MPs Mull over Request for Eight Billion Birr Supplementary Budget


Supplementary budget request targets revenue from non-tax incomes and the total raised is expected to exceed the sum requested




Government, after announcing a salary increase to all civil servants in the country in 2014, without having clear budgetary provision and assessed demand from the regional governments, has now come to request Parliament’s approval of a supplementary budget to cover the shortfall caused by the salary increase.

The request presented to Parliament on Tuesday, April 14, 2015 stated that the surplus that was in the government’s coffer for the Budget year 2014/15 was not enough to cover the whole expense incurred because of the salary increase.

“The major reason why the supplementary budget is needed is because of the salary increase made by the government for the budget year 2014/15 and the reserve that the country had could not cover that expense,” states the document.

It was on August 3, 2014 that the government announced the salary increase of 33pc to 46pc with the bigger percent going to the lower paid employees. Then the government had six billion Br in reserve whereas the required amount was 14 billion Br; the recent request was to fill the gap created. An additional eight billion Br. Was therefore needed.

“This was done because the salary increment was unbudgeted and the requested money will be used to cover the amount of expense,” Haji Ebsa, Public Relations & Information Directorate Director of the Ministry of Finance & Economic Development (MoFED) told Fortune.

But this is not easily swallowed by economic and finance experts.

“The source of the budget and the required amount needed to be identified ahead of implementation- this is not the right thing to do,” says Abebe Yitayew (PhD), a senior lecturer at Addis Abeba University’s Faculty of Business and Economics Department of Finance and Accounting.

Haji, pointed out that the government had not asked for a supplementary budget in four years, said that the salary increase had not been budgeted because of lagging assessment results that had to be sent to the Ministry by the regional governments. Then the budget was distributed to the regional and federal government based on the prior year’s budget which affected the government’s ability to pay in the future.

To cover the requested supplementary budget, revenue will be raised from non-tax incomes and this is anticipated to surpass the budget estimate, according to the document.

The identified sums and sources are six billion Br from the fuel subsidising fund, 900 million Br from the National Bank of Ethiopia’s residual surplus, 485 million Br from sale of government enterprises, and 615 million Br from miscellaneous incomes.

The budget disbursement was first made based on estimations of the expense but now the required budget is clearly known and that is why MoFED requested this sum, according to Haji. The revenue is allocated for the coverage of all regions’ expenses over three months.

The budget that the government set for the whole fiscal year was 178.6 billion Br which did not include the salary increase that came later.



By BROOK ABDU
FORTUNE STAFF WRITER

Published on April 20, 2015 [ Vol 15 ,No 781]


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