Cabinet Approves 502b Birr Budget as City Returns to Federal Subsidy

Jun 21 , 2026

The Addis Abeba City Cabinet has approved a 502 billion Br budget for the 2026/27 fiscal year, a fiscal plan that marks a return to federal subsidies despite previous claims of municipal self-sufficiency. The budget, now awaiting final ratification by the City Council, incorporates a federal subsidy of less than 250 million Br. This policy reversal follows the 2025/26 mid-year salary revisions for civil servants, implemented to buffer the inflationary impact of the floating Birr on the cost of living. To finance the half-trillion Birr expenditure, the administration intends to leverage internal revenue streams informed by a newly completed independent capacity study. The budget prioritizes social welfare and urban development, dedicating two-thirds of total expenditures to poverty reduction and sustainable development goals. These funds are earmarked for infrastructure projects in roads, housing, and water, as well as health and education subsidies for low-income residents. Administrative overhead is projected to account for 29pc of the total budget. Complementing the fiscal measures, the Cabinet approved regulatory reforms, including the establishment of a Civil Servants Qualification & Certification Institute to standardize public service and an updated municipal property service fee structure.