Civil Service Salary Hike on the Cards

Ethiopia’s 1.4 million civil servants will receive salary increments this year after Parliament approved an 18.2 billion Br supplementary budget. About half of the budget will be used to increase civil service salaries. The rest of the budget will be used to set up the Youth Fund, to ameliorate the impacts of last year’s drought and to implement safety net programs, at a cost of five billion Birr, one billion Birr and 1.5 billion Br, respectively.

The major source of income for the budget comes from nontax-revenues, such as aid and income from services, which accounts for more than 64pc of the budget.

Although there has been no confirmation of the percentage raise this year, the last salary raise for civil servants was made three years ago and raised the civil salaries by an average by 39pc.

During the raise for civil service employees in 2010, there was a simultaneous devaluation of currency, which caused inflation to shot up by 40pc, and many businesses raised their prices. However, this time around, measures will be taken to prevent the same thing happening again.

“New money will not be printed and put into circulation,” said Abraham Tekeste (PhD), the Minister of Finance and Economic Cooperation. ‘It is money that is already in the market.”

The current salary increment does not include offices which have already implemented salary raises for professions such as teachers and judges, according to Abraham. A look at the wage bill of the government reveals that last year it spent over 18 billion Br on wages or 2.5pc of the GDP.

A portion of the supplementary budget will also go towards funding the revolving Youth Fund announced by President Mulatu Teshome (PhD) three months ago during the opening session of parliament.

Parliament has already approved half of budget for the fund. The other half is expected to be endorsed during the next fiscal year.

“The approved budget is enough for five months,” Abraham explained. “If the whole budget for the fund had been approved, it would be returned without being properly utilized.”

Two weeks ago, Oromia Regional State approved 6.6 billion Br for the youth fund, with 3.5 billion Br coming from the federal budget and the rest from Oromia Credit and Savings S.C and regional developmental agencies and their partners. Tigray Regional State has also budgeted two billion Birr for the same purpose.

A year ago, Parliament approved a supplementary budget for the same amount, which at the time, was the most that had ever been approved.

A supplementary budget is a request for additional funds by ministries during the course of the year while the regular budget includes income and expenditures that are expected to be received and paid in a year.

The government had budgeted 273 billion Br for the current fiscal year, before the latest request for supplementary expenditure.


Published on Jan 24,2017 [ Vol 17 ,No 873]



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