Addis Abeba Tightens Purse Strings to Curb Year-End Budget Rush

Apr 25 , 2026. By NAHOM AYELE ( FORTUNE STAFF WRITER )

The Finance Bureau has issued a citywide freeze on new procurements as the Administration enters the final quarter of the 2025/26 fiscal year. Officials are attempting to dismantle a long-standing "use up the budget" mentality where offices rush to exhaust funds before the year ends. The directive, signed by Abdulkadir Redwan, the Bureau's head, placed the city’s largest spending networks, including 119 woredas, under immediate restriction.

Officials of Addis Abeba’s City Administration have ordered a freeze on new procurements across the bureaucracy, imposing a citywide spending clampdown as the capital enters the final quarter of the fiscal year, in an attempt to halt the rush to exhaust public budgets. The restriction, introduced last week, applies to almost all offices under Mayor Adanech Abiebie’s Administration.

A letter signed by Abdulkadir Redwan, head of the Addis Abeba Finance Bureau, instructed the city’s administrative structures not to initiate fresh purchases. It covers 87 sectoral bureaus, 11 districts and 119 woredas, placing the city’s largest spending networks under a procurement freeze when offices usually race to execute delayed plans.

City officials cast the order as a test of fiscal discipline for an administration managing a record 350 billion Br budget in the 2025/26 fiscal year. It is the first budget financed from internal revenue without federal government support. The city planned to mobilise more than 98pc of the total from the city's sources, a 51pc increase from the previous target. Capital spending has surged by 68pc to more than 246 billion Br, giving the Finance Bureau an incentive to redirect resources from administrative spending to large projects.

For the Bureau, the timing is not accidental. According to Abiy Bitew, loan fund managment coordinator, the last quarter of the fiscal year often encourages offices to rush purchases rather than returning unused budgets. He disclosed to Fortune the Administration's priorities for saving and shifting money toward mega projects.

“The Bureau imposed the restriction to curb wasteful spending, noting that purchases made in the fourth quarter are often vulnerable to misuse,” said Abiy. “Rather than returning unused funds, these expenditures are frequently driven by a ‘use up the budget’ mentality, a practice the Bureau wants to put an end to.”

The decision has disrupted plans inside the city government. The Labour & Skills Bureau had intended to upgrade its communications department by procuring modern computers and equipment for graphics work, as well as cameras. The purchases were scheduled for the current quarter but have now been stopped. According to Teklemariam Jatena, the Bureau’s communications head, his office had prepared to modernise its work before the directive arrived.

“We had planned to acquire the latest equipment to upgrade our communication work," he told Fortune. "But that has now been stopped because of the ban."

Abiy treats such interruptions less as collateral damage than as evidence of weak planning. He argued that bureaus that fail to initiate procurement in the first nine months and then rush to spend in the final quarter reveal poor planning and a tendency toward waste.

"Suppliers anticipate the end-of-year rush and raise prices accordingly," he said. “Even to avoid inflated prices, it is advisable not to procure at this time.”

City officials disclosed that procurement contracts already signed may continue. Utility expenses, including electricity, fuel and water bills, will be unaffected. Project-related procurements are also exempt. All other new procurement activities are suspended, leaving routine administrative purchases on hold unless they fall within the exceptions.

However, the impact is uneven as the Women, Children & Social Affairs Bureau appears to have avoided disruption. According to Konjit Debela, the Bureau's head, the Bureau had already secured what it needed for the fiscal year and did not expect any interruptions.

"We already secured all necessary supplies for the current fiscal year," she told Fortune. "Internal meetings are held inside the Bureau’s own facilities, avoiding external venue rentals or last-minute purchases."

The freeze follows another cost-cutting order by the Mayor’s office. Months earlier, the city banned the use of hotel venues for official meetings, trainings, workshops and evaluations. It was a measure city officials say was intended to reduce bureaucratic spending and channel money to capital investments, though it unsettled parts of the hospitality industry and exposed the tension between public-sector austerity and private-sector activity.

Gebeyaw Yitayih, a former staff member of the Federal Public Procurement & Property Authority, characterised the new restriction as “stringent.” Acknowledging its impact in reducing wasteful spending, he cautioned that a blanket order may create problems for agencies facing unforeseen demands.

Gebeyaw commended the Bureau’s effort to strengthen financial discipline but said the Administration should preserve mechanisms for urgent and unforeseen purchases.

"Unanticipated health, safety and security needs require flexibility," Gebeyaw told Fortune.

He also pointed to delays within the Finance Bureau itself, arguing that slow budget disbursement can undermine procurement planning. Lengthy tendering procedures add delay, making it harder for offices to execute purchases on time.

"Many institutions don't follow their procurement plans and instead push spending toward the closing months," he said.

PUBLISHED ON Apr 25,2026 [ VOL 27 , NO 1356]