Ethiopia-Economy

Ethiopian parliament to revise budget subsidy to regional states

APA-Addis Ababa (Ethiopia)

The Ethiopian parliament, in its fourth year and second regular meeting, has decided to revise the existing budget subsidy allocation formula in which regional states receive financial support from the federal government.

Briefing journalists on Saturday House of Federation Speaker Keria Ibrahim said the decision to revise the laws was reached by the parliament  in order to ensure fair federal and regional budget allocation formula, and federal subsidy budget to regions.


The existing budget subsidy allocation of budget subsidies to the regional states, which sometimes called unconditional budget grants, has been developed based on the findings of a detailed quantitative assessment of the population size, the relative expenditure needs and revenue raising potentials of the regions. 

In an attempt to redress the imbalances among the developed and the less developed regions, one percent of the total subsidy budget was given to Somali, Benishangul-Gumuz, Afar, and Gambella regions unconditionally.


According to her, experiences of other countries are already bench-marked for better standards and systems, federal and regional joint budget allocation formula that have not been revised for the past 20 years.


The law regarding federal and regional joint budget allocation formula will be implemented after two years.


The revision of the laws will help to ensure fair distribution of budgets and capital project distribution, Keria added.


The speaker stated that the decisions were made considering the current political, economic and social changes of the country.


The existing budget formula, which has been in place for the last 22 years was supposed to be revised in 2016. 

However, the revision was not made due to the controversy over the exact population size of the regions and other related matters.


MG/as/APA

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