FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers New TRADE AFRICA New

Fortune Logo
Totalling 386.9 billion Birr, it is 11.5pc higher than last year’s budget. The government plans to cover 65pc of it from domestic tax revenues, while external assistance and loans will cover the rest.

Parliament unanimously passed the federal government’s current fiscal budget last Monday, July 8, 2019. Totalling 386.9 billion Birr, it is 11.5pc higher than last year’s budget. The government plans to cover 65pc of it from domestic tax revenues, while external assistance and loans will cover the rest.


In the parliamentary session, Prime Minster Abiy Ahmed (PhD), while answering questions from members of parliament, indicated that the macroeconomic policy the country has been following for the last 15 years would be changing from the ‘aggregate demand’ to ‘aggregate supply’ model.


However, the just passed budget does not seem to strictly reflect that shift as the ‘aggregate supply’ model discourages heavy government spending. The budget has allocated 130.7 billion Br for capital spending, which is a 14.8pc, or 16.4 billion Br, increase from the last fiscal year. Recurrent government spending has gone up by 19.5 Br to 109.5 billion Br.


This shows the dilemma the government is facing. The impressive economic growth of the last 15 years was primarily government driven and necessarily fueled by debt. The country is currently carrying a foreign debt of 27 billion dollars and local debt of 731 billion Br. Since this trend is unsustainable, the government is trying to change its policy and encourage more private sector participation in the economy. However, the private sector in Ethiopia is not strong enough yet to fill the gap. Solving this dilemma will be testing the government’s economic leadership capacity in the coming year.


You can read the full story    here    


PUBLISHED ON Jul 13,2019 [ VOL 20 , NO 1002]

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.



Related Posts

[ssba-buttons]

Put your comments here

N.B: A submit button will appear once you fill out all the required fields.

Editors' Pick

Exclusive Interviews

State Enterprises from Oracles to Apprentices

Dec 22 , 2024 . By TIZITA SHEWAFERAW

Charged with transforming colossal state-owned enterprises into modern and competitiv...

Agenda

Rising Costs, Inflation Threaten Insurance Industry

Aug 18 , 2024 . By AKSAH ITALO

Although predictable Yonas Zerihun's job in the ride-hailing service is not immune to...

Agenda

BREWING DISCONTENT

Jul 28 , 2024 . By TIZITA SHEWAFERAW

Unhabitual, perhaps too many, Samuel Gebreyohannes, 38, used to occasionally enjoy a couple of beers at breakfast. However, he recently swit...

Fortune News

Electric Vehicle Push Leaves Investors in the Lurch

Jul 13 , 2024 . By AKSAH ITALO

Investors who rely on tractors, trucks, and field vehicles for commuting, transporting commodities, and f...

Commentaries

How to Put Development Finance Back on Track

lobal growth this year is expected to slow to its lowest rate (outside of a crisis) s...

A New Vision for Development Cooperation

he global system of financing for development, including that of development cooperat...

Fineline

Leaders of the National . . .

Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...

When the country’s most. . .

When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...

Editorial

Civil Society Feels the Squeeze as Reform Era Unravels

Jul 5 , 2025

Six years ago, Ethiopia was the darling of international liberal commentators. A year...

Soaring Taxes Fail to Plug Holes as Audit Reveals Enduring Waste

Jun 28 , 2025

Meseret Damtie, the assertive auditor general, has never been shy about naming names...

Expanding Federal Budget Tests Limits of Fiscal Discipline

Jun 21 , 2025

A well-worn adage says, “Budget is not destiny, but it is direction.” Examining t...

Desire to March to the Sea Should Spill Reason on the Way

Jun 14 , 2025

Yet again, the Horn of Africa is bracing for trouble. A region already frayed by wars...

Gallery

Parliament Approves New Cabinet Members

Oct 6 , 2021

Parliament Approves New Cabinet, Incorporates Opposition Leaders Lawmakers have approved today the nominations of 22 ministers, including three opposition leaders. Two MPs have voted against, while 12 abstained...

2020 in Posterity

Jan 5 , 2021

TIGRAY VOTES DESPITE "NULL & VOID" THREAT

Sep 9 , 2020

IN-PICTURE: LAUREATE'S RECEPTION  

Dec 14 , 2019

PM Abiy Ahmed (PhD) at a Gala Dinner Called for the Awarding of the Félix Houphouët-Boigny Peace Prize

May 6 , 2019

Faces, Voices of Addis Abeba

Apr 26 , 2019

Sunday With Eden

Rise Without Ruin

At times, the pursuit of opportunity quietly takes on a ruthless tone. Success begins to feel like a zero-sum game, where someone must lose...

Real Respect Shows Up First

A couple of weeks ago, I found myself at a social gathering where strangers and old acquaintances mix in a haze of small talk and light laug...

Life Matters

The Nuances of Baby Carrying

Each morning, just beyond the compound gates, a familiar image greets the day: a mother walking briskly with her baby snug in a front carrie...

The Quiet Roar Beneath the Calm

There is often a sense of awe when encountering someone who appears to have everything under control. Impeccably dressed, composed, and seem...