Report No. 20810-ET Ethiopia Public Expenditure Review · Report No. 20810-ET Ethiopia Public...

Report No. 20810-ET

EthiopiaPublic Expenditure Review(In Two Volumes) Volume ll: Appendixes and Statistical Tables

August 31, 2000

World Bank Country Office in EthiopiaCountry Department 6Africa Region

Document of the World Bank

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GOVERNMENT FISCAL YEARJuly 8 - July 7

CURRENCY EQUIVALENTSCurrency Unit: Ethiopian Birr (Br)

Official Rate: US$1.00-Br 8.239 (August 12, 2000)

ACRONYMS AND ABBREVIATIONS

ADB African development Bank MEFF Macroeconomic and Fiscal FrameworkADF African Development Fund MTEF Medium-Term Expenditure FrameworkARM Annual Review Meeting MEDAC Ministry of Economic Development and CooperationBRDM Budget Reform Design Manual MoE Ministry of EducationCDF Comprehensive Development Framework MoH Ministry of HealthCIDA Canadian International Development Agency MoF Ministry of FinanceCSA Central Statistical Authority NBE National Bank of EthiopiaCSR Civil Service Reform NFSP National Food Security ProgramDFID Department for Intemational Development NGO Non-Governmental OrganizationDPPC Disaster Preparedness and Prevention Commission O & M Operation and MaintenanceEC European Commission OECD Organization for Economic Cooperation and DevelopmentEFY Ethiopian Fiscal Year PEM Public Expenditure ManagementESRDF Ethiopian Social Rehabilitation and Development Fund PEP Public Expenditure ProgramEMCP Expenditure Management and Control Program PER Public Expenditure ReviewESDP Education Sector Development PFP Policy Framework PaperEU European Union PIP Public Investment ProgramFIS Financial Information System PMO Prime Minister's OfficeFY Financial Year PIM Program Implementation ManualFSP Food Security Program PRSP Poverty Reduction Strategy PaperGDP Gross Domestic Product RFB Regional Finance BureauGNP Gross National Product SDP Sector Development ProgramGoE Government of Ethiopia SIP Sector Investment ProgramHICES Household Income, Consumption and Expenditure Survey SNNPR Southern Nations, Nationalities and People's RegionHIID Harvard Institute for International Development SPA Special Partnership with AfricaIIIPC Highly Indebted Poor Countries TA Technical AssistanceHSDP Health Sector Development Program TWG Technical Working GroupIDA International Development Association UNDP United Nations Development ProgramIMF International Monetary Fund USAID United States Agency for International DevelopmentIPF Indicative Planning Figure WMS Welfare Monitoring SurveyJRM Joint Review Mission WMU Welfare Monitoring Unit

Vice President Callisto MadavoCountry Director Oey Astra MeesookSector Manager Frederick KilbyTask Team Leader Duvvuri Subbarao

Contents

Appendix I ..................................................... 1

RECOMMENDATIONS FROM PREVIOUS PERS ..................................................... 1STATUS OF RECOMMENDATIONS OF PREVIOUS PERS ...................................................... , 9

Reconimendations ..................................................... 9Status Of Follow-Up .......................................... 10

Appendix 2 ..................................................... 13EXPENDITURE MANAGEMENT AND CONTROL PROGRAM ..................................................... 13INTRODUCTION ..................................................... 13

PIP And Medium Term Expenditure Planning ..................................................... 14Financial Calendar ..................................................... i6Accounts Project: Cost Centers And Budget Coding ..................................................... 18Aid Management ...................................................... 19Outlook And Constraints ..................................................... 19

SELECTED DOCUMENTS ..................................................... 20

Appendix 3 ..................................................... 21MEDIUM TERM EXPENDITURE PLANNING IN SOUTH AFRICA ..................................................... 21

Origins ..................................................... 21How It Works ..................................................... 21Gains From MTEF ..................................................... 22Critical Success Factors. ..................................................... 23

Appendix 4 ..................................................... 25

ETHIOPIA - FOOD AND FOODGRAIN PRODUCTION 1985-98 ..................................................... 25

Appendix 5 ..................................................... 27

OUTPUT AND OUTCOME INDICATORS IN EHIOPIA ..................................................... 27Trends In Welfare Indicators From The WMSS ..................................................... 27WMS Indicators For Education ..................................................... 28WMS Indicators For Health ...................................................... 29WMS Indicators For Water Supply ........................................... 30Outputs/Outcomes Indicators In Key Sectors ..................................................... 30Education Sector Key Performance Indicators ........................................... 30Health Sector - Key Performance Indicators .......................................... 33Roads Sector - Key Indicators .. ........................................ 34Agriculture And Food Security Program Indicators ........................ ................... 35Water Sector .......................................... . 37

Appendix 6 .......................................... 39STATISTICAL APPENDIX TABLE ................... ........................ 39

Appendix Table 1 Fiscal trends, 1986/87 - 1999/00 (in million birr) ......................................... 39Appendix Table 2 Fiscal trends, 1986/87 - 1999/00 as a percentage of GDP ............................. 40Appendix Table 3 Functional classification of general government expenditures (recurrent

and capital), 1986/87 - 1999/00 ............................................................... 41Appendix Table 4 Functional classification of general govermment recurrent expenditures,

1986/87- 1999/00 ................................................................ 42Appendix Table 5 Functional classification of general government capital expenditures,

1986/87- 1999/00 ................................................................ 43Appendix Table 6 Economic classification of general government expenditures, 1986/87

- 1999/00 ............................................................... 44Appendix Table 7 Development in defense expenditure, 1986/87 - 1999/00 ............................. 45Appendix Table 8 Real per capital expenditure, 1986/87 - 1999/00 .......................................... 46

Appendix Table 9 Budget transfers to regions - 1993/94 -1999/00 million birr ....................... 47Appendix TablelO General govermnent revenue and external grants, 1986/87 - 1999/00

1/ ( in million birr) .............................................................. 48Appendix Table 11 General government revenue and extemal grants, 1986/87 - 1999/00

1/ as a percentage of total revenue and extemal grants ............................... 49Appendix Table 12 Functional classification of general govermment recurrent

expenditures, 1993/94 - 1999/00 (in million biff) ..... 50Appendix Table 13 Functional classification of federal govemment recurrent

expenditures, 1993/94 - 1999/00 In million birr ........................................ 51Appendix Table 14 Functional classification of regional government recurrent

expenditures, 1993/94 - 1999/00 (in million birr) ...................................... 52Appendix Table 15 Functional classification of general govermnent capital expenditures,

1993/94 - 1999/00 (in million birr) ........................................................... 53

Appendix Table 16 Functional classification of federal govermment capital expenditures,1993/94 - 1999/00 (in million birr) .......................................................... 54

Appendix Table 17 Functional classification of regional government capital expenditures,1993/94 - 1999/00 In nillionbirr ............................................................ 55

Appendix Table 18 General governuent revenue and external grants, 1993/94 - 1999/00(in million birr) ............................................................... 56

Appendix Table 19 General government revenue and external grants, 1993/94 - 1999/00as a percentage of total revenue and grants ................................................ 57

Appendix Table 20 Federal govermment revenue and external grants, 1993/94 - 1999/00(in million biff) . .............................................................. 58

Appendix Table 21 Federal government revenue and external grants, 1993/94 - 1999/00as percentage of total revenue and grants . ................................................ 59

Appendix Table 22 Regional govermnents' revenue and external grants, 1993/94 -1999/00 (in million birr) .............................................................. .60

Appendix Table 23 Regional govermnents' revenue and external grants, 1993/94 -1999/00 as a percentage of total revenue and grants ................................... 61

Appendix Table 24 Ethiopia selected Macroeconomic Indicators .............................................. 62

ApPendix 1

RECOMMENDATIONS FROM PREVIOUS PERS

Ref. Recommendation Current Status Comment

PUBLIC EXPENDITURE MANAGEMENT SYSTEM

PERs 1997 and 1998 IMTEF, Budget and Accounts Reform]PER97 Prepare a three-year M1EF to set background for future budget The Macroeconomic and Fiscal Framework(MEFF) is an See discussion in

p. ix planning and ensure consistency between SDPs and overall annual exercise through the PIP. Preparation of Public Chapter 3 and

¶3.43; ¶1.14 macroeconomic framework Investment Programs (PIP) has begun, and will lead to a full Appendix 2.

PER98, Better co-ordination and synchronisation of the work on Public Expenditure Program. This provides a potential See discussion in

¶8, ¶1.34 MTEF/PIP and the Sector Development Programs; also of SDP mechanism for linking SDPs and overall macro framework Chapter 3 and

activities with those of the Civil Service Reform Program. ___ Appendix 2.

PER98, Better budget preparation through adherence to a clearly defined Version 2 of Budget Reform Design Manual (BRDM) presents

18,11.34 budget calendar such a calendar and it is currently being tested.

PER98, Better budget coding system New chart of accounts developed in BRDM and is in the It is still in the

18 process of revision. process of revision.

PER98 ¶1.14 Ensure tansparency in budgeting and accounting for extra- Budget policy paper incorporating this principle has been

budgetary finds presented to PMO for approval. Financial regulations requireall aid funds to be reflected in the Consolidated Fund; forChannel 3 funds this is being done ex post.

PER98, Move towards public accounts that include debt, consolidated CSR reform focuses on improving existing system.

¶1.43-1.44 fund, sinking funds, etc. in addition to the general government Broadening coverage of accounts is envisaged as a follow-on

I sector stage.

Ref. Recomnmendation Current Status Comment

PER 1999 [St rategic Expenditure PlanninglExecSum Operationalization of the PlP/MEFF exercise is extremely Against the background of uncertainty exacerbated by the See discussion in¶14 important and should be the top priority for the FYO/0I budget conflict, GoE again failed to operationalise the MEFF/PIP by Chapter 3 and¶98; ¶120 exercises. The Ministry of Economic Development and obtaining the approval of the Cabinet and issuing Indicative Appendix 2.

Cooperation, in conjunction with the Ministry of Finance should Planning Figures in accordance with the financial regulationstake the lead, and intensive coordination with the donors will be and budget calendar that have been developed.indispensable.The next round of the PIP should be started early - with a view to MoF and MEDAC do collaborate but information exchange ismove quickly to a PEP - and involve all the players concerned. slow and ad-hoc.

