Tuesday, February 20, 2024
NewsFunds allocated but not disbursed leaves ministry underfunded

Funds allocated but not disbursed leaves ministry underfunded

Nearly half of the 15 billion birr allocated to Ethiopia’s Irrigation Ministry for the last fiscal year went unspent – a staggering 8.9 billion birr in unused funds as the ministry blames delays in disbursals from the Ministry of Finance.

According to an official audit report presented to lawmakers last week, the Irrigation Ministry spent just 40 percent of its budget for fiscal 2021–22, leaving the massive balance of nearly nine billion birr idle.

Ministry officials have hit back at “accusations” of wasting half its budget, instead pointing the finger at Finance Ministry failures to release the allocated funding.

“While the MoF failed to avail the budget, which was initially appropriated by the Parliament, the office should not be judged without the actual money released,” Irrigation Minister Aysha Mohammed told the parliamentary committee.

Most Ethiopian ministries only receive around a third of the funds allocated in their approved budgets, Irrigation Minister Aysha Mohammed told lawmakers.

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“Initially when I heard about the audit gap, I didn’t take it seriously because I had no idea about the funds — they were just numbers on paper,” Aysha said. “I hadn’t received [the money] from the Ministry of Finance.”

While works have been undertaken, actual disbursements were never made, Aysha said.

She argued lawmakers should have questioned the finance ministry about how much of the allocated funds were actually released. “It would have been good if they were asked how much money they utilized from the amount the ministry received,” Aysha said.

Most government ministries face cash flow challenges despite approved budgets, Aysha challenged lawmakers, adding “There is an issue of cash flow for most institutions; it’s a national finance pot.”

Last week, during a parliamentary session on Ethiopia’s 2023-24 budget plan, lawmakers raised the issue of limited cash flow despite approved budgets.

Minister Aysha stated that to cope, the ministry had to “spend its budget very wisely.” The careful spending led to this year’s “condensed budget,” she said.

This week, Parliament approved an 801 billion birr budget for the upcoming fiscal year, reflecting only percent growth from last year.

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Video from Enat Bank Youtube Channel.

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