Ethiopia Seeks Solutions for 310 Billion Birr Deficit Amid Post-Conflict Recovery

Ethiopia’s Ministry of Finance is exploring all options to reduce the federal government’s 310 billion birr deficit, including cutting capital expenditures and seeking external financing.

The deficit has resulted from a combination of sluggish tax revenue growth due to the pandemic and domestic conflict, and increased government spending on war rehabilitation and defense.

Senior economist Alisa Strobel suggests that a larger fiscal deficit of around 4% of GDP is expected this year, emphasizing the need for debt restructuring or direct budgetary assistance.

Efforts to close the budget gap include revising tax laws and increasing domestic revenue, while addressing inflation and reducing government waste and corruption.

ALSO READ: Ethiopia’s Path to Recovery

Ethiopia Dissolves Regional Special Forces, Streamlines Security Structure

Field Marshall Berhanu Jula, Chief of Staff of the Ethiopian National Defense Forces, announced the dissolution of regional special forces, integrating them into federal and regional security institutions.

Ethiopia’s security structure will now consist of the national defense, federal police, and regional police.

The reorganization aims to build a strong national security institution and resolve the security crisis.

Protests and clashes erupted in the Amhara region over the decision, but relative calm and stability have been restored in the past three days.

ALSO READ: Navigating Ethiopia’s Economic Challenges

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