A budget proposal prepared by the Ministry of Finance and Economic Development (MoFED) of Ethiopia has rejected foreign trip budget requests of all federal institutions, with the exception of the country’s Ministry of Foreign Affairs. This is due to the fact that foreign currency reserve in the country has been diminishing.
The severe decline of foreign currency reserve and a widening gap in trade balance have been given as the principal reasons that prompted the ministry of finance to take the strict measure, according to the document sent to government ministries, which restricts spending on government travels.
This comes in a backdrop of severe shortages in the country’s export industry’s rather positive initial estimations. According to reports only 1.02 billion US dollars has, so far, been received from exports. This represents only 56 per cent of a nine month performance target. According to official sources, the nine month revenue, as per the target, should have reached at least 1.8 billion US dollars.
Ethiopia, a few weeks ago, was reportedly only left with a total of 1.2 billion dollars, an amount that would allow for only a month’s import.
Though the ministry has rejected foreign trip budgets, important travels will undergo scrutiny at the office of the Prime Minister, who will decide whether or not a trip should be financed based upon its importance.
The budget proposal is up to a tune of 64.5 billion birr for the next Ethiopian fiscal year. Roads and Highways, health and the military are the three main sectors that will be allotted the highest budget. 4 billion birr will go to the country’s national defense ministry.
The shortage in foreign reserve has also been partly blamed on the government trying to make up for a possible cement supply crunch in the construction sector by importing two million quintals of cement from Pakistan and Yemen between the months of June and July.