Gov’t spent 211 bln on subsidies over nine-month period

Officials at the Ministry of Finance say the recent debt restructuring agreement with creditors will save Ethiopia USD 3.5 billion over the coming three years.

The figure was cited in the Ministry’s nine-month performance report, which relays that the restructuring has reduced the USD 2.8 billion expected from Ethiopia each year for debt service to USD 1.95 billion.

The Ministry indicates that gross international reserves have surged by 204 percent during the first three quarters of the fiscal year, reflecting a jump in foreign currency earnings.

Commercial banks and the state-owned Development Bank of Ethiopia (DBE) generated USD 445 million in foreign currency, while remittances brought in close to USD 3.7 billion (up from USD 2.3 billion last year), according to the report.

Total forex receipts for the past nine months stood at USD 8.1 billion, while the country’s import bill registered at USD 7.7 billion, according to the Ministry.

The first nine months of the financial year have also seen a rise in export earnings, according to the report. Agricultural exports generated USD 2.6 billion, while another USD 2.1 billion was registered in mineral exports. The latter is a 368 percent jump from last year’s figure.

A total of 26 tons of gold was supplied to the National Bank of Ethiopia (NBE) during the reporting period, up from just three tons last year.

Electricity and manufacturing exports remain below the USD 300 million mark, according to the Ministry.

Foreign direct investment (FDI) remains constant at USD 2.4 billion, according to the report.

The federal government received 224 billion birr in foreign loans and aid, according to the report, while its total revenue over the nine-month period stood at 921 billion birr, more than double the number registered last year.  The surge is mainly driven by tax income, which jumped from 374 billion birr last year to 653 billion birr in the last nine months.

The Ministry indicates that although the government planned to disburse 1.27 trillion birr over the reporting period, only 852 billion birr was recorded.

The government spent 211 billion birr on subsidies over the first three quarters of the year, with the safety net program accounting for 42 billion birr, another 62 billion on fertilizer, and 60 billion birr on fuel.