New Budget Prioritizes Agricultural Sector: PM Senior Economic Adviser

July 06, 2021 (ENA) The 2014 Ethiopian Fiscal Year budget approved by the House of People's Representatives gives priority to the agricultural sector, Senior Economic Adviser to the Prime Minister said.

Senior Economic Adviser to the Prime Minister, Mamo Mihretu told ENA that the budget is  allocated to the agricultural sector, especially to irrigation projects.

According to him, the move will help to stabilize inflation by increasing production and productivity while completion of the projects stabilizes the macro-economy.

“As we have said many times before, the budget for the year is formulated in such a way as to stabilize the macroeconomic and reduce cost of living. In this regard, the budget for some development activities has been significantly increased. For example, the budget for agriculture has increased. This is because irrigation development needs major capital expenditure. The allocation of increased budget to the sector will, however, increase production and productivity in the agricultural sector,” he explained.

In his address to the House of People's Representatives, Prime Minister Abiy Ahmed also said farming activities will be undertaken widely to reduce inflation. 

He noted that it is important to balance demand and supply to prevent inflation, solve the problem of the supply chain and also focus on wheat production in the dry season. 

Speaking about the approved budget, the senior adviser revealed that budget deficit is inevitable next year.

“Whenever there was a budget deficit, efforts were made to repay loans from the National Bank. This has contributed to inflation. Therefore, efforts will be carried out to fill the gap by selling treasury bills during the 2014 budget year. This could reduce inflation and lower living costs,” Mamo elaborated.

The government plans to collect 369.1 billion Birr tax in the budget year and efforts will be exerted in order to realize this by modernizing tax collection system, he stated.

The senior adviser said, “The main goal is to cover expenses nationally as much as possible. To achieve this, we need to modernize our tax collection and expand new sources of income. By making our tax collection system technologically advanced and by developing a culture of voluntary tax collection, we will strive to cover our national expenses with national revenue.”