Ethiopian lawmakers have approved a 13.6 percent increase in the country’s budget for the 2016/17 fiscal year with most of the expenditure expected to go to infrastructure such as roads.
The 274.3 billion birr (about $13 billion) budget is geared towards stimulating economic development in the drought-hit country. Ethiopia’s new budget cycle begins on July 8.
We will respond to every provocation it takes to destabilize us
On Tuesday the House of Representatives gave its approval to the budget where 105.7 billion birr was allocated to capital and 68.8 billion birr for recurrent expenditure.
Another 87.87 billion birr and 12 billion birr were allocated to the regions’ as budget subsidies and for activities meant to help the country achieve sustainable development goals, respectively.
The government plans to spend 46.39 billion birr on roads and allocated another 39.8 billion birr to programmes meant to improve the education sector in the coming fiscal year.
Prime Minister Hailemariam Desalegn had told legislators that Ethiopia’s economy will grow at a slower rate than originally projected this year.
He cited the impact of the El Nino induced drought, which has significantly affected the agricultural sector as one of the factors that would affect economic growth.
The government now expects a 8.5 percent economic growth for 2016. However, the projection is much higher than that of the International Monetary Fund (IMF) made earlier this year.
IMF said Ethiopia’s economic growth would be “held back by a drought with growth projected to decline substantially to 4.5 percent” this year.
Over 10.2 million people are currently in need of food aid in the country, according to humanitarian agencies.
Hailemariam also used his parliament address, which was televised on national television, to warn Eritrea against threatening peace in the region. He said his government would continue to respond ‘appropriately’ to any provocation from Eritrea.
“We will respond to every provocation it takes to destabilize us,” he told MPs, blaming Eritrea for the recent border skirmishes between the two countries.
He said Eritrea did that to divert attention away from the findings of a recent United Nations report, which accused officials in Asmara of committing crimes against humanity.