Subsidization

As June ends and the 2012/13 budget year comes to a close, government offices at the federal and regional levels have been on the rush to reconcile their accounting for this fiscal year and defend their proposals for the next. The 2013/ 14 budget year, from July 1, 2013- June 30, 2014, is set to see a federal budget close to ETB155 billion.

In the Government’s new spending plan, the recurrent budget amounts to around ETB32 billion. The nation’s capital expenditure is proposed to be ETB64 and a half billion while the costs for the Millennium Development Goals will be covered with ETB15 billion. The balance, ETB43 and a half billion is set to be forwarded to regions as unconditional budget grants.

The new subsidy formula was a point of contention, as always, when introduced in May, 2012. And according to this formula, the highest subsidy, close to ETB14 billion will go to the Oromia National Regional State followed by the Amahara National Regional State with ETB10 billion. Southern Nations, Nationalities and Peoples Regional State will be provided with ETBeight and a half billion while Somali National Regional State will be subsidized with a little less than ETBthree and half billion. Tigray Regional State will take a little more than ETBthree billion and Afar National Regional States’ subsidy amounts to ETB1.3 billion.

Benshangul-Gumz Regional State will be given about ETB864 million and Hararri People’s National Regional State will get ETB425 million. Gambella Regional State will take ETB840 million while, the two administrative towns of Dire Dawa Administration and Addis Abeba City Government will be given around ETB494 million and ETB215 million respectively.

The proposed federal budget for the year 2013/14 shows an increase of 12.3 Pct from the previous year.

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