Draft Budget Bill Prioritizes Macro-Economic Stability; Planning & Dev't Minister

Addis Ababa June 15/2022/ENA/ The draft budget bill for the upcoming 2015 Ethiopian year, which is well aligned with the 10-year development plan goals and targets, prioritizes macro-economic stability, Planning and Development Minister Fitsum Assefa said.

The Council of Ministers has submitted 786.61 billion Ethiopian birr (15.23 billion U.S. dollars) proposed budget for the fiscal year which begins in July, 2022.

In an exclusive interview with ENA, the minister said macro-economic stability is one of the major priorities of the draft budget aligned with the 10-year development plan goals.

“When we see the recurrent budget, 50 percent of it goes to loan services or credit services, as one of the overarching objectives of our economic reform is creating macro-economic stability,” she added.

Noting that one of the variables in macro-economic stability is debt sustainability, Fitsum stated that the debt level of the country should be sustainable so that it can borrow more and have stable macroeconomic condition.

In the proposed budget, 50 percent of the recurrent budget goes to service both foreign and domestic credit which will play a great role in creating stable macro-economy.

Inflation is a challenge for Ethiopia and at the same time one of the biggest challenges globally, especially after the Russia-Ukraine conflict.

In terms of budget allocation with respect to addressing inflation in the country, the minister pointed out that over 60 percent of the budget is allocated to economic sectors like agriculture and manufacturing industry that are known for their productivity, and also sectors which are known for creating jobs and employment as it is one way to address the income level of citizens.

“Creating jobs would help citizens to cope with the challenges related to inflation sustainably,” she noted.

According to Fitsum, the proposed budget “also helps to increase the income of  citizens through creating sustainable jobs. But as the same time we need to have proper safety-net programs that help our vulnerable citizens.”

Moreover, irrigated wheat production will definitely help to address the supply-demand issue and has positive impact in reducing inflation in the market. Hence, the government will continue to exert extensive effort to get the maximum production and productivity in the area, the minister elaborated.

The draft budget generally focuses on debt payment, humanitarian assistance, rehabilitation, reconstruction, poverty reduction, development projects, supporting displaced people, completing projects, and climate change.

By the end of the fiscal, the economy of Ethiopia is expected to grow by 9.3 percent and the current 36.6 percent inflation to drop to 11.9 percent.