ExecSum It is now important to move swiftly to a full MTEF/PEP. In order¶16 to operationalize the medium-term plarming of public

expenditure, the government now needs to adopt and adhere tothe proposed fiscal calendar. There also needs to be broadacceptance of the MTEF or PEP as a new way of budgetplanning. MoF and MEDAC need to collaborate systematically

__________ in preparing the MEFF.¶120 In order to operationalize the medium-term planning of public - Financial calendar was not approved by the government

expenditure, the proposed financial calendar needs to be adopted and it is still in a experimental stage.now, with the following corollaries:

* Broad acceptance of the pivotal importance of the MEFF - Advance projection of federal subsidy for planningand its timely adoption (including discussion at cabinet exercise will be attempted by FYOO/0 1. However, itlevel), requires a change in the budgeting process which is

* Systematic collaboration between MoF and MEDAC in beyond the provision of the financial regulations.preparing the MEFF and proposing indicative planningfigures. [inter-ministerial working group]

* Strengthened macroeconomic modeling capacity.* In preparing the MEFF, provide reliable advance

projections of the federal subsidy to regions.* Expansion of the PIP into a full-fledged multi-year PEP

by providing recurrent as well as capital outlays in theN_MEFF.

Ref Recommendation Current Status CommentExecSum When the PIP is extended to the regions, sector planners should At the time of PER 1999, only Oromiya had been assessed for¶16; 1120 be required from the outset to prepare consistent medium-term implementation of a regional PIP. Preparatory studies have

plans for both recurrent and capital expenditure, and regional and now begun in other Regions also.zonal councils should be required to undertake joint reviews ofrecurrent and capital budgets for each sector.

PER 1999 [Civil Service Reform (Expenditure Management and Control)]ExecSum Specific follow-up is required on the implementation of the Under way¶14; financial calendar... to ensure the adoption of the calendar andTi0 discipline in following it through the fiscal year.ExecSum Important that EMC Program accelerates the implementation of Under way¶14; ¶102 the accounting and audit components. In particular the

government needs to operationalize the financial reporting systemon the use of donor funds under the SDPs for education andhealth.

¶89 It could be helpful to organize a briefing for donors on Civil Done in October 1999Service Reform and Expenditure Management and Control inparticular, and to keep the donors informed on a regular basis.

¶92 Financial Legal Framework: priority should be given to issuethe remaining financial directives, in particular those on budget Work to produce the necessary directives is in progress.management including the budget calendar, procedures of budgetcontrol, procedures for submission of supplementaryappropriation, and calendar for supplementary appropriation.

AID AND AID MANAGEMENT

PERs 1997 and 1998PER97 Collaboration between Government and donors to simplify the Significant progress in the context of the SDPs but still a long

UD.X-i2.. multiplicity of donor procedures. way to go.PER97 Urgent need for Ethiopia to receive substantial debt relief from Donors unwilling to move forward on debt relief while the11.9; donors, including the Bank/Fund HIPC Debt Initiative. border conflict remains unresolved.PER98128, 13.2

Ref. Recormnendation Current status CommentPER98, Budget calendar to discipline donors to provide timely No progress, but PER 2000 again reemphasizes the importance¶1.15 information on aid (including in-kind aid) I of this issue. l

PER 1999 Aid ManagementExecSum MEDAC to maintain, with donor assistance, a reliable and MEDAC has again produced consolidated forecasts of aid¶16; comprehensive database of ongoing and expected aid projects and disbursements as part of PIP preparation. Under the DSA110; 1121. programs, which can be clearly mapped onto the SDPs that have project, it is planned to develop a systematic database along the

been agreed as well as onto the PIP and successive annual lines suggested.budgets.

ExecSum In addition the government and donors need to collaborate in The proposed financial calendar is at an experimental stage and A Steering16; ¶ 121 making projections of aid flows available to the regions with external fund available to regions will be transmnitted to the Committee led by

sufficient notice to take them into account for budget preparation regional goverunents as usual, after December, but earlier MEDAC has been(i.e. by end-December if the proposed financial calendar is to be than in the previous years, in order to give sufficient time to the established to workobserved). regions for budget preparation. on this aspect.

¶121 Aid agencies and the government together should ensure that aid, Both the Governments and the donors see problems in thethrough whichever channel of disbursement, is allocated only to present arrangements of dialogue and consultation. Asthe priorities defined in the govemnment's strategic planning indicated in chapter 4, MEDAC has made some progress indocuments (SDPs, etc). improving aid coordination, but many problems persist. The

government is also concerned about the unilateral decision of These issues anddonors, on occasions, to suspend aid. possible suggestions

¶121 The government should continue to encourage aid agencies to The Government is trying its best to convince donors to utilize to address themove towards unearmarked channel 1 support. The government channel 1. So far, IDA is the only donor that has started to use problems are furtherneeds to address aid agencies' genuine concerns about channel 1. ADB is currently finalizing a process to shift to the discussed inaccountability, reporting and dialogue. At the same time, aid channel 1. Several bilateral donors have shown interest in PER 2000 chapter 4.agencies should recognize that earmarking of funds has high providing unearmarked channel 1 funding, but progress incosts in additional administration and delay. working out the modalities has been halted by the border

conflict.


¶118 The procedures for progranmming IDA funds to the SDPs should A technical working group (TWG) which includes members Sector ministries and

be reviewed: from Ministries of Finance, Education, Health and MEDAC, World Bank wiU have

* to ensure that IDA funds are allocated well before the under the Chairmanship of the Prime Minister's Office, has to work together on

commencement of the budget year; been established to identify and follow up on problem areas this.

* to move towards a standard format for project information and to find a feasible solutions.for the government and donors, and In this regard, (TWG) has already, See para. 1.14 of this

* to review the appropriate amount in the Special Account - created a mechanism which will allow regions to know PER.

(the disbursement buffer). well in advance the IDA budget to be allocated for thecoming budget year (i.e. 1993 E.C. budget year)

- Included in its agenda the issue of budget offset systemand will discuss in depth alternate solutions.

Accepted the principle that ongoing projects should beincluded in following budget year.

Exec. Sum The following improvements to the budget offset system could be - Initial projection of aid flows has been made at the Ongoing projects

¶16 adopted: national level, but disaggregation by regions is still not should be included in

* publish planning bodies' projections of aid flows, so that available. the following fiscal

the offset is transparent - MEDAC has initiated a major improvement by offsetting year sub-programs.

less than 100 percent of grants and credits.* adjust subsequent offset to take account of variance See discussion in

between anticipated and actual aid flows chapter 4.

* ceilings for Treasury funds and for aid should be clearlyseparated, and it should be clear that aid unutilized in agiven budget year will normally remain available insubsequent years. _

FEDERAL-REGIONAL FISCAL RELATIONS

PERs 1997 and 1998

PER97 13.20 Financial Regulations should specify borrowing powers of regional Has not been further addressed, beyond existing provisions of See World Bank's

and lower levels of government. Federal and Regional Constitutions. Regionaliation. ~~~~~~~Study.

PER97 ¶3.21 Clarify responsibilities for setting local taxes, and mechanism for Has not been further addressed, beyond existing provisions of See World Bank's

harmonizing taxes between tiers of government. Federal and Regional Constitutions. RegionalizationFederal and ReIional Constitutions. Study.

Ref. Recormmendation Current Status CommentPER98, Further review of inter-govermnental grant regime A revised budget grant formula, taking into account the The revised formula¶9 anomalies in the existing formula as well as accumulated is yet to be analyzed

international experience is reported to have been approved. in the light of thefindings of the WorldBank'sRegionalizationStudy and the budget

_____ ____ ____ ____ ____ ____ ____ ____ ____ __ _ offset system .PER98, Clarify and improve budget offset system MEDAC has effected a major improvement by offsetting less See chapter 4 of this¶9, 11.64 than 100 percent of external aid, 70 percent for loans and 30 PER

percent for grants.Evaluation of ex-post disbursements has also been attemptedon a pilot basis.

PER98, Budget calendar to ensure timely notification of federal transfers. Still an issue; discussed but not resolved in the Budget Reform See PER 1999¶1.36 Design Manual (BRDM). recommendations

under StrategicExpenditureManagement.

ALLOCATION OF EXPENDITURE

PERs 1997 and 1998

PER97, p.ii; Increase share of O&M expenditures Some signs of improvement, but needs analysis at sector level11.7 (increased defense spending masks underlying trends).

PER97, p.iii Budget share of education and health to increase as SDPs are Budget provisions for health and education have beenimplemented. increasing in recent years in absolute terms, but declining as a

proportion of GDP.PER97 Review of implementation paths of SDPs in the light of PIP work includes some analysis of SDP feasibility, but nop.v; 11.23, expenditure implications. formal re-phasing yet.¶1.33;PER98 13.24


PER 1999177 The government needs to make strategic choices about the

sustainability of its expenditure programs [under any scenario] itwill be necessary for the government to balance an ambitiousSDP implementation schedule with non-SDP expenditures.

¶78 Backload the education and health SDPs and extend theimplementation time-frame for the Roads SDP to seven years, tofit the projected fiscal envelope.

REVENUE MOBILZATION

PERs 1997 and 1998

PER98 Strengthen Customs Authority, including implementation of Under way.¶19; 12.51; ASYCUDA. Revenue mobilization¶2.57-64 not__ __ _ __ _ __directly__ __ _ __ _ __ _ _ __ _ __ _reviewed___ _ __ _ __ _ __ _ __ _

- PER98 ¶26; Improve tax administration by addressing judicial aspects etc Under way. not directly reviewed¶2.76-85 PERs.PER97, Increase cost recovery, and private sector role, in social sectors, Under consideration, including close reviews of other¶2.3 1; 12.43 especially at tertiary level countries' experiences.

PER 1999¶61 The govermment needs to strengthen the major domestic tax effort Under way.

and maintain close cooperation with the donor community tosecure an adequate flow of concessional external resources.


FUTURE PERS

(a) PER 1999Exec. Sum * Undertake future PERs much earlier in the fiscal year, in -PER 2000 schedule has been advanced to harmonize with the¶18; ¶123 order to support the planning phase rather than the planning/budgeting cycle of the financial calendar. PER 2001

budgeting phase of the financial calendar. will attempt further improvement.* Important role for PERs in reconciling government and -This has been addressed in chapter (4) on aid management and

donor estimates of aid flows integration of aid flows into the planning and budgetingprocess of this PER.

* Help to extend the sector dialogue associated with the -This is being addressed in this PER.SDPs into a broader dialogue on overall publicexpenditures and enhancing the poverty impact ofgovernment and donor assistance.

* Shift focus of next PER towards effectiveness and -A beginning has been made in this regard under chapter 5 ofefficiency of government spending. this PER.

o ¶4 For the next PER it is envisaged that the govenmment will also Government officials have been more actively involved in theshare in the drafting of background notes for the PER mission. PER process (see chapter 6) although their involvement in the

drafting could be fiurther enhanced.

