Ethiopia’s Budget Plan Focuses on Education, Health, Road Infrastructure, Agriculture and Irrigation, Clean Water Provision

BDO’s Ethiopian Federal Government Budget Highlights 2021/2022 shows Ethiopia’s new budget for 2021/22 gives priority for education, health, road infrastructure, agriculture and irrigation, clean water provision and other important areas.

The Ethiopia Budget runs from July 8th of the current year to July 7th of the following year (Hamle1 – Sene 30). The Gregorian calendar equivalent to the fiscal period 2014 (E.C) is the period from July 8th, 2021 to July 7th, 2022.

Where do Business Info Ethiopia (BIE) Pay Attention in the BDO Ethiopia Review:

• The Government of Ethiopia (GOE) prepares its budget using programme budgeting system. It is a system that matches budget with its end results.
• The new budget for 2021/22, which assumed increasing revenue collection through improving tax revenue, gives priority for education, health, road infrastructure, agriculture and irrigation, clean water provision and other important areas.
• Ethiopia allocates ETB 561.67 billion budget for year 2021/22, showing an ETB 85.66 billion (18perecent) increase from previous fiscal year.
• Of the total budget for the fiscal year 2014, 2.4% goes to general development, 21.4% is allocated for economic development, and 8.4% and 0.4% are allocated for social developments and others, respectively.

• The total budget deficit is estimated to be 2.67% of the GDP while domestic loan will only be 1.46% of GDP.
• The budget deficit of ETB 125.75 billion for 2021/22 is planned to be covered from loans derived externally and domestically.

• Principal sources of government revenue are tax, non-tax and external assistance accounting 59.47%, 6.25% and 11.9% of the total revenue funds for 2021/22, respectively.
• The bulk of tax revenue amounting ETB 146.97 billion is anticipated to derive from taxes and duties on external trade. The figure shows 21.1% increase compared to 2020/21 budget.

• Total federal recurrent expenditure accounts 28.87% of the total budget expenditure for the fiscal period.
• Federal expenditure is financed by domestic revenue (90.5%) of which 59.5% of the total revenue for the budget year is assumed to be generated from Tax. Non-Tax revenues account 9.4% of domestic revenues and 6.2% of total revenues.
• 59.7% of the total of ETB 345.72 billion allotted for recurrent and capital expenditures goes to expenditures related to education, road, agriculture, water, health and urban development.

This BDO Ethiopia publication gives an overview of the budget, and it additionally highlights the key takeaways, budget deficit, revenue budget and expenditure budget.

Click HERE for BDO Ethiopia Review Report