Agricultural production and productivity, accomplishing ongoing projects, rehabilitation and resettlement of the displaced, and security are the priorities in the new budget year.
Prime Minister Abiy Ahmed who appeared in parliament for the second time in under a month and this time to provide clarification about the past budget year and for the ratification of the 2022/23 budget said that despite several challenges having occurred in the 2021/22 budget year, the performance attained was promising.
He stated that despite security challenges forcing some revenue administrations and businesses to be interrupted, in the first 11 months of the budget year, the government was able to collect 93 percent of the revenue of the target.
He clarified that the target was to collect 330 billion birr in 11 months, while 309 billion birr was attained which is still a 19.4 percent increment compared with the same period of the preceding year.
The PM assured that the government will focus its acceleration on the development which it registered in the past years.
He added that the priorities will have four pillars; agricultural production and productivity, accomplishing ongoing projects, rehabilitation and resettlement of displaced, and expanding the national defense capacity.
Abiy added that 59 percent of the budget will be channeled for poverty reduction.
He added that the budget deficit shall be mainly covered by sources other than direct advance, which is stated as a major source of inflation.
The PM boosted by the success of export earnings from goods and services, explained that USD 10 billion was secured.
Abiy said that the service export contributed USD six billion by expanding 25 percent in comparison to the preceding year.
He appreciated his macro team for the success of the foreign currency earnings.
The reform applied to the financial industry has also boosted the sector activity and the private sector.
He said that the number of branches and savings had expanded significantly, “in the budget year, 353 billion birr has been provided in loans.”
From the total loan disbursement in the budget year, over one third or 34 percent in financing flowed to the agricultural and related sector.
He said that importing substations was crucial to tackling inflation, “25 percent of food items are imported. How can we import mango? We ought to build upon our agricultural experiences for our benefit,” he added.
He strongly stated that the country will commence wheat export by the coming budget year. Every year the country has allocated over a billion dollars to import the grain, while the initiative that was introduced a couple of years ago to produce wheat during the dry season besides the regular harvest time has contributed to reduce the import volume.
Abiy said that the government is undertaking different preparations to expand the sector production up to introducing export.
According to the PM, regarding some mega projects like Gorgora, Koisha, Wonchi and projects in the capital will be accomplished starting from the first quarter of the budget year.
In the 2022/23 budget year, 786.6 billion birr has been ratified; the gap is 231.4 or over 29 percent which will be covered by domestic and external sources. The deficit is 3.4 percent of the GDP which is stated as above the recommended three percent of the GDP.
The major portion, 224.5 billion birr of the budget deficit will be covered by local sources whereas the remaining 6.9 billion birr will be sourced from foreign creditors.