STATUS OF RECOM:MENDATIONS OF PREVIOUS PERS1

Recommendations

I1. The 1997 PER focused on: (i) the fiscal sustainability of the Government'splanned expenditures under the SDPs for health, education, and roads; (ii) thebudgetary procedures and institutional arrangements for public expendituremanagement; (iii) the role of the state vis-a-vis the private sector in service delivery inagriculture, education, health and transport sectors; and (iv) the fiscal impact of thestate-owned enterprises.

* The PER welcomed the stabilization in recent fiscal trends and the

continued reorientation of public expenditures to the priority socialsectors.

* The impact of the three SIPs on fiscal deficits and the required inter-sectoral expenditure allocation was estimated relatively small andmanageable in FY97/98 and -- under favorable growth conditions --also in FY98/99. However, for FY99/00 and onward, the expenditureimplications of the planned SDPs were expected to becomechallenging for fiscal sustainability. The report explored alternativescenarios to expand the SP implementation paths from 5 years to 7years to account for potential implementation capacity constraints andpossible shortfall in the resource envelope.

* The report suggested measures for strengthening the Government'seffort to improve public expenditure management within amedium-term expenditure framework (MTEF). A three-yearMTEF would become the framework for future budget planning andensure consistency between SIPs and overall macroeconomicframework. In parallel with the MTEF, the Government would needto develop its own capacity and sector institutions to monitor planningand strategic expenditure management.

* With regard to the evolving role of the state, the 1997 PERrecommended to center the public sector focus on primary education,quality enhancement in education, and preventive health care. ThePER also identified areas for broadening cost recovery in agriculture(irrigation), education (tertiary level), and health (user charges). Inaddition, the report recommended that regional governments hand overthe responsibility for delivery of agricultural credit to appropriateinstitutions.

* The PER recommended that the forthcoming Financial Regulationsalso clarify the borrowing powers of regional and lower levels ofgovernment, as well as the responsibilities for setting local taxes, themechanism for harmonizing taxes between tiers of government.

as presented in draft Volume 2 of PER 1999.

9

* The Ethiopian authorities emphasized the need for simplification ofthe multiplicity of donors procedures that are required for releasingthe allocated project funds.

2. The 1998 PER examined -- in addition to the review of fiscal trends -- the leveland sources of financing for public expenditures in Ethiopia, provided a more detailedanalysis of budget management, and updated the fiscal sustainability analysis for keysectors where the Government is implementing SDPs.

* With regard to process issues, the report welcomed the significantachievements made with regard to the closure of public accounts andformulation of a the legal framework for expenditure management andcontrol. The PER concluded that (i) scope exists for improving thesynchronization and coordination of the work on the MTEF/PublicInvestment Program and the various SDPs; (ii) adherence to thebudget calendar and clarifications in the budget coding system wouldenhance the transparency and timeliness of budget preparation; and(iii) a review and clarification of the inter-governmental grant schemeand the budget-offset system would improve Federal-Regional fiscalrelations.

* Second, the report highlighted the immediate necessity of enhancingresource mobilization in the context of tariff liberalization,privatization and decentralization. The report identified a number ofmeasures to help broaden the tax base and enhance collectionefficiency and thus increase revenues, including: (i) speedyimplementation of the computerized customs reporting and recordingsystem (ASYCUDA); (ii) improvement in tax administration andlaunch of judicial reforms to address tax collection and streamline taxappeals; and (iii) introduction of tax payer identification numbers inpreparation for the expansion of the sales tax into a VAT tax.

* The analysis of fiscal sustainability of the public expenditureprograms brought the two sides of the fiscal accounts (the level andstructure of public revenue generation and expenditures) together andassessed the government's medium-term public expenditure programs.The report highlighted the importance of greater burden sharing ofsector expenditures with the private sector, the critical role of tariffreform and export prices for fiscal revenue generation, and theopportunities provided by Ethiopia's participation in the HIPC DebtInitiative.

Status Of Follow-Up

3. The Government recognizes the need for strengthening capacity in budgetmanagement in parallel with broadening the revenue base. In fact, within the contextof the Civil Service Reform (CSR), good progress is under way in a number of areasthat were highlighted in previous PERs.

4. Fiscal reforms aim at broadening the tax base, increasing the revenue-to-GDPratio, improving equity and efficiency and strengthening tax administration. Some ofthe most important measures include:

10

* In FY97/98, a financial services tax was passed by Parliament;several taxes on coffee were unified; the institutional reforms of theFederal Inland Revenue Authority and Customs Office wereinitiated and the ASYCUDA system was introduced at the maincustoms station which is now being made operational. In addition totaxpayer identification numbers being introduced, penalties andinterest charges were authorized as levy on late tax payments; andthe tax fraud unit was expanded.

* In FY98/99, as part of the December 1998 tariff reform, theGovernment identified offsetting sources of domestic revenue tocompensate for revenue losses. The implementation of theagricultural income tax reforms and the expansion of the coverageof agricultural land taxes was partially undertaken; the tax net waswidened to cover unincorporated firms; the new financial servicestax was implemented; and. selected excise taxes and unifying salesand services taxes on most items were reversed. Preparatory workon a value-added tax was also initiated.

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Appendix 2

EXPEND1TURE MANAGEMENT AND CONTROL PROGRAM

INTRODUCTION

1. The Expenditure Management and Control Program (EMCP) is a sub-program ofthe broad Civil Service Reform which originated with the formation of a special taskforce in 1994. Substantive work on EMCP began in 1997. EMCP's objectives are to:

* Develop a comprehensive and complete legal framework for civilservice financial administration.

* Introduce a budgetary system which allows informed and rationalannual and medium-term resource allocation reflecting governmentobjectives/priorities.

* Improve accountability to elected bodies.

* Install proper arrangements for the acquisition, safeguard and controlof cash, financial and physical assets.

* Improve financial information systems.

* Strengthen internal and external audit discipline.

* Develop the accounting and audit profession.

This annex describes the current status of core EMCP activities that are especiallyrelevant to the public expenditure management themes of the PER.2

2. EMCP is being supported with TA from a number of agencies, the mostsubstantial support coming from the DSA (Decentralization Support Activity) whichis funded by USAID and implemented by Harvard Institute for InternationalDevelopment (HIID). Reform working groups have been established in the Ministryof Finance and MEDAC, working alongside technical assistance. Starting from adetailed assessment of the current budget and planning processes, the intention is tointroduce elemhents of reform sequentially, as each is developed, and to accompanychanges to procedures with appropriate training and manuals. The budget reformwork accomplished to date is embodied in a series of design manuals. The first onedescribes processes of capital and recurrent budgeting at Federal and Regional levelsand makes recommendations for improvement. The second budget reform designmanual was first compiled in 1999 with a revised edition (Version 2.1) in January2000. It introduces changes in the structure of the budget in five areas: classification,expenditure codes, revenue codes, financial calendar and budget formats. Version 2.2will be a similar manual but modified for use by Regions and AdministrativeCouncils. Version 3 of the budget reform design manual will deal with organizationand staffing of budget institutions and with the monitoring and review of budgetsduring implementation. Version 4 will deal with aid management, and Version 5 withunit costs, the preparation of work plans and budget implementation and review.

2 For sources and additional material see the list of documents at the end of this Appendix. Also referto PER 1999 (including annexes) for a fuller description of the Civil Service Reform and EMCP.

13

PIP And Medium Term Expenditure Planning

3. The federal PIP is seen as the centerpiece for the eventual development of acomprehensive framework for medium-term expenditure planning. It is planned tomove from the PIP (which only programs capital expenditures) to a PEP (PublicExpenditure Program) which would program both recurrent and capital expenditures,and to extend the activity from federal to regional level. A legal framework has beenestablished: federal financial regulations require the preparation of the PIP andstipulate that the capital budget may only include projects which have beenincorporated in the PIP as approved by Council of Ministers and Parliament. Regionshave adopted similar financial regulations, but none of them have yet embarked onPIP preparation.

4. The procedure for preparation of the federal PIP has two main stages:Preparation of the Macroeconomic and Fiscal Framework (MEFF),involving:

- a forecast of GDP;- a forecast of aggregate national revenues and expenditures;- the allocation of aggregate expenditures between Federal and

Regional governments;- for the Federal Government, the allocation of total expenditures

between capital and recurrent; and- the allocation of total Federal capital expenditures among public

bodies. (The allocations of capital investment targets toindividual public bodies are referred to as Indicative PlanningFigures - IPFs.).

* Preparation of the PIP itself: public bodies are required to programand prioritize their capital expenditure to fit within their allocated IPF.

5. The PIP is supposed to be prepared in the first half of the fiscal year, providingthe basis for preparation of the more detailed annual capital budget in the second halfof the FY (see the later section on the Financial Calendar). At the federal level, thePIP has now been through two complete iterations (for EFY 1991-93, and EFY1992-94), but neither has resulted in a fully operational PIP. The first iteration experienceddelays in developing an agreed MEFF; instead of being prepared in advance of thecapital budget it ended up as a simultaneous exercise. IPFs were never formallyapproved, and preparation of the PIP itself was treated as a dry run, in which publicbodies' submissions were never reconciled with the estimates of resource availability.The PIP itself, prepared in two volumes in both English and Amharic, was neversubmitted for cabinet or parliamentary approval, and did not circulate beyondMEDAC.

14

6. A review of 'lessons learned' was also prepared after the first cycle.3 Alongwith various technical recommendations, the key observation was that the PIPexercise requires high level ownership and support if it is to become an effective partof the financial planning cycle. However, the second cycle - preparation of the EFY1992-94 version - also failed to move beyond being a shadow exercise. Against thebackground of the increased impact of the border conflict on public finances, and aresulting increase in uncertainty, the MEFF once again remained a technical exercisethat was never finalized or taken to the Council of Ministers for approval of the IPFs.As a result, inconsistencies in public spending plans which have been highlighted bythe technical work, have still not been addressed. (Most notably the first PIP exercisehad demonstrated that proposed expenditures on the Road Sector DevelopmentProgram are not consistent with the Government's own forecasts of resourceavailability.)

7. The EMCP's latest review and planning document4 reiterates what is needed tomake the MEFF/PIP an effective exercise:

* There is also need for review of the PIP by the higher levels ofGovernment to be formalized and to ensure that an approved PIPforms the basis of the capital budget. Until public bodies see that thePIP is accorded to a level of importance commensurate with the capitalbudget, they are unlikely to take the exercise seriously (p33).

• There is need to start preparation of the MEFF for EFY 1994-96before the end of EFY 1992 to ensure that it can be approved and theIPFs are issued to Federal public bodies by the end of September 2000(Meskerem 1993) (p3 1). Forecasts as input into the Macroeconomicand Fiscal Framework for 1994-96 will start in May 2000 to enablethe MEFF to be completed and approved in accordance with theFinancial Calendar (p27).

