Ethiopian Lawmakers Will Vote on Proposed Budget Next Week

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Ethiopian lawmakers will vote next week on a proposed 39 percent increase in spending to fund infrastructure programs and projects aimed at improving food security, a Finance Ministry official said.

Expenditure will rise to 117.8 billion Ethiopian birr ($6.9 billion) in the fiscal year to July 7, 2012, while revenue and foreign grants are forecast to grow 40 percent to 100.6 billion birr, Haji Ibsa Gendo, a spokesman for the ministry said in an interview in Addis Ababa, the capital, yesterday. External loans will provide 6.6 billion birr and domestic borrowing 10.5 billion birr to fund a deficit that is less than 1.5 percent of gross domestic product, Haji said.

Ethiopia is the world’s second-biggest recipient of foreign aid, after Afghanistan, according to Organization for Cooperation and Economic Development rankings of developing nations. The Horn of Africa country, which is also Africa’s largest coffee producer, recorded an average economic growth rate of 11 percent over the past seven years, according to government data.

From the budget, about 16 billion birr will be spent on a road-building program; 8.5 billion on education; 6.5 billion on defense; 4.6 billion on irrigation; 4.4 billion on projects related to food security; and 2.7 billion on health, Haji said.

Spending on an under-construction $4.7 billion, 5,250- megawatt hydropower project isn’t included in the budget as it will be financed by the public, not the government, Haji said.

“The Ethiopian population has agreed to build the Grand Renaissance Dam,” he said. “All workers are giving one month salary, traders are buying bonds, the diaspora is contributing to the dam.”

The vote by lawmakers will take place on July 5.

To contact the reporter on this story: William Davison in Addis Ababa via Nairobi at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson in Nairobi at pmrichardson@bloomberg.net.