ADDIS ABABA – The lower house of the Ethiopian parliament has ratified a 786.6 billion Birr or $15.2 billion budget for the 2022/23 fiscal year that starts on Friday, July 8.
Members of Parliament approved the budget, which shows a 16.6% rise from the previous year, with a majority vote and four abstentions.
Out of the total budget, 345.1 billion Birr is allocated for expenditure, 218.1 billion Birr for the capital budget and 209.4 billion Birr to subsidize regional states. The remaining14 billion Birr is earmarked to implement Sustainable Development Goals (SDG).
The budget bill focuses on debt payment, humanitarian assistance, rehabilitation, and reconstruction.
It has also given attention to building the capacity of security forces, poverty reduction activities, completing ongoing development projects, supporting displaced people, and rehabilitating damaged infrastructures and services.
The budget was forecast to record a deficit in 2022/23 of 231.4 billion birr, or 3.4% of gross domestic product compared with a government predicted deficit of 2.7% in 2021/22.
To address the deficit, the government would borrow 224.5 billion birr domestically and the rest from external sources.
“This budget deficit is higher than previous years and that is due to the current condition of our country where covering essential expenses is a must,” Finance minister Ahmed Shide said in his budget speech at the parliament on Tuesday.
Ethiopia’s economic growth has recently been affected by the impacts the of COVID-19 pandemic and conflict.
In the concluding fiscal year, the Ministry of Finance expects the economy to expand by 6% to 7%, down from a previous 8.7% projection.
The ministry also project a 9.2% growth in 2022/23 FY.
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