The Ministry of Finance and Economic Development (MoFED) has set a maximum limit on federal government offices’ 2013/14 fiscal year budget applications.
According to our sources, for the coming fiscal year that commences on July 7, 2013, MoFED, which is responsible for allocating annual federal budgets, has decided early on to allocate a specific budget for every ministry/sector and sent it to them so as to allow them to prioritize and operate within their allocated budgets. Previously, the Ministry office used to ponder on initial budget requests submitted by the relevant offices and made adjustments, either approving or reducing the requested budget according to its merits.
Our sources indicated that the maximum budgets allocated by the Ministry for use by government offices only considers the amount that it will release from government coffers, while the finance that is expected from donors and loan providers will not be included. This means that the relevant office will secure additional funds from external sources to undertake projects that are down the list of its priorities and cannot be covered by government resources.
“As usual, the leading federal budget end user, the Ethiopian Roads Authority (ERA), will be allocated the biggest governmental budget in the upcoming fiscal year,” sources said.
Our sources pointed that MoFED has set 20 billion birr aside and sent the information to ERA to allow them to analyse and prioritize ongoing and planned projects based on the stated amount. For the current fiscal year (2012/13), MoFED allocated 17 billion birr for use by the Roads Authority, which undertook huge road projects throughout the country.
Including finances from other sources, like international loan providers and donors, the authority secured 21.8 billion birr in the 2012/13 fiscal year. ERA is the major federal office that secures the lion’s share of the budget and supplementary budget allocation every year, but still the allotment doesn’t always meet the demand or budget request for all projects that are scheduled to be carried out every year.
In the current fiscal year, the Ministry hasn’t been unable to make up for the budget deficit that was expected to narrow down in the past months. From a total budget allocation of 137 billion birr in the 2012/13 fiscal year, 26 billion birr has still not been secured.
According to experts, this kind of budget limitation shall set and revise the budget projection of government offices based on the maximum amount allotted to them.