Ethiopia approves $3.5 billion 2005/06 budget

ADDIS ABABA, July 6 (Reuters) – The Ethiopian parliament has approved a 30.4 billion birr ($3.5 billion budget) for 2005/06, an increase of about 37 percent over the previous year to tackle poverty, officials said on Wednesday.

Nearly half of the $3.5 billion budget is expected to be covered through loans and grants from international donors, a report adopted by parliament late on Tuesday showed.

Ethiopia’s budget for 2004/05 was $2.54 billion. Ethiopia’s fiscal year starts on July 8.

The report said of the total budget for 2005/06, 16.3 billion birr will be raised through taxation and state treasury while 13.7 billion birr would be generated through loans, grants and debt cancellation as well as budget support donations.

“The budget approved is in harmony with the government’s strategy on poverty reduction,” the report said.

According to the report, 8.6 billion birr was allocated for a federal budget while 13.5 billion birr is slated as capital budget and 7.8 billion birr is subsidy to regional governments.

The government allocated 3 billion birr for defence, similar to that of the previous year.

Ethiopian Prime Minister Meles Zenawi has said that the country would registered between 8 and 10 percent economic growth during the fiscal year ending later this week, due to improved production capacity boosted by good weather.

The Horn of Africa nation of 72 million, sub Saharan Africa’s second most populous, is Africa’s top coffee producer.