Ethiopia Plans Extra $2.47 Billion in Spending to Offset War
(Bloomberg) -- Ethiopia's finance ministry proposed an additional 122 billion birr ($2.47 billion) budget to help counter the fallout of a civil war that's destroyed infrastructure, displaced millions, eroded government revenue and deterred investment.
The extra allocation for the financial year ending July 7, which will bring total spending for the year to 683.7 billion birr, will be used for national security, humanitarian assistance and rehabilitating infrastructure, the ministry said in a Facebook post on Thursday.
“The additional budget was needed due to the war in the northern part of the country, the government's inability to meet the current demand for revenue and the need for additional expenditures,” it said.
The extra spending will be funded via domestic borrowing and readjusting expenditure from previously approved budgets, Finance Minister Ahmed Shide said in a text message. Earlier this week, the Council of Ministers agreed to scrap petroleum product subsidies in six months time.
Read more: How Ethiopia's Rift With Tigray Rebels Has Deepened: QuickTake
The conflict between federal forces and dissidents from the Tigray province has coincided with the coronavirus pandemic, and stunted economic growth in what was one of the world's fastest-expanding economies. Gross domestic product grew 6.3% last year, and the International Monetary Fund expects a 2.1% expansion this year.
Manufacturing plants in industrial parks in the Tigray and neighboring Amhara regions have been looted, and transport links, power plants and telecommunications infrastructure have been damaged since the war erupted in November 2020, while farmlands and villages have been destroyed. PVH Corp., manufacturer of brands including Tommy Hilfiger, closed its garment manufacturing plant in Ethiopia in November.
The government's failure to end hostilities has seen western nations withdraw budgetary support and the state has been working to increase domestic tax revenue. The finance ministry had also rescheduled some projects and sought to contain expenditure.
©2022 Bloomberg L.P.
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