* For the PIP process to really become established, however, it willrequire formal recognition at the senior-most levels of government ofthe importance the PIP as a planning and programming tool forimproving economic and financial management. The MEFF and theinvestment programs prepared by the public bodies in accordance withthe Indicative Planning Figures that are provided to them requirereview and approval by senior policy bodies if federal public bodiesare to take the exercise seriously (p3 3 ).

8. The PIP thus far only covers federal projects. However, calculating the fundsavailable for federal capital expenditure requires projections of federal recurrentspending and of the federal transfer to the Regions. Preparation of PIPs at Regionallevel would require the federal Government to give the Regions forward projectionsof their expenditure ceilings and anticipated Federal subsidy. A review of the scopefor PIP preparation at Regional level has been completed for Oromiya, and similarreviews for a number of other regions are under way.

3 MEDAC: Lessons Learned from Preparation of the 1991-93 Public Investment Program, November1998.4 Civil Service Reform Program: Expenditure Management and Control Component - Performance forFYl991/ 1998/99 and Planned Activities FY1992 (99-2000), Ministry of Finance, September 1999.

15

Financial Calendar

9. The aim of the financial calendar is to link the cycles of expenditure planningand budgeting and to clarify the responsibilities for each stage (see Tables 1 and 2below5). The first half of each FY is for strategic expenditure planning; so that thedetailed budgeting in the second half can reflect strategic expenditure priorities.Better coordination of recurrent and capital budgets will be promoted by theintroduction of a joint budget call and a common deadline for the two budgets. Betterintegration of recurrent and capital budgets will also be facilitated by the approach tocost centers and common budget codes described in the next section.

Table 1: The Financial CalendarCYCLE/PART/STAGE ETHIOPIAN CALENDAR EUROPEAN CALENDAR

PLANNING CYCLE/PART/STAGE

1. Multi-Year planning Hamle 1 - Nehase 15 July 8 - August 21

2. Multi-Year programming Meskerem 14 - Tahisas 29 September 25 - January 8

3. Annual Fiscal Plan Pagume I - Tahisas 29 September 6 - January 8

BUDGETING CYCLEIPART/STAGE

A. Executive Preparation

1. Budget Preparation Meskerem 20 - Megabit 6 October I -March 152. Preparation of the Formula for Regional Subsidy Meskerem 20 - Hidar 5 October I -November 15

3. Notification of the Estimate of Subsidies Tahisas 30 - Tir 7 January 9 - January 16

4. Budget Call Tahisas 30 - Tir 29 January 9 - Febniary 7

5 Budget Request Tir 30 - Megabit 22 February 8 - March 31

6. Preparation of the Recommended Budget Megabit 23 - Genbot 29 April I - June 6

7. Approval of the Recommended Budget Genbot 30 - Sene 13 June 7 - June 20B. Legislative Adoption

8. Approval of the Formula for Regional Subsidy Hidar 6 - Tahisas 5 November 16- December 15

9 Approval of Part 4 of the Recommended Budget Sene 14 - Sene 30 June 21 - July 7

10. Appropriation of the Approved Budget Sene 14 - Sene 30 June 21 - July 7C. Executive Implementation

11. Notification of the Proclaimed Budget Hanle I - Hamle 8 July 8 - July 15

12. Operation of the Proclaimed Budget Hamle I - Nehase 9 July 8 -August 15Hamle 9 - Hamle 30 July 16 - August 613. Implementation of the Proclaimed Budget (next FY) (next FY)

D. Executive Audit/ Monitoring

5 Both drawn from Version 2.2 of the Budget Reform Design Manual.

16

Table 2: The Financial Calendar And Institutional ResponsibilitiesCYCLE/PART/STAGE RESPONSIBLE INSTlTUTIONS

PLANNING CYCLE/PART/STAGE

1. Multi-Year Planning MEDAC

2. Multi-Year Programming MEDAC and public bodies

3. Annual Fiscal Plan MoF

BUDGETING CYCLE/PART/STAGE

A. Executive Preparation

1. Budget Preparation Public bodies

2. Preparation of the formula for Regional Subsidy MEDAC

3. Notification of the Estimate of Subsidy MEDAC

4. Budget Call MoF, MEDAC

5. Budget Request Public Bodies

6. Preparation of the Recommended Budget MoF, MEDAC

7. Approval of the Recommended Budget PMO, Council of Ministers

B. Legislative Adoption

8. Approval of the Formula for the Regional Subsidy Federation Council

9. Approval of Part 4 of the Recommended Budget Parliament

10. Appropriation of the Approved Budget Parliament

C. Executive Implementation

11. Notification of the Proclaimed Budget MoF, MEDAC

12. Operation of the Proclaimed Budget MoF, MEDAC, public bodies

13. Implementation of the Proclaimed Budget Public bodies

D. Executive Audit/Monitoring (done under the Civil Service Reform Audit Project)

10. The planning and programming stages focus on three documents: the MEFFwhich should set overall expenditure targets and provide IPFs for preparation of thefederal budget, the PIP which sets out a three year federal capital expenditure programin detail, and the annual fiscal plan. The fiscal plan should update the first year'sprojections of the MEFF, set definite ceilings for Federal recurrent and capitalexpenditure and also establish the amounts of subsidy to be provided to the regionsand administrative councils.

11. Timeliness of the Fiscal Plan is vital if regions are to base their budgetpreparation on accurate estimates of resources available. The coordination of MEFFand Fiscal Plan is an area of concern: logically both should be prepared by the sameteam; the division of responsibilities between MoF and MEDAC should not be assharp as Table 2 seems to imply.

12. As indicated in the review of the PIP, the government has not yet succeeded inadhering to the discipline of the financial calendar.

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Accounts Project: Cost Centers And Budget Coding

13. The Civil Service Reform strategy of budget reform is to move from anemphasis on control using line item budgets to an emphasis on management usingcost center budgets. Cost centers are defined in terms of responsibilities, and mayexist at different levels of aggregation. Cost center budgeting will require publicbodies to map their budget to organizational sub-units (sub-agencies) and activities(programs, sub-programs, projects). Cost centers should thus allow public bodies toknow the total cost of an activity and make budgeting decisions accordingly.

14. This approach is intended to address several weaknesses of the existing budgetstructure:

* The division between the recurrent and capital budgets will be bridgedby providing total costs for sub-agencies and projects. By usingstandard budget categories and by standardizing the codes for thesecategories in both the recurrent and capital budgets, the two budgetscan be linked.

* Allocation of expenditures to recurrent or capital budgets would berationalized: at present some expenditures are placed in the 'wrong'budget for the type of expenditure, in order to simulate a cost center;under the reformed system this would no longer be necessary.

* Cost center budgeting will also address expenditure composition - thebalance between capital, non-wage recurrent and wage recurrentexpenditures. Cost center budgeting will require that all three types ofexpenditure are budgeted together, even if they are placed in differentbudgets. This will also promote the development and application ofbudget norms that can promote better expenditure composition.

* Mapping the budget to cost centers will also encourage public bodiesto reassess their organization. Alignment of budgets andresponsibilities should promote more decentralized and accountableexpenditure management.

15. The reforms to the budget structure are intended to complement the morestrategic approach to expenditure planning reflected in the PIP/MEFF and theproposed financial calendar. Annual budgets are to be linked to rolling three-yearexpenditure plans, and the reform also aim to improve the links between capital andrecurrent budgets. The current status of the reform is reflected in Version 2.1 of theBudget Reform Design Manual, which incorporates changes based on workshops anddiscussion of the earlier version at both federal and regional levels; it also addressesrevenue, which was not originally included. A detailed revision of the Chart ofAccounts is spelt out. Government has agreed to implement the budget reform at thefederal level for the preparation of the EFY 1993 budget, with pilots in the Ministry ofEducation, the Ministry of Health and the Ethiopian Roads Authority.

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Aid Management

16. Aid management is to be the focus of the fourth version of the Budget ReformDesign Manual. However, activities already under way involve aid managementreform in a number of respects:

* Legislation has set stringent standards for the incorporation of aid inthe budget.

* An interim accounting system for tracking donor funds in channel 1has been introduced.

* The new chart of accounts incorporates improved budget coding tostrengthen the ability to track funds from different donor sources.

* In connection with PIP work, consolidated projections of aiddisbursements are now being prepared, and it is planned to develop acomprehensive database on aid.

Outlook And Constraints

17. Full implementation of the reforms will take many years. Institutionaldevelopment of this type is inherently long-term, and constraints experienced byEMCP have included shortages of manpower (with staff having to divide their timebetween operational duties and developmental work and training), delays in posting ofTA, and the addition of unanticipated tasks (notably the interim reporting system forthe Sector Development Programs). For some elements of EMCP donor support isstill not confirmed. Cascading the reforms from federal to regional level is also atime-consuming process. One practical problem is that translation of materials intothe regional working languages (Amharic, Oromifa and Tigrinya) is essential forinvolvement and training of staff at zonal level and below, but has been found to takea year or more for major documents.

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SELECTED DOCUMENTS

Budget Reform Design Manual, Version 1.0, Budget Processes and Preparation,15 January 1998. FDRE: Public Investment Program FY's 1991-1993, draft, October1998 (2 Volumes).

Assessment if the Applicability of the Federal PIP Format to the Oromia RegionalState, PIP Design Team, MEDAC, August 1998.

Description of the Ethiopian Government Accounting System: Accounting Cycles andProcesses, draft, prepared by the Civil Service Reform Accounts Design Team fromthe Ministry of Finance, 28 September 1998.

MEDAC: Lessons Learned from Preparation of the 1991-93 Public InvestmentProgran, November 1998.

A guideline for the low of Credit and Development Assistance, Accounting,Recording and Report Submission Procedure, MoF, January 1999. [translated fromAmharic by Michael Translation Office].

MEDAC: Briefing Materials: Workshops for Federal Public Bodies on thePreparation of the Public Investment Program, August 1999.

Civil Service Reform Program: Expenditure Management and Control Component -Performance for FY1991/1998/99 and Planned Activities FY1992 (99-2000),Ministry of Finance, September 1999.

Forecast of External Funding for EFY 1993-95, MEDAC, December 23, 1999.

Macroeconomic and Fiscal Framework for 1993-95 (draft for discussion),Development Finance and Budget Department, MEDAC, December 9, 1999 (updatedDecember 29, 1999).

Budget Reform Design Manual, Version 2.1, Chart of Accounts, Budget Preparationand Presentation for the Federal Government, January 24, 2000.

