10.2 percent economic growth set for next ten years
In trying to cope with the growing need of the economy and the current global pandemic shaking the financial markets around the world, the Government of Ethiopia has presented a 476 billion birr budget proposal to the House of People’s Representatives (HPR) for the upcoming fiscal year of 2020/21.
During the 6th regular session of the House, held on Thursday at the conference Hall of the Office of the Prime Minister, MPs were briefed by the Minister of Finance, Ahmed Shidie, on the contents of the draft budget bill, which mainly comprises of Recurrent and Capital Expenditures of some 133.3 and 160.3 billion birr respectively.
In addition, out of the total budget, around 176.4 billion birr will be dedicated for regional states subsidy, while some 6 billion birr is proposed to finance Sustainable Development programs.
Meanwhile, ### billion birr will go towards debt payment to local and foreign lenders.
Defending the budget, the Finance Minister told the House that unlike before, the 2020/21 draft budget bill was prepared keeping in mind maximizing input and outcome correlation and minimizing COVID-19 induced negative effects on the economy.
According to the Minister, the latest proposal shows an increase in the amount by about 30.6 billion birr, more than what was presented in the previous year, amounting to an increase by about 7 percent than last years endorsed budget which was around 445.4 billion birr.
According to him, with this budget, the Ethiopian economy is anticipated to expand by 8.5 percent in 2020/21 fiscal year.
However, MPs challenged the minister questioning him on how much the stated growth forecast is realistic while the country is already facing the impacts of the COVID-19 pandemic.
Responding to the questions, Ahmed told the House that “During the current year, we have achieved a very big feat in our economic performance, amid the unprecedented coronavirus. Hence, since we have succeeded the first year of hardships, we have a strong conviction that there is nothing that could prevent us from achieving at least the 8.3 percent growth by next year.”
Earlier on Monday, Prime Minister Abiy Ahmed (PhD) appearing before the HPR explained that due to the government’s meticulous leadership and commitment for the effective execution of policies and projects, the country’s economy has been performing well during the COVID-19 crisis.
The PM, admitting Ethiopia’s predicted annual economic growth has dropped from nine percent to six percent due to the effect of the pandemic, told MPs that a six percent economic progress is “a unique success, keeping in mind that many nations in the world are struggling to register even a one percent increase on their economies.”
During Thursday’s session, Ahmed briefed MPs on the detail issues of the draft bill.
After a moderate debate on the bill, the House voted in favor of it with no objections. The draft bill was then referred to the Budget, Revenue and Finance Affairs Standing Committee for further revisions.
After going through the revisions, the Standing Committee is expected to bring the draft bill to the floor of the House for a final vote at the end of this month, before the end of the House’s final term.
In a related development, on Thursday, the Planning and Development Commission unveiled the government’s new blueprint, which details a 10-year development program, where at least a 10.2 percent average annual economic growth is set to be achieved over the next ten years.
The Commissioner of Planning and Development Commission, Fistum Assefa made this remarks during a discussion held on the draft 10-year Development Plan in the presence of Prime Minister Abiy Ahmed and other high ranking government officials, chief administrators of all regional states as well as Mayors of Addis Ababa and Dire Dawa.
According to Fitsum, the ten year plan is entitled ‘Ethiopia: An African Beacon of Prosperity,’ developed based on the performance of previous plans, the nation’s vision for 2030, National Policies and Strategies, as well as the various International and Continental agreements.
Though Ethiopia has registered an annual average economic growth of nine percent in the previous Growth and Transformation Plan (GTP), it was unable to further sustain the growth, the Commissioner pointed out. However, the new plan is different from the previous national plans, as it is believed to bring about a concrete changes in the living standards of citizens, by maintaining an annual economic growth of 10.2 percent over the next ten years, she said.
According to Fisum, Agriculture, Manufacturing Industries, Mining, Tourism, Urban Development, Innovation and Technology are the key development sectors of the ten year plan.