Ethiopia’s parliament on Tuesday approved a record federal budget of 2.34 trillion birr (about $14.6 billion) for the 2026/27 fiscal year, marking a 21.3 per cent increase over the previous year’s allocation.
The new fiscal year begins on July 8, 2026, with the government projecting 1.49 trillion birr in tax revenue, while 93.7 billion birr is expected to come from loans and grants provided by development partners.
Presenting the budget report to the House of People’s Representatives, Chairperson of the Plan, Budget and Finance Affairs Standing Committee, Desalegn Wedaje, said a significant portion of the budget would be directed toward priority sectors, including education, healthcare, agriculture, road infrastructure, energy expansion and urban development.
The report also earmarked 187.3 billion birr, representing 15.1 per cent of the total budget, as subsidies for Ethiopia’s regional states. The allocation reflects an increase of 28.4 billion birr, or 17.8 per cent, compared to the previous fiscal year.
Despite endorsing the spending plan, lawmakers expressed concern over persistent weaknesses in public financial management. Wedaje cited findings by the Auditor General, which revealed continued breaches of financial regulations by some government institutions.
He urged ministries and agencies to ensure prudent use of public funds, improve spending efficiency and strengthen accountability in budget implementation.
The committee chairperson also raised concerns over delays affecting several road infrastructure projects, warning that the setbacks had increased project costs and created governance challenges. He called on relevant authorities to accelerate project execution and ensure prompt compensation for citizens whose land has been acquired for road construction.
Following deliberations, lawmakers approved the record budget by a majority vote, reinforcing the government’s commitment to expanding investment in key development sectors while addressing concerns over fiscal discipline and project delivery.