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Appendix 3

MEDIUM TERM EXPENDITURE PLANNING IN SOUTH AFRICA6

Origins

1. The post-apartheid government inherited a set of fragmented, non-transparentbudgeting structures from the previous regime, as well as weak information systems,institutional complexity and low capacity at all sub-national levels. Not surprisingly,budgeting in the period 1994 to 1997 was marred by unrealistic plans, unclearpolitical mandates, conflicting priorities, poor planning and management and anunstable process. There were significant variations between planned and actualspending, considerable inter-governmental tension and delivery disruption.

2. A first, unsuccessful, attempt to establish a medium-term framework involved aseparate spreadsheet model that was operated from the Treasury in isolation from thereal budget process and departments. It was technical, complex and included sectoralanalysis and the identification of cost drivers. Although it was approved by theCabinet, it never gained a real foothold in the process and was ineffective inimproving budgeting decisions.

3. A comprehensive multi-tier medium-term budgeting system was inaugurated inNovember 1997 with the publication of a medium-term budget policy statementwhich set out the policy framework and medium-term fiscal framework for theFebruary budget. In February 1998 the national and provincial budgets for the1998/99 spending year were published with forward spending plans for the two outeryears, 1999/2000 and 2000/200

4. Although the forward plans were, at first, quite crude, the MTEF initiated asystem of rolling three year budgets backed by a single consolidated national andprovincial budget process. This process, part and parcel of the MTEF, provides thebridge between the technical preparation of budgets and the need to reflect nationalpolitical priorities in national and provincial expenditure plans. This process alsoprovides the tools to manage the intergovernmental tensions and trade-offs inherent inany system of fiscal federalism.

How It Works

5. The medium-term expenditure framework is the result of the annual MTEFprocess that starts with the indicative allocations for the upcoming fiscal year, basedon projections of spending in the previous year's MTEF. Expenditure ceilings overthe medium-term are set at appropriate levels within a medium-term framework ofprojected revenue, expenditure and borrowing agreed by the national cabinet. Duringthe drafting process these ceilings change on the basis of negotiations between thecenter and line agencies, new priorities, extra or less money available because ofadjustments to the medium-term framework or functional shifts between spendingagencies. Provincial and national departments assign resources within theirexpenditure ceilings in line with policy priorities and submit a three year forward

6 The assistance of Alta Folscher of Idasa, Cape Town in preparing this appendix is gratefullyacknowledged.

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spending plans to their treasuries. Medium term expenditure committees, one fornational and the other for the provinces, evaluate whether departments' spending plansare economical, efficient, equitable and effective and compile expenditure proposalsfor the national and provincial cabinets respectively, consistent with availableresources.

6. A set of sectoral review teams operates at the heart of the process to identifymain budget trends for a particular sector, identify policy options contributing torising spending pressures and the possibility of expenditure reductions and preparerecommendations for improved expenditure management, possible reallocation andpolicy changes. The MTEF Review Teams bring together national and provincialtreasury and line department officials. The team reports are a key input into thedecision-making process at all levels.

7. The MTEF operates against a backdrop of commitment to transparency andpublic accountability, output-driven program budgeting and political prioritization.

Gains From MTEF

8. The MTEF does not as yet deliver all that it promised. Centralized out-of-cyclebargaining of public sector wages and unfunded policy mandates cause problems;planning, implementation and control capacity, especially at the provincial level, isoften lacking; and weak information on the outputs and outcomes of spending remainsa problem. Frequent media reports of service delivery failures in provinces are stillpresent and parliament and other stakeholders still play a very limited and ineffectiverole in the budget process.

9. However, the following gains can already be attributed to the integration ofmedium-term economic and policy planning processes with budgeting and budgetmanagement through the MTEF.

a Stable environment: The MTEF promotes macro stability andpredictability of funding, policy; and increasingly of delivery.

* Improved political involvement: The MTEF process integratesdecisions across spheres and arms of governments, across sectors,across the government functions of policy making and budgeting andbetween elected office bearers and public officials. It improvedCupertino and consensus within government

* Improved policy and planning environment: The MTEF processpromotes contestability of policy and spending; policy co-ordination;and linking policy, spending and delivery. As departments arerequired to frame their policy proposals within their three-yearallocations, the MTEF introduced resource-based planning andtherefore a better understanding of priorities and costs. The MTEFprovides a context for assessing proposals.

* Greater transparency: The MTEF produces more reliable and moretimely information, more frequently. It provides a forward view ofgovernment's plans and therefore presents an opportunity forparliament and civil society to analyze and discuss the expenditure

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projections and to ensure that alternative views are fully taken intoaccount in framing the subsequent MTEF. The medium-term policystatement, published three months before the national budget,facilitates informed public debate on the forthcoming budget duringthe drafting process.

Critical Success Factors

10. The following factors contributed to these successes:* Political commitment and strong principal agents: The MTEF

was implemented with the backing of the full cabinet. The politicalleadership came from the Minister of Finance, backed by a strongcentral agency, the Department of Finance.

* Simplicity: The MTEF runs on a simple framework of integratedthree year spending plans. Changes are made to annual baselines ona rolling basis. The published MTEF consists of a single page perdepartment added to the existing budget formats detailing spendingover three years per program and per economic classification ofspending. The macro-economic assumptions (GDP and inflation)and fiscal targets (deficit as a percent of budget and GDP, revenueas a percent of GDP and expenditure as a percent of GDP) are alsopublished linked to the framework.

* Comprehensive implementation: The MTEF was not piloted inone or two departments, or in a province, but implementedcomprehensively. This enables the integrated assessment ofspending plans and integrated resource-based policy development.

* Making it matter: The MTEF did not run parallel to an existingbudget process, but was made the only budget process. If spendingagencies wanted to access budget allocations, they had to engagewith the MTEF process and they had to produce three year spendingplans. Secondly, the treasury sticks to the allocations provided forin the MTEF. This forces spending agencies to take their ownMTEF planning seriously. Simply put, if it is not in the MTEF, itwill not happen. Conversely, the national and provincial treasuriesdelivered predictable funding. Putting this simply, if it is in theMTEF, it will happen. Thirdly, the central agencies kept strictexpenditure discipline, forcing spending agencies to make their owntrade-offs. Finally, the robust financial management legislationsupports and depends on the MTEF. Individual accounting officersare to be held accountable for monies allocated to them inaccordance with the MTEF, for example. Similarly other publicsector management systems, such as the human resource system andthe civil service regulations, use the MTEF as a framework forplanning and control.

* Demonstrating quick wins: Apart from the operationalenforcement of MTEF discipline, acceptance of the system wasenhanced by a rapid turnaround in provincial finances. The abilityof the executive to spread the pain of lower than expected economic

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growth in the 1998-2000 period over the medium-term rather thanabsorb it in one year with severe spending disruptions, alsoengendered support for the system.

* Good budget support and new systems: The MTEF wasimplemented in an environment characterized by poor informationand weak capacity at all levels. The central treasury providedbudget support in a focused program on provincial level, buildingcapacity. Simultaneously considerable effort was also expended toestablish new management information systems. As these arecoming on line the effectiveness of the budget system is enhanced.

• A living process: At the time of its implementation the MTEF wasfar from perfect. It operated on poor information; low planning,implementation and control capacity and weak intergovernmentalcoordination of policy planning. The second year saw the additionof sectoral review teams to improve policy coordination, the thirdyear saw the addition of financial management legislation etc. Thetreasury has not hesitated to change the process if required. Futureplans include extensive personnel management reforms in line withthe MTEF, clearer linkages of service delivery information andfinancial data, better investment planning and a more comprehensiveassessment of wider public sector fiscal activities. Mostimportantly, it is to be doubted if these developments would havecome about without the MTEF and accompanying medium-termbudget process demanding them.

11. In conclusion, the South Africa's Medium Term Expenditure Frameworkenables the co-existence of a sound budget framework and medium-termdecentralized planning. It promotes fiscal discipline while balancing priorities andcompetition for funds. It encourages management capacity and forward planningwithin a regulated framework.

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Appendix 4

ETHIOPIA - FooD AND FOODGRAIN PRODUCTION1985-98

Year Food aid Foodgrain production Food aid as proportion('000 metric tons) ('000 metric tons) of production (%)

1985 1,272 4,855 26.21986 926 5,404 17.11987 277 6,684 4.11988 1,096 6,902 15.91989 461 6,676 6.91990 657 6,579 10.01991 925 7,078 12.01992 840 7,055 11.91993 519 7,619 6.81994 980 6,945 14.11995 683 7,492 9.11996 351 10,328 3.21997 387 10,437 3.71998 475 8,100 5.9

Total 9,849 102,154 9.6

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Appendix 5

OuTPUT AND OUTcoME INDICATORS IN EHIoPiA

1. The Ethiopian Welfare Monitoring System (WMS) covers a number ofimportant elements of welfare. The WMS was established in 1996, at the same timeas the Ethiopian Social Rehabilitation and Development Fund (ESRDF). At the heartof the system is the Welfare Monitoring Unit (WMU) in MEDAC, responsible forcoordinating the overall implementation of the program and for preparing reports toinform policy makers on the state of poverty in the country. The other key institutionis the Central Statistical Authority (CSA) which is implementing a prograrn of annualhousehold surveys. The WMU oversees data collection done by the CSA at thehousehold level and also takes up some data analysis and data dissemination.

2. One of the more active elements of the WMS has been the CSA's householdsurvey data collection program. Between 1996-1998, the CSA has conducted onehousehold income and expenditure survey (HICES) for 1995/96 and three annualwelfare monitoring surveys (WMS1, WMS2, WMS3) (a second income andexpenditure survey with a WMS4 is currently under way). The WMSs have covered12,000 to 15,000 households and data can be disaggregated by regions and groups ofzones. 7

3. The first national workshop on welfare monitoring, which was organized by theWMU and CSA in October 29-30, 1999, demonstrated that many of the buildingblocks for the national welfare monitoring system at the household level are now inplace and that the system is capable of producing interesting and useful results.However, the end use of the information gathered remains weak and the system stillfalls short of serving its true purpose as a tool for monitoring the welfare impact ofdifferent public policies and actions and in informing policy decisions.

Trends In Welfare Indicators From The WMSS

4. The three Welfare Monitoring Surveys make it possible to look at trends overtime in some key welfare indicators (literacy, enrollment and drop-out rates;malnutrition, health status, access to health services; access to safe water coverage).The following are the key findings:

* The literacy rate has been improving slowly (to around 70 percent inurban areas and almost 20 percent in rural areas), but female literacyrate stagnated or dropped in both rural and urban areas.

* Primary school enrollment increased substantially, both for boys andgirls, but drop-out rates increased as well in both rural and urbanareas.

