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10 June, 2008
ADDIS ABABA - Ethiopia plans to increase budget spending in 2008/09 (July/June) by 21 percent to 54.3 billion birr, Finance Minister Sufian Ahmed told parliament on Tuesday.
Sufian said the money would be raised through taxes, loans and grants, debt cancellation and bilateral assistance.
"The birr 54.3 billion budget for 2008/09, which exceeds the current 2007/08 budget by 21 percent, is geared at eradicating poverty, enhancing food security and curbing inflation," Sufian said.
The amount includes 23.4 billion birr for capital expenditure, 13.4 billion for regular expenditure and 16.6 billion birr for subsidies to regional states.
Sufian said food inflation in the drought-prone country stood at 26 percent in May while overall inflation was 19 percent.
Road construction received the biggest allocation of 7.3 billion birr while defence spending went up to 4 billion birr from 3.5 billion last year.
Ethiopia is currently embroiled in a drawn-out conflict in neighbouring Somalia, where it is supporting a transitional government battling an insurgency.
Education and food security each received 2 billion birr and the health sector was allocated 1.8 billion birr.
The budget will be forwarded to the parliamentary budget committee for scrutiny. Full details will only be published when parliament passes it later in the month.
(Reporting by Tsegaye Tadesse; Editing by Gerrard Raven)
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