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

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

Africa's Minerals Shapes the Future of Global Power

The clean energy transition has fueled the global race for critical minerals, transfo...

Climate Action Requires Debt Relief

Today's global economic turmoil is not only about trade. As G20 finance ministers gat...

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

When Pension Funds Nap Inflation Steals the Blanket

May 3 , 2025

Pensioners have learned, rather painfully, the gulf between a figure on a passbook an...

Policymakers Trudge Down a Path of Punitive Taxation

Apr 26 , 2025

Benjamin Franklin famously quipped that “nothing is certain but death and taxes....

Overseas Job Push Evokes Hopes at Home, Hardship Abroad

Apr 20 , 2025

Mufariat Kamil, the minister of Labour & Skills, recently told Parliament that he...

Officials Bank on Student Service to Patch a Fractured Country

Apr 13 , 2025

The federal government will soon require one year of national service from university...

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

Is Struggle the Secret Ingredient in Parenting?

In an age obsessed with convenience and instant gratification, parenting stands at a...

When the Lens Crosses a Line

Over two years ago, on our first wedding anniversary, my husband and I wanted to do something meaningful. We decided to recreate our wedding...

Life Matters

Less Stuff, More Life

There is a little thrill that comes with buying something new, the excitement of having the means, walking out with a bag in hand. That mome...

The House That Deceit Built

A strange paradox continues to surface: what might happen if lying were to vanish entirely from human life? If all communication were filter...