* Longer-term malnutrition (stunting) declined, especially in urbanareas, but short-term malnutrition increased.

7 Two research projects carried out by Addis Ababa University collected panel data on smaller samplesof households, and two participatory poverty studies were carried out in 1997 and 1999 with supportfrom the World Bank.

27

* The percentage of people reporting an illness over the last twomonths increased, with rural people more likely than urban peopleto report a health problem.

* Distance to health centers (shorter in urban areas as expected) didnot change much.

* High cost and too great a distance are increasingly cited as reasonsfor not using health services, while poor quality is losing importanceas a reason.

* Childhood immunization coverage (much greater in urban areas) isimproving.

* Use of drinking water from protected sources increased, but thespread of public/private tap water stagnated.

WMS Indicators For Education

5. Literacy Rate (percentage of total population aged 10 years and above)

1996 1997 1998Country 25.8 24.8 26.6Female 16.9 16.5 17.2Male 34.8 33.4 36.4Urban 65.7 70.0 69.0Female 56.7 60.8 59.0Male 77.5 81.0 81.0Rural 18.3 16.2 18.8Female 8.4 7.3 8.8Male 27.9 25.1 28.8

a. Primary gross school enrollment ratio

1996 1997 1998Country 37.4 46.0 52.3Female 29.4 35.1 40.7Male 44.9 56.5Urban 102.1 107.8 109.7Female 107.1 107.3 105.4Male 97.4 108.4 114.6Rural 27.6 37.0 44.3Female 17.5 24.1 31.0Male 37.0 49.4 56.8

b. Primary drop-out rates

1996 1997 1998Country 13.3 19.6 16.2Urban 6.1 6.0 6.2Rural 18.5 26.7 20.3

Reasons cited by drop-outs for withdrawing from school system include:* need to work: 21 percent at country level, 24.7 percent in rural areas and

5.2 percent in urban areas in 1998.* failed in exam: 35.3 percent at country level, 29.1 percent in rural areas,

and 63.4 in urban areas in 1998.

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c. Proximity to school (percentage distribution of household by distance in km. to

the nearest school in 1998)

0-4kms 5-9kms 10-14kms

Country 70.7 _ 22.5 4.0Urban 98.6 0.6 0.0

Rural 65.9 26.1 4.7

WMS Indicators For Health

6. Malnutrition (prevalence of malnutrition among children below 5 years of age)

Type of Country Urban Rural

Malnutrition Sex1996 1997 1998 1996 1997 1998 1996 1997 1998

Weight-for-height Boys 7.8 8.3 10.7 6.4 9.3 9.8 8.0 8.2 10.8

(Wasting) Girls 6.9 6.6 8.4 4.1 7.7 7.2 7.2 6.5 8.6

Both 7.3 7.5 9.6 5.3 8.5 8.5 7.6 7.4 9.7

Height-for-age Boys 67.6 70.5 55.9 61.0 56.8 42.1 68.4 71.8 57.4

(Stunting) Girls 63.8 63.8 53.5 55.5 51.9 38.9 64.8 65.0 55.0

Both 65.7 67.2 54.7 58.4 54.4 40.5 66.6 68.5 40.5

Weight-for-age Boys 47.8 48.2 46.5 35.1 37.5 32.8 49.3 49.2 47.9

(Under Weight) Girls 42.9 45.0 43.2 33.6 35.6 28.7 44.0 45.9 44.7

Both 45.4 46.6 44.9 34.4 36.5 30.7 46.7 47.6 46.3

a. Health status (percentage of population who had health problem during the last

two months)

1996 1997 1998

Country 18.1 21.2 35.1

Urban 14.3 16.6 27.1Rural 18.8 22.0 36.4

b. Access to health services (percentage distribution of households by distance inkilometer to the nearest health service)

1996 1997 19980 - 4 kms.

Country 36.2 37.4 37.5

Urban 95.0 92.3 98.1

Rural 25.7 28.1 27.55-9 kms.

Country 30.3 31.1 29.3

Urban 4.8 6.6 1.65Rural 34.9 35.3 33.9

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c. Reasons for not using the nearest health services (percentage distribution ofhouseholds)

________ ease Too Distant Poor Service u1996 1997 1998 1996 1997 1998 1996 1997 1998

Country 6.8 8.43 14.50 43.70 36.80 39.72 5.40 4.97 3.38Urban 23.70 17.98 21.38 3.60 10.24 5.13 20.10 7.63 7.71Rural 5.20 7.64 13.94 47.50 39.03 42.48 4.0 4.75 3.03

WMS Indicators For Water Supply

7. Source of drinking water (percentage distribution of household by source ofdrinking water)

Country Urban Rural1996 1997 1998 1996 1997 1998 1996 1997 1998

River, lake 42.2 50.2 43.5 18.1 6.8 7.0 53.6 57.5 49.5Protected 5.5 7.1 10.2 6.4 6.2 10.6 5.3 7.2 10.1well/springUnprotected 19.0 19.6 28.2 5.0 5.5 4.1 21.5 22.0 32.2well/springPublic 11.4 12.3 10.8 51.4 58.6 54.1 4.2 4.5 3.6tap/bono l l _

I Own tap 2.2 2.7 2.7 14.3 18.5 18.8 0.1 0.0 0.0Others 13.7 8.1 4.7 4.8 4.3 5.4 15.3 8.7 4.6

Outputs/Outcomes Indicators In Key Sectors

8. A relatively comprehensive system of output and outcome monitoring has beenused in the three sector development programs currently under implementation: thehealth sector and the education sector development programs, which follow oneapproach to impact monitoring, and the roads sector development program, whichfollows a different approach.

Education Sector Key Performance Indicators

9. The Program Action Plan for the Education Sector Development Program(ESDP) includes a set of indicators that aim to capture both financial inputs andoutputs/outcomes (access, quality and equity) of the education system in Ethiopia.The indicators have performance targets for the year 2001/02 (the first year ofimplementation being 1996/97). There were no annual targets set but they aregradually being developed. The regions also have similar indicators included in theRegional Sector Programs and have 5 year targets for each.

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Education Sector - Key Performance Indicators1 2 3 4 5 6 7 8 9 10 11

Proposed In 95/96 % 96/97 % 97/98 % 98/99 % 99/00 00/01 01/02 % VerificatioSource

Budget and Expenditure1 Education share oftotalbudget PAP 15.1/13.7 14.6 14.1 15.3 19 RFB/MoF2 Primary education share of total education budget PAP 63.2/46.7 53.7 65 RFB/MoFA Public expenditure on pilmary % GDP Center 5 YP 4.6B Introduce tertiary cost sharing Center 5 YP

Access3 Total number of prinmary schools PAP/EMIS 9670 10394 10752 11051 12595 EMIS/REB4 Total primary (grade 1-8) enrohnents PAP/ EMIS/ C5YP 3787919 4468294 5090670 5702233 7000000 EMIS/REBC GERPrimaryl-8 EMIS/C5YP 30.1 34.7 41.8 45.8 50 EMISD New schools owned by non GoE Center 5 YP 5E Ratio of female teachers Center 5 YP 25 35

Quality5 Share of lower primary (1-4) teachers qualified PAP/ EMIS 85 91.3 95 EMIS/ REB6 Total number of upper primary (5-8) teachers PAP/ EMITS 27381 NYA 36777 EMIS/ REB7 Number qualified upper primary teachers PAP 5729 20000 EMS/REB8 Totalnumberofsecondaryteachers PAP/EENMS 12143 12329 13078 17463 EMS/REB9 Number of qualified secondary teachers PAP/ EMIS 4910 5054 10760 EMIS/REB10 Number core primary textbooks in schools PAP NYA 51000 EMIS/REB11 Grade 8 exam pass rate PAP 61.7 80 NOE12 Grade 4 sample assessment of learning achievement PAP NOEF Student textbook ratio - primary EMICS C5YP 5:1 NYA 1:1 EMISG Average PTR Center 5 YP 50:1

Efficiency13 Primary school student: section ratio PAP/ EMIS 53 60 63 50 EMIS/REB14 Secondary school student: section ratio PAP/ EM[S 63 68 71 50 EMIS/REB15 Grade I dropout PAP/ EMITS 28.5 28.8 27 14.2 EMIS/REB16 Total prinary school dropout PAP/ EMIS 8.5 12 4.2 EMIS/REB17 Averagegrade4-8repetitionrate PAP 12.8 12.1 6.4 EMIS/REB18 Average grade 4 - 8 repetition rate for girls PAP 16.2 8.1 EMIS/REB19 Coefficient of primary school efficiency PAP/ C5YP/ EfMS 49.6/60 45.5 39.8 80 EMJS/REB

Equity20 Gross primary enrolment rate in the two most under PAP/ C5YP/ EMIS 7.6/16.2 7.8 25 EMIS/REB

served areas21 Share of girls in Iry school enrolment (Grades 1 -8) PAP/ C5YP/ EMIS 38 36.7 37.8 45 EMIS/REB

10. The broad trends of the sector performance indicators suggest:

* Enrolment is increasing, but the share of girls' enrolment has remainedunchanged; therefore the gender gap is not decreasing.

* Total primary school drop-out is increasing.* Average Grade 4 repetition rate has not changed.

* Coefficient of primary school efficiency is falling.* Gross primary enrolment in the two most underserved areas is static.

11. Data for other crucial indicators, such as the number of core primary textbooksin schools, the ratio of female teachers and Grade 8 exam pass rates (for boys andgirls) are not generally available for all the regions.

12. The 1999 JRM Report indicates that in the last two years, while the overallactual education expenditure per capita has remained relatively stable (around 22Birr) the actual recurrent expenditure per child has declined nationally from 181 Birrper child to 173 Birr per child (the trend is by and large mirrored across the Regions).The decline in recurrent spending is even more marked when the five year period(1995 - 99) is considered: In 1995, the spending was 244 Birr per child, while by1999, it declined to 173 Birr per child (nominal figures).8 A parallel trend of lowcapital budget utilization appears to have taken place (but assessments by the JRMand the MoF differ on this matter): in 1997/98 the utilization rate was 56.5 percent forall regions, varying from 96 percent in Dire Dawa to 19 percent in Gambella; in1998/99, the overall utilization seems to have declined to 49.2 percent (95 percent inHarar to 4 percent in Tigray).

13. A tentative conclusion concerning the link between expenditure and results inthe education sector can be suggested. The reduction in the overall recurrentexpenditure per child certainly had an impact on non-wage resources available forschool materials, maintenance and other operating costs, and the decline in non-wagespending may be linked to the negative trends in a number of indicators. Forexample, the studies above indicate that school materials have an impact both on theretention of girls (and by extension of all students) and on the success rates inexaminations, that is the overall 'quality of learning'. If there are fewer schoolmaterials available, then one would expect a decrease in quality of education, and thisappears to be the case. Similarly, output indicators show an increasing trend inoverall enrolment but with increased class sizes, increased numbers of pupils perteacher and greater repetition and drop out rates.

