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The Ministry of Finance and Economic Cooperation has alleged that government offices and officials failed to adequately prepare appropriation requests.
While delivering a speech on the budget for the coming year to parliament, Abraham Tekeste (PhD), Minister of Finance and Economic Cooperation (MoFEC), said that government agencies had not planned appropriation requests properly.
Abraham, who was assigned to the position during the recent cabinet reshuffle, came to parliament with a detailed and unusual budget speech. During his speech he blamed some government officials for being unable to come up with a budget request without a detailed clarification.
He said MoFEC will insist that these agencies work harder on their budget allocation and transfer.
In his 25 page budget speech Abraham said that the expected achievement would not occur without following and understanding the goal of governmental policy and managing the allocated budget in a proper manner.
“To do this the government officials who asked for their appropriation are responsible for managing this issue,” he added.
“But the internal and external audit reports indicate that they gave less attention to the budget requests particularly for program budget process and performances. That makes it difficult to evaluate program budget achievement,” he stressed.
He said that the budgetary offices have to understand that they are getting their allocations to achieve the developmental policy of the government, not because the government has excess revenue.
He stated that they have to undertake their operation effectively and clearly.
He appreciated the parliament for its effort to control the government’s ongoing operations and asked it to continue on this path.
Every year Office of the Federal Auditor General reports that huge amount of public money is misused by government offices and the issue has been getting more attention lately.
The MoFEC Minister’s statements are directly related to this issue. He said that they are taking four major steps to alleviate this problem.
The ministry has ratified and implemented a directive as of March that will make the government officials and relevant employees related with budget allocations, accountable he said.
The internal auditors of government offices will be accountable to MoFEC for getting an independent audit report without external pressure. In the current budget year the economic growth is expected to be 11.1 percent, which was 8 percent in the preceding 2015/16 budget year, according to him.
For the coming 2017/18 budget year he proposed a 320.8 billion birr budget allocation. In addition with a supplementary budget the budget allocation for 2016/17 was 292.6 billion birr which is lower by 9.6 percent compared with the proposed budget for the coming year.
From internal sources that includes tax and non tax governmental revenues, external loans and grant 266.9 billion birr will be secured, while the budget deficit will be 53.9 billion birr.
The Minister said that the deficit that is 2.5 percent of the GDP will be covered from internal loans.
The share of tax revenue has taken the lion’s share as usual to fill the proposed budget. In the coming year 196.4 billion birr is expected from tax and related sources which is a 15.1 percent increase compared with the 2016/17 budget year’s projection.
From the total secured or expected to be channeled budgets for the coming year external aid will be 16.5 billion birr, 24.7 billion birr from internal government revenues and the balance, 29.1 billion birr will be from external loans.
Abraham said that much effort is needed to collect the expected tax since it is very large and compared with the current year. In the current budget year the Ethiopian Revenue and Costumes Authority is expected to collect 170.6 billion birr from tax, but for the first nine months of the budget year the collected amount is 98.1 billion birr, which is only 57.4 percent of the total amount expected in the full year.
The recurrent budget has showed a slight increase compared with the preceding year. The recurrent budget allocation is also 1.4 more than the preceding year and is expected to stand at 81.8 billion birr.
The capital budget allocation has been taken the leading share for the last over two decades, while on the current proposed budget allocation for the coming year it has set for second level in terms of shares compared with regional budget.
The proposed budget for the coming year indicated that the capital budget will be 114.7 billion birr, which has a 35.7 percent share compared with the total proposed budget. A year ago the share of capital budget stood at 38.5 percent. The capital budget for 2017/18 has a 10.2 percent increase compared with the current year.
The budget allocation for regional states has taken the lion share compared with the preceding trend. Regions will take 117.3 billion birr for the year with 36.6 percent share. A year ago the regional states budget allocation had 32 percent share from the total approved budget. Compared with a year ago the budget allocation for regions has a 16.9 percent increment.
The capital budget will be covered from the government coffer, through grant and loans. The draft budget indicated that the finance from government treasury will be 80.3 billion birr with a 70.2 percent share and loans and grant will have a 17.7 percent and 12.5 percent share with 20.2 billion birr and 14.3 billion birr respectively. The budget that will be allocated for the Sustainable Development Goal programs is seven billion birr with a slight increase compared with the preceding year. A strong effort is needed to get the expected budget allocation since the major share is from taxes and related sources. Abraham said that the government worked hard to get more developmental finance from external sources.