The Addis Ababa City Administration received 97 percent of the revenue generated in the last budget year of 2023/24.
In the financial year that ended on July 7, 2024, the municipal administration collected 146.8 billion birr, falling short of its target of 151.7 billion birr.
According to the report presented at the annual city council meeting on Wednesday and Thursday, this performance amounted to 96.8 percent of the objective.
Abdulkadir Redwan, the head of the city government’s Finance Bureau, claims that the administration spent 139.2 billion birr during the budget year, accounting for 97 percent of the allocated amount.
The report reveals that about 88 billion birr was allocated for capital expenditures during the period, while 51.3 billion birr, or 37 percent, was earmarked for the recurrent budget.
Compared to the previous budget year of 2022/23, spending increased by 37.2 billion birr, or 36.5 percent.
For the 2024/25 budget year, the city administration’s goal is to complete development projects in line with the 10-year strategic plan.
According to the bureau head, “Some of the priority areas include the corridor project, completion of condo housing projects, improvement of the water and sewerage system, road sector development, and tourism projects.”
Budget allocations also prioritize improving access to public transportation, reducing poverty, and creating jobs.
Abdulkadir further stated that in order to meet the planned expenditures, the city administration focused on improving tax collection and other income streams during the budget year.
Increasing the tax base and coordinating efforts, along with digitization and enhanced law enforcement activities, are crucial areas mentioned to boost local revenue.
Additionally, the city administration plans to increase non-tax sources of income to fund initiatives through land leases and other means.
Regarding municipal revenue, tariff adjustments, service modernization, car park income reform, and property tax updates are anticipated.
The city government has approved a budget of 230.4 billion birr for the 2024/25 budget year, a 42 percent increase of 68.3 billion birr from the previous year.
The city government states that the majority of the budget’s revenue for the year will come from local sources, with 226.5 billion birr, or 98.3 percent, and the remaining 3.8 billion birr coming from overseas loans and aid, as announced by the bureau head at the municipal council meeting on Thursday, June 18.Tax income will provide 150.9 billion birr, or 66.3 percent, of the specified local source generation. There will be a 48.8 billion birr, or 48 percent, increase in tax revenue compared to the previous year. The capital city administration aims to accumulate 43.5 billion birr from non-tax sources, primarily from public office services, government investment, and other sources. This represents a 20 billion birr or 116% increase from the same period last year.
The head of the Finance Bureau claims that municipal services will contribute 31.5 billion birr in the 2024/25 budget year. It is anticipated that municipal revenue will increase by 5.3 billion birr, or 22.5 percent.
In the year, 74.5 billion birr, or 32 percent of the budget, is allocated for the recurrent budget, with the remaining 147 billion birr going toward the capital budget.
According to the ratified budget, 75.6 percent, or 174.2 billion birr, of the entire budget is allocated for sectoral offices within the city government. The bureau head said, “Of the stated amount, the recurrent share is 18.8% and more than four-fifths, or 132 billion birr, is allocated for capital expenditures.”
The construction sector is expected to receive 38.7 billion birr from the allocated capital expenditure, with the water and sewerage, education, road development, and health sectors receiving allocations of 18.3 billion, 18 billion, 17.9 billion, and 12 billion birr, respectively.
The budgetary allocation for sectoral offices has increased by 56.3 billion birr, or 48 percent, compared to the fiscal year 2023/24. Additionally, the 11 subcities are allocated 56.6 billion birr, a rise of more than 25% compared to the same time last year.
Abdulkadir emphasized that the municipal administration’s goal is to obtain the necessary funds from tax sources. Mayor Adanech Abiebie stated, “Different initiatives, including strong law enforcement and modernization schemes, will be applied during the year to expand tax collection.” She added, “This is because the city administration’s revenue generation is significantly below its capacity.”