an effective early warning disaster management system (EWRD) which is tasked with collecting early warning information on a regular basis from districts. The government is doing, and will continue to do, its level best to provide water and food to people, to establish more school feeding centres and provide animal feed for livestock from its internal sources, including funds that were previously earmarked for other programmes, to cope with the severe drought.

The premier emphasised that the new budget underlines the Government’s determination to continue spending money on its pro-poor policies, on social sectors, which will essentially change the livelihood of the people and transform the economy.