14. In looking at the detailed regional and federal plans, and the last JRM report, thefollowing five ESDP indicators could be used in any reformed budget and expendituremonitoring system:9

* Gross enrolment rate and gross girls enrolment rate;* Primary school drop out rate and primary school girls drop out rate;* Repetition rate and girls repetition rate;

8 ESDP/JRM 1999, Draft Report, Annex 5 Tables 5 & 69 These indicators should be taken as proposals. They need to be discussed and agreed by the Sector,an opportunity for this would be the Annual Review Meeting.

32

* Ratio of female teachers; and

* Grade 8 exam pass rate (boys/girls).

15. One difficulty is that the general trend of the output/outcome indicators onlybecomes clear over time and there may be years in which there are anomalies due tosudden 'shocks'. Due caution is therefore warranted and knee jerk reactions toresource allocation have to be avoided. The use of indicators should not lead tochange in allocations within/between sectors on an annual basis. Indeed the trends inindicators over time are likely to be more important than their absolute value at anygiven time.

Health Sector - Key Performance Indicators

16. The Health Sector Development Program (HSDP) uses exactly the samegovernance modalities as the ESDP - with a JRM, an ARM and a common CentralJoint Steering Committee - but uses considerably more performance indicators thanthe ESDP. However, the last Joint Review Mission was unable to obtain reliablefigures for many of these performance indicators.

17. Selection of national level indicators and the collection of data to show progresshas not yet taken place as systematically for the health sector as for the educationsector. The second Health Sector Joint Review Mission noted that this needs to bedone and should be a focus of the next review. The present situation - more thanfifty indicators for only a few of which data are available - does not allow for goodmonitoring of results.

18. While it is very difficult to make any conclusive statement because, as noted,data are patchy, the following broad trends can be indicated:

* TB and leprosy appear to be increasing;* Reproductive Health services do not show significant improvement;* Immunization: rising trend but fall in 1997 and 1998 due to decline in

donor funding;* Infrastructure: some expansion and increase in coverage; and

* Capacity: trained staff is insufficient and female representation is low.This information is reasonably consistent with the reported results from the annualWelfare Monitoring Survey (trends over 1996/98, see above).

19. In general, the resources going to the health sector have been considerably lessthan planned in the HSDP with under-spending on service delivery and quality care.The average planned budget per person per year in the HSDP was 17.8 Birr, whileactual spending for 1988/89 was 12.3 Birr. The budgeted spending for 1999/00 is12.9 Birr. Further research is needed to assess whether there is, in fact, a link betweenthe decline in spending per person and the increase in reported illness.

20. On the basis of federal and regional HSDP plans, data available in the annualpublication "Health and Health Related Indicators" and the report of the last JRM forthe health sector, the following five indicators could be appropriately used in areformed budgeting and expenditure monitoring system:

33

• Percentage of children receiving DTP3 immunization;* Number of new outpatients;* Percentage of women attending pre-natal services;

* Percentage of 20 key drugs in stock; and

* Percentage of population living within 10 km of a health institution.

Roads Sector - Key Indicators

21. The Roads Sector Development Program (RSDP) is by far the largest of thethree sector programs. In structure it is very different from the other two SDPs as itmainly consists of the financing of large road works and imposes relatively smallerdemands by way of recurrent budget requirements.10 Fifteen national indicators havebeen identified in the context of the RSDP. Based on the necessary baseline data forthese indicators collected for 1996/97, the overall progress in the roads sector is beingmonitored on an annual basis.

Roads Sector - Baseline Indicators (Year 1996/97)Road indicator Value/indexRoad density per 1000 km2 Kms- Total 22.8- Trunk roads 7.5- Major link roads 6.9- Regional Roads 8.4Road density per 1000 people 0.45

Kilometers traveled by vehicle type 3,737,638- Car 861,689- Bus 751,487- Truck 1,579,440- Truck trail 545,022

Road condition and roughness Condition Roughness(% of sample) (IRI)a. Paved roads 7.7- Good 22- Fair 23- Poor 55b. Gravel roads 14.8- Good 20- Fair 30- Poor 50

Vehicle operating cost per vehicle type (index)100

Freight and passenger tariffs (index)- Trunk road 100- Regional road 100

Kilometers ofroad 24,961- Federal highways 15,769- Regional roads 9,192

e A Road Fund has been established to cover the bulk of road maintenance expenditure.

34

22. The monitoring exercise that took place in April-July 1999 found thefollowing: 11

* A slight deterioration of the condition of the road network in Ethiopia;* A minor increase in the road density; anda A marked increase in vehicle kilometers traveled.

Based on these findings, it was recommended that maintenance standards beimproved to prevent further increase in vehicle operating costs due to a deterioratingroad network.

23. From the fifteen indicators identified in the RSDP, and on the basis of the1998/99 review, the following five indicators could be used in a reformed budgetingand expenditure monitoring system, though this is an area to be further explored:

* Road density by type of road, which gives indication of spatialaccessibility,

* Vehicle kilometers traveled, which links with the expansion of theeconomy

* Roughness and road condition (IRI), which measures quality of roads,

* Vehicle operating cost (VOC), and* Freight and passenger tariffs, which link operating cost with freight

rates.

Agriculture And Food Security Program Indicators

24. The government increasingly sees its role in the agricultural sector as that of afacilitator for private sector activities; emphasis has shifted from state-ownedproduction to activities supporting peasant farmers - extension services, seeds andfertilizer. Correspondingly, the share of the agriculture sector in total public spendinghas declined from an average of roughly 16 percent in the 1980s to 6-7 percent today.

25. Some output indicators are monitored in the context of agricultural projects.Indicators such as: (i) production and yields (kg/ha) in crop and livestock; (ii) numberof small farmer using new technology; and (iii) accelerated transfer of newtechnologies to extension services appear to be suitable for result-oriented monitoring.To give an immediate perception, recent developments in agriculture with respect tothe application of new technologies are shown in the Table below.

Use Of Improved Crop Technologies (% Of Total Area In Cultivation)1995/96 1996/97 1997/98

Improved seeds applied 0.71 1.87 1.98Pesticide applied 9.45 7.07 9.23Fertilizer applied 32.69 32.23 34.47Irrigated 0.97 0.77 0.84

Source: Statistical Abstract 1998, Central Statistical Authority, Febrnary 1999.

'" Ethiopian Road Sector Policy support, Updating the road Sector Development Program MonitoringIndicators, Monitoring Report of the First Year (1998/99); final Report, EuropeanCommission/Ethiopian Road Authority, Teferra Mengesha, November 1999.

35

26. At present, there is no ongoing SDP for the agriculture sector, but a NationalFood Security Strategy was developed and presented to the donor community in 1996.Following up on this, a Food Security Program (FSP) was prepared in 1998, whichincluded some outcome/impact indicators and output indicators as shown below.Given the comprehensive nature of food security, several monitoring indicators arewide in scope (health and nutrition indicators, for example).

Food Security Program - Outcome/Impact Indicators

Indicator Sources

Agriculture Annual surveysFarmers use of key inputs Farn surveysYields of staple food crops Field visitsTotal production of staple food cropsFarmers using modem technologiesUse of drought resistant crops

Natural Resource Management Annual surveysSoils degradation arrested Field visitsCoverage of forest and vegetation areaDepth of soil deposited in terraced landTrees planted on trench and gullies will survive

Market Development Annual surveysAverage time to get produce to market Market surveysPost-harvest losses Field visitsFarmers exposed to monthly market information

Health And Nutrition Annual surveysAccess to clean potable water Household surveysFrequency of health clinic visits Field visitsHouseholds using dietary guidelines

Off-Farm Income In Project Areas Annual surveysIncome from non-farm activities Household surveysCredit allocated to households (Birr) Field visitsWomen start businessAvailability and access to credit facilitiesOff-farm income diversification activities

Program Management M&E reportsPMU established and operationalM&E unit operational

36

Food Security Program - Output IndicatorsIndicator Sources

Farm households reached with TA, and extension package Crop Assessment reportsin different sub-sectors Bureau of Agriculture and

Natural Resources reports

Number of farms with improved access to roads Bureau of Agriculture andNatural Resources reports

Monthly dissemination of information on market prices and M&E reportsquantities

Coverage of safe drinking water Bureau of Water Resource,Mining and Energy Reports

Average distance to nearest clinic Bureau of Health Reports

Febrile illness

Mothers trained in improved dietary procedures M&E reportsHousehold surveys

Small loans extenuated to farn and non-farm households Bureau of Trade, IndustryHousehold reached with targeted training programs and Transport reportsIndividuals attended literacy training M&E reports

Water Sector

27. In the water sector, the absence of a sector development program has been amajor impediment for the design, implementation, and sustainable operation ofprograms. There have been sporadic initiatives to address the different subcomponents of the water sector. However, a water resources management policy wasdeveloped and endorsed by the Government in August 1999. Preparation is underwayin the Ministry of Water Resources to develop the Water Sector DevelopmentProgram. Output and outcome indicators are expected to be set as part of the SDPdesign.

28. The following were used as output indicators in the ongoing water supplydevelopment and rehabilitation projects:

* Improved service coverage;* Water quality and Service quality; and* Efficiency of operation and financial ratios.

29. Other related socio-economic indicators could also be considered as outcomesof water supply and sanitation interventions:

* Infant mortality rate from water borne diseases;* Under- 5 mortality rate from water borne diseases;* Time spent collecting water, and* Water bill as a percentage of household income.

37

Appendix 6

Appendix Table 1: Ethiopia - Fiscal Trends, 1986/87-1999/00million birr

Average

1986/87- 1991/92- 1995/96- 1998/99.

1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00 1999/00Actual Actual Pre. Act Pre. AcL Actual Pre. Act Pre. AcL Budget Pre. Act Budget MoF Proj. PER Proj.

