Bill runs up 13b birr deficit


By Asrat Seyoum


The Budgetary and Finance Affairs Standing Committee of the House of Peoples’ Representatives of Ethiopia is going over the draft budget bill of 77.2 billion birr for the upcoming Ethiopian fiscal year of 2010/11, it was learnt.


According to the Ministry of Finance and Economic Development (MoFED), so far, out of the total budget only 64 billion birr is guaranteed to be covered from local and external sources, leaving a 13 billion birr hole in the budget. The draft bill shows that the government is prepared to implement various mechanisms to finance the deficit. Domestic borrowing, external loan and resource from debt relief mechanisms like the Highly Indebted Poor Countries Initiative (HIPC) were mentioned as possible sources of financing the deficit. Compared to the budget deficit this year, which is about 5.4 billion birr, next year’s deficit level is going to be twice as high, the draft shows.


In general the draft allocated some 52 billion birr for recurrent and capital expenditures of the federal government while 24.15 billion birr was allotted to regional governments.


Though the total capital budget request submitted by the MoFED was about 52.77 billion birr, only 35.9 billion birr was officially supported by the Council of Ministers. The budget request for recurrent expenditure was also higher than what was actually supported. In this regard though close to 20.9 billion birr was originally proposed for the recurrent component, only 17.08 billion birr was supported finally.


According to the draft bill, the Ethiopian Roads Authority (ERA), Ministry of Education (MoE) and Ministry of Health (MoH) were the top three government agencies which secured the lion's share of next year’s budget. Although ERA had aimed for 15.27 billion birr at the end of the day only 12.7 billion birr was supported, still the highest capital budget so far.


The Ministry of Education got the support to secure the second highest capital budget for the next year, 5.3 billion birr, 2 billion less than what it had asked for. The draft bill also shows that out of the total supported amount allocated to MoE half of it is expected from foreign grant.
On the other hand, MoH obtained support for a 2.866 billion birr budget though it went for a much higher amount. The draft bill says that MoH is planning to spend 1.06 billion birr on malaria prevention and control activities in the new budget year.


Unfortunately, 90 percent of the budget allocated to the MoH is expected from foreign sources like the United Nations Children’s Fund (UNICEF), while only 92.4 million is accessed from government treasury. As a matter of fact about 7.6 billion birr of the capital expenditure is expected from foreign donors out of which a substantial share goes to MoH.


Including MoFED, the majority of agencies secured support for much less amount than they expected. In addition, about 90 percent of the agencies’ request to purchase vehicles was automatically turned down.

Source: Ethiopian_Reporter