It took four hours of intense debates to approve the federal budget of Ethiopia. The budget for the current financial year is 476 billion birr which makes it the largest budget in the history of Ethiopia. In fact, it is 83 billion birr higher than the previous financial year’s federal budget.
The Ethiopia federal government is targeting to raise 272 billion birr from taxation. This is 64 percent of the budget for the year. Pundits have already indicated that this is overambitious considering the various challenges facing the Ethiopian economy. Hence, it isn’t clear how the federal government will raise these revenue unless they print the money.
Historical performance in revenue collection shows that Ethiopia had collected 82% of what they had planned to collect during the previous financial year.
This means that, Ahmed Shide, Ethiopia’s finance minister has to scratch his head in order to come up with a water proof formula for raising the required revenues in the face of Covid-19 pandemic outbreak.
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