A National Budget Focusing on Poverty Reduction Approved by the Ethiopian Parliament
The outgoing parliament, in its 36th regular session recently approved the budgetary bill for the 2010/11 fiscal year amounting to 77.2 billion Birr, the biggest ever in the country’s history. The bill allocates more than 70 percent of its budget to poverty reduction projects, underlining the government’s resolve to further enhance its poverty eradication endeavours.
The pledge against poverty eradication is in keeping with Ethiopia’s commitment to achieving the Millennium Development Goals of reducing poverty by half by the year 2015. The current budget allocates the lion’s share of the resources for provision of services like education, health, rural electrification, roads and telecommunications – sectors that are critical to alleviating poverty and hence paving the road towards achieving the MDGs. It is to be recalled that UN sources indicated Ethiopia to be one of the twenty developing countries in the world that are slated to meet the MDGs. What is more, out of the total budget, about 46.5 percent is allocated for capital expenditure while regional subsidy and recurrent expenditure receive about 31 percent and 22 percent of the budget respectively.
The bill allocates about 4.4 billion Birr to national defence, amounting to 0.91 percent of the Gross Domestic Product of the country, which is less than the 2009/10 fiscal year’s 0.98 percent. In terms of financing the expenditure, over three quarters of the revenues is from domestic sources while about 20.1 billion Birr is expected to come as grants and loans from external sources although, according to the Prime Minister, actual pledges exceed the conservative calculation.