Ethiopia proposes $4.1 bln 2006/07 budget

June 7, 2006 (ADDIS ABABA) — Ethiopia’s Council of Ministers has proposed a 35.4 billion birr ($4.1 billion) 2006/07 budget in sub-Saharan Africa’s second most populous country, state-run media said on Wednesday.

“The birr 35,444,658,999 budget aims at accelerating the Second Five-Year Development Plan which aims at ending poverty and enhancing economic development,” the state-run Ethiopian News Agency said.

Ethiopia is ranked the seventh poorest country in the world. Its budget for 2005/06 was 30 billion birr. Ethiopia’s fiscal year begins in July.

The report said of the total budget for 2006/07, 23.3 billion birr will be raised through taxation while the remainder would come from external sources such as loans and grants.

Of the total budget, 16 billion birr would be for capital expenditure, such as development programmes, and 9.5 billion birr for regular expenditure, like administration. About 9.8 billion birr would be subsidy to regional states.

Western donors had stopped direct budget aid there after two deadly rounds of post-election violence and the subsequent genocide and treason trial of opposition leaders that was criticised as politically motivated.

At least 82 people were killed in clashes with security forces in protests over the election results from May 2005 which the opposition said were rigged.

Britain and the World Bank last month announced a new aid of to $447 million but said the cash would again circumvent the federal government because of concerns about human rights and governance.

The new aid package will fund education, health, water and agriculture programmes at local and regional level for the next 14 months.

The World Bank said the aid was a trial run to give the federal government an incentive to improve the political and human rights situation.

(Reuters)