The increase in the annual budget progress of Ethiopia approved by the House of Peoples Representative at the beginning of the country’s each fiscal year witnessed fast and sustainable economic growth over the last decade, stakeholders argued.
Budget and Finance Affairs Standing Committee Vice Chair in the House of Peoples Representative Birhanu Abebe told The Ethiopian Herald that Ethiopia’s economy is increasing with over 13 percent Gross Domestic Product (GDP) revenue every year.
The nation’s total economy has reached 1.5 trillion Birr and income per capita has now reached 764 USD, he added.
He also highlighted the increment of budget is due to the rising of the revenue. “Even if there are gaps in the collection of maximum potential revenues, the nation collects over 13 percent of the total GDP revenue every year.”
Ethiopia’s annual approved budget is showing a remarkable growth every year, he said, adding that “This year alone the nation has planned 320 billion Birr budget for poverty reduction centered economic policy direction of the nation that includes infrastructure development, health, education, water, road and other capital projects.
Ethiopia’s economy has of course produced more than this amount collected and approved. He stressed “Capacity limits, rent-seeking political economy, and unwillingness or less awareness on paying proper taxes on the side of the business community are some of the challenges hindering the efforts of securing desirable economic and budget allocation progresses.”
The increasing budget of the nation is practically tested showing massive developments in the nation, Berhanu emphasized citing some examples such as road networks, the steady progress of various mega projects in the nation, health expansion and education.
He added, “There are over 40 universities constructed across the nation to have an easy access to higher education to citizens.”
He also called on all citizens to pay taxes honestly to take the nation two steps at a time even if there are now few in the area who hold their citizenship tax paying responsibility properly.
Prof. Dr. Fisseha-Tsion Mengistu is an experienced expert in the area of Public Finance, Budget and Business, also share the aforesaid ideas. He said “The tax GDP ratio shows that the nation is not still collecting the maximum potential of the economy. Hence, it is an assignment for the responsible bodies to work towards attitudinal change in the business community to have the maximum tax collected.”
The budget increment is a natural process which is moving towards meeting the increasing demand of the public, he said, adding that the budget of our nation is the result of the revenues from local and international sources and when we see that much of the Ethiopia budget is secured from local sources which made it a logical development.
“I wanted to comment on how this budget is utilized. I can see many buildings in the nation at a fast move which even seems going beyond the allocated budget. The sources of these finances should be well known and studied. I feel that there should be study on the sources of finances of the various projects that are now in progress, ” he hinted.
The budget should give priority to human capital development, he said adding that “Focus should be given to value added capacity building as intellectual capital is by far crucial than the visible developments witnessed.”
Ministry ofFinance and Economic Development Communication Director Haji Ebsa on his behalf said that Ethiopia’s economy is showing 13 to 19 percent economic growth annually with the fast revenues progress from internal and external sources. He said “This progress shows healthy development ofnation’s economy.”
The annual allocated budget has shown a double increase over the last ten years, he said adding “The budget allocated 10 years ago was not more than 140 billion Birr and this was doubled in the last budget year.”
The director added one indicator ofthe nation’s healthy economic development is that it is in a continuous progress.
“This is not just a numerical progress but a practical witness that has shown concrete achievements in various streams. Railway networking, both within and outside, Ethiopia. The railway network is connecting Ethiopia with Djibouti and Kenya at the moment. Moreover, the nation is witnessing amazing development performances in the areas of agriculture, health, education and other sectors due to the steady fast economic development and the budget allocation of the country.”
He also commented that Ethiopia’s budgetary activity should be led by sufficient practical research.
According to the information from MOFED, the figurative demonstration of the budget indicated an upward trajectory over the last five years. In the 2014/15 budget year, it was about 178 Billion Birr, which was raised to 223 billion and over 274 billion Birr in 2015/16 and 2016/17 years respectively.
In the same way, for the coming 2017/18 Ethiopian Budget Year the Council of Ministers approved 320 billion Birr .This budgetary system indicates the increasing of productivity and the country’s economic growth in those years that obviously lead the country to be food self reliance in the coming few years.