Governments have an odd habit. They like to spend tomorrow’s money today. There is nothing especially Ethiopian about this. It is almost universal. Politicians everywhere discover that the future is a remarkably accommodating creditor. It never votes. It never protests. And it always seems willing to wait for repayment.
Ethiopia’s new budget follows this familiar tradition.
At 2.34 trillion Birr, it is the largest budget in the country’s history. We are told this reflects confidence. Confidence in growth. Confidence in reform. Confidence in the future.
Perhaps.
But budgets, like households, eventually reveal not what people hope for, but what they can actually afford.
A closer look tells a more restrained story. More than half the budget goes to keeping the machinery of government running. A substantial portion goes to paying for yesterday’s debts. Comparatively less is left to build tomorrow’s productive economy.
There is nothing scandalous about paying debts. Quite the opposite. Nations that borrow must honour their obligations.
The curiosity lies elsewhere.
If more taxes are collected only to finance larger recurrent expenditures and service old debts, one begins to wonder where economic transformation is expected to come from. Prosperity rarely arrives because governments become better at collecting revenue. It usually arrives because businesses become better at producing wealth.
That distinction matters.
Governments produce budgets.
Businesses produce income.
The former redistributes resources. The latter creates them.
Which brings us to another curiosity.
This budget arrives immediately after a national election, yet it is being approved by a Parliament whose political life is drawing to a close.
Legally, there may be nothing unusual about this. Constitutions are designed to prevent governments from running out of money merely because elections intervene.
But legality and wisdom are not always identical twins.
One might have thought that a budget of this magnitude, the largest in Ethiopian history, would provide an ideal opportunity for the newly constituted Parliament to debate the country’s economic direction.
Instead, yesterday’s Parliament is deciding how tomorrow’s Parliament will spend tomorrow’s money.
Perhaps the outcome would have been identical. Given the composition of Parliament, few expect dramatic fiscal rebellions.
But that is not really the point.
The purpose of parliamentary debate is not necessarily to defeat a budget. It is to improve one.
When approval becomes almost certain, scrutiny becomes even more important. Certainty has a curious way of encouraging complacency.
Governments, like all large institutions, benefit from difficult questions. Not because they enjoy answering them, but because economies are generally healthier when assumptions are challenged before they become policies.
The budget itself reflects an understandable dilemma.
The government seeks fiscal discipline while simultaneously carrying a heavy debt burden. It seeks growth while increasing taxation. It promises transformation while much of its spending is committed long before the fiscal year even begins.
These are not uniquely Ethiopian contradictions. They are the arithmetic of governments that have promised more than their economies can comfortably finance.
The real question is not whether this budget is huge.
The question is whether it brings Ethiopia materially closer to becoming a more productive economy.
Budgets, after all, are not judged by the applause they receive when they are announced.
They are judged years later by the factories that were built, the businesses that expanded, the jobs that appeared and the prosperity that followed.
Everything else is bookkeeping.
