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

Editors' Pick

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...

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, transportin...

Fortune News

Study Reveals Higher Education Quality Crisis, Calls for Reform

Jul 13 , 2024 . By MUNIR SHEMSU

The cracks in Ethiopia's higher education system were laid bare during a synthesis re...

Fortune News

Authority Bets on Price Adjustment Manual to Tackle Construction Delays

Jul 13 , 2024 . By AKSAH ITALO

Construction authorities have unveiled a price adjustment implementation manual for s...

Commentaries

Flower Exports Contested Despite UKs Tariff Break, as Rivals Thrive

When the United Kingdom (UK) exited the European Union (EU), it introduced tariffs on...

Climate Action Essential Rise Above Politics

This year's United Nations Climate Change Conference (COP29) in Azerbaijan's capital...

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

Bound by Debt, Government's Costly Love Affair with State Bloat

Nov 16 , 2024

In the realm of public finance, balance sheets speak louder than rhetoric. In such do...

Policy Bargain in Franco Valuta a Double-Edged Sword in the Forex Debacle

Nov 9 , 2024

Ethiopia's foreign exchange debacle resembles a tangled web of contradictions and con...

Addis Abeba Withering as Noise, Air Pollutions Choke the 'New Flower'

Nov 2 , 2024

Addis Abeba, fondly dubbed a 'New Flower,' is wilting under the weight of unchecked u...

Mercato Inferno Lays Bare Ethiopia's Vulnerabilities to Disasters

Oct 26 , 2024

When flames devoured parts of Mercato, residents watched helplessly as decades of toi...

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

Finding My Body Back, A Year Later

For many women, becoming a mother is a transformative experience that reshapes our priorities, self-perception, and connection to our bodies...

Mud-slinging Supermarkets Time for a Wash-up

At least four days a week, my family and I visit supermarkets in the capital to buy groceries. We frequen...

Life Matters

Human Face of Public Service

There are certain promises we make to ourselves—things we swear never to do again. I had made such a promise about taking the city bus. An...

Spinning Hope of Digital Services

Digital services have become integral to our daily lives, offering unparalleled convenience and efficiency. From mobile banking to online sh...

Back
WhatsApp
Telegram
Email