GDP (cuffent prices) 15,790.4 27,419.3 41,479.2 52,394.1 37,937.6 41,465.1 45,034.9 49,238.9 49,238.9 55,549.2 55,549.2 55,549.2Total revenue and grants 3,782.8 4,650.1 9,043.5 10,770.2 8,062.9 9,381.4 9,686.2 12,050.3 10,563.3 12,073.6 10,993.8 10,977.0

Ttal revenue 3,228.2 3,868.1 7,752.1 9,772.4 6,966.1 7,877.4 8,412.9 10,294.4 9,413.8 10,430.4 10,148.2 10,131.0Tax revenue 2,198.6 2,691.7 5,116.6 6,143.9 4,723.1 5,358.2 5,268.6 8,154.7 5,560.7 6,839.8 6,342.7 6,727.0Non-taxrevenue 1,029.5 1,176.5 2,635.5 3,628.6 2,243.0 2,519.2 3,144.3 4,305.3 3,853.1 3,590.6 3,805.5 3,404.0

Extmal grants 554.7 782.0 1,291.4 997.8 1,096.8 1,504.0 1,273.3 1,755.9 1,149.5 1,643.2 845.6 846.0Total expend (including net lending) 4,935.6 6,223.0 10,512.7 13,607.1 10,193.3 10,016.8 11,328.0 13,676.2 12,993.7 15,347.7 14,209.1 14,220.5Of which:

Recurrent expenditure 3,459.8 4,076.0 6,126.6 9,632.2 5,581.6 5,717.0 7,081.3 7,497.3 8,686.4 10,789.2 10,566.6 10,578.0o/w Defense 1,518.4 708.6 1,265.3 3,950.5 771.6 834.8 2,189.5 1,783.1 3,405.7 2,500.0 4,232.9 4,495.2

Capital expenditure 1,475.8 2,147.0 4,003.0 3,974.9 3,562.5 4,299.8 4,146.7 6,178.9 4,307.3 4,558.5 3,642.5 3,642.5Ne lending 0.0 0.0 383.1 0.0 1,049.2 0.0 100.0 0.0 0.0 0.0 0.0 0.0

. Fiscal deficit (cash basis)

Before grants -1,707.4 -2,354.9 -2,760.6 -3,834.7 -3,227.2 -2,139.4 -2,915.1 -3,381.8 -3,579.9 *4,917.3 -4,060.9 -4,089.5ARer grants -1,152.8 -1,572.9 -1,469.2 -2,837.0 -2,130.4 -635.4 -1,641.8 -1,625.9 -2,430.4 -3,274.1 -3,215.3 -3,243.5Financing 1,152.7 1,572.7 1,469.1 2,837.0 2,130.4 635.1 1,641.8 1,626.0 2,430.4 3,274.1 3,215.3 3,243.5Extrnal net 462.6 933.6 981.4 1,137.5 1,436.0 727.9 780.2 1,849.2 1,348.5 1,543.7 1,259.8 926.5

Gross bomowing 560.2 1,037.2 1,275.5 1,735.9 1,692.8 1,012.0 1,121.6 2,280.1 1,782.9 2,135.1 1,884.0 1,688.8Capital budget 560.4 578.8 881.7 1,389.8 726.8 881.1 1,037.2 1,871.3 1,413.2 1,617.5 1,366.4 1,366.4CPF generations/loans 0.0 458.4 393.8 346.1 966.0 130.9 84.4 408.8 369.7 517.6 517.6 322.4

Amstizationpaid 97.7 103.6 294.1 598.4 256.8 284.1 341.4 430.9 434.4 591.4 624.2 762.3Domestic 668.0 936.1 93.2 1,707.4 108.4 -420.8 592.0 -223.2 1,097.7 -17.1 1,955.5 2,317.0

Barkingsysemn 651.0 870.5 -120.9 1,392.7 -113.6 -824.0 575.0 -181.0 468.3 -178.6 2,317.0Non-bank sources 17.0 65.7 214.1 314.7 222.0 403.2 17.0 -42.2 629.4 -8.5 0.0

Other and residual 22.2 -297.1 394.5 -7.9 586.0 328.0 269.6 0.0 -15.8 1,917.5 0.0 0.0Memo items:

Capital Expire by sources of Financing 1,475.8 2,146.9 4,003.0 3,974.9 3,562.6 4,299.9 4,146.6 6,178.9 4,307.3 4,558.5 3,642.5 3,642.5Domestictaury 743.6 1,389.0 2,858.7 2,088.3 2,693.0 3,268.8 2,614.4 3,245.6 2,363.1 2,015.7 1,813.4 1,813.4External assistance 172.0 179.0 262.6 496.9 142.8 150.0 495.0 1,062.0 531.0 925.3 462.7 462.7External loan 560.2 578.8 881.7 1,389.8 726.8 881.1 1,037.2 1,871.3 1,413.2 1,617.5 1,366.4 1,366.4

Reservesinmonthsofimports N/A 5.3 7.1 3.6 10.3 6.7 4.3 3.9 3.9 3.2 3.2 3.2

Source: Ministry of Finance, World Bank Database, Projection for 1999/00 by the PER Mission (February 2000), MEDAC and National Bank of Ethiopia.Note: 1999/00 PER projection figures are usedto calculate the average for years of 1998/99-

Projections for 1999/00 are as of end of January, 2000.

Appendix Table 2 Ethiopia - Fiscal Trends, 1986/87-1999/00as a percentage of GDP

Average

1986/87- 1991/92- 1995/96- 1998/99-

1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00 1999/00

Actual Actual Pre. Act. Pre. Ac¢ Actual Pre. Act. Pre. Act Budget Pre. Act Budget MoF Proj. PER Proj.

Totalrevenueandgrants 24.6 16.5 21.8 20.6 21.3 22.6 21.5 24.5 21.5 21.7 19.8 19.8

Total revenue 21.0 13.7 18.7 18.7 18.4 19.0 18.7 20.9 19.1 18.8 18.3 18.2

Tax revenue 14.3 9.6 12.4 11.7 12.4 12.9 11.7 16.6 11.3 12.3 11.4 12.1

Non-taxrevenue 6.8 4.1 6.3 7.0 5.9 6.1 7.0 8.7 7.8 6.5 6.9 6.1

External grants 3.6 2.8 3.1 1.9 2.9 3.6 2.8 3.6 2.3 3.0 1.5 1.5

Total expend. (including net lending) 31.7 22.4 25.4 26.0 26.9 24.2 25.2 27.8 26.4 27.6 25.6 25.6

Of which:

Recurrentexpenditure 22.1 14.9 14.7 18.3 14.7 13.8 15.7 15.2 17.6 19.4 19.0 19.0

o/w Defense 9.6 2.7 3.0 7.5 2.0 2.0 4.9 3.6 6.9 4.5 7.6 8.1

Capital expenditure 9.6 7.5 9.7 7.7 9.4 10.4 9.2 12.5 8.7 8.2 6.6 6.6

Net lending 0.0 0.0 1.0 0.0 2.8 0.0 0.2 0.0 0.0 0.0 0.0 0.0

Fiscal deficit (cash basis)

1 Including grants -7.1 -5.9 -3.6 -5.4 -5.6 -1.5 -3.6 -3.3 4.9 -5.9 -5.8 -5.8C>

Excluding grants -10.7 -8.7 -6.7 -7.3 -8.5 -5.2 -6.5 -6.9 -7.3 -8.9 -7.3 -7.4

Financing 7.1 5.9 3.6 5.4 5.6 1.5 3.6 3.3 4.9 5.9 5.8 5.8

External (net) 3.0 3.2 2.4 2.2 3.8 1.8 1.7 3.8 2.7 2.8 2.3 1.7

Domestic 4.0 3.7 0.2 3.2 0.3 -1.0 1.3 -0.5 2.2 -0.3 3.5 4.2

Banking system 3.8 3.5 -0.3 2.6 -0.3 -2.0 1.3 -0.4 1.0 -0.3 4.2

Otherandresidual 0.1 -1.0 1.0 0.0 1.5 0.8 0.6 0.0 0.0 3.5 0.0

Memo items:

Capital expend. by sources offinancing 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Domestic treasury 50.5 60.8 71.6 52.3 75.6 76.0 63.0 52.5 54.9 44.2 49.8 49.8

External assistance 11.6 10.0 6.5 12.5 4.0 3.5 11.9 17.2 12.3 20.3 12.7 12.7

External loan 37.9 29.2 22.0 35.2 20.4 20.5 25.0 30.3 32.8 35.5 37.5 37.5

Domesticborrowing/fiscaldeficit -53.1 -61.6 8.4 -58.3 -5.1 66.2 -36.1 13.7 -45.2 5.7 -60.8 -71.4

(including grants)

Reserves in monts of imports N/A 5.3 7.1 3.6 10.3 6.7 4.3 3.9 3.9 3.2 3.2 3.2

Source: Ministry of Finance, World Bank Database, Projection for 1999/00 by the PER Mission (February 2000), MEDAC and National Bank of

Ethiopia.

Note: 1999/00 PER projection figures are used to calculate the average for years of 1998/99-1999/00.


Appendix Table 3: Functional Classification Of General Government Expenditures(recurrent and capital), 1986/87-1999/00 1/

Average

1986/87- 1991/92- 1995/96- 1998/99-

1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00 1999/00Actual Actual Pre. Act. Pre. Act. Actual Pre. Act. Pre. Act. Budget Pre. Act Budget MoF Proj. PER Proj.

million birrGeneral administration 1,875 1,328 2,377 5,382.3 1,949 1,860 3,324 3,211 4,777 4,077 5,726 5,988

o/wDefense 1,518 709 1,265 3,950.5 772 835 2,190 1,783 3,406 2,500 4,233 4,495Economnic infrastructure 277 647 1,266 1,495.3 1,059 1,318 1,423 2,439 1,603 1,940 1,378 1,388

o/wRoadconstruction2/ 135 448 713 1,187.7 832 130 1,177 1,951 1,350 1,473 1,015 1,025Economicservices&dev. 1,206 1,434 2,189 1,991.8 2,180 2,453 1,935 2,229 2,084 2,091 1,909 1,899

o/wagricult. &nat. res. 605 844 1,254 1,503.0 1,159 1,293 1,311 1,883 1,540 1,685 1,465 1,466Social services & dcv. 783 1,442 2,448 2,880.7 2,134 2,361 2,849 3,890 2,930 3,015 2,832 2,832

o/w Education 467 851 1,476 1,748.8 1,383 1,459 1,586 2,099 1,719 1,937 1,778 1,778Health 161 313 605 736.1 482 598 736 1,127 737 831 735 736

Others 795 1,372 1,849 1,857.3 1,823 2,025 1,698 1,908 1,600 4,226 2,365 2,114o/winterest&charges 238 658 892 1,062.2 923 919 836 1,002 957 1,418 1,418 1,167

external assistance 300 202 186 287.5 142 257 160 0 200 750 375 375

Totalexpenditure 4,936 6,223 10,130 13,607.3 9,144 10,017 11,228 13,676 12,994 15,348 14,209 14,221

as a percentage oftotal expenditureGeneral administration 37.8 22.0 23.2 39.4 21.3 18.6 29.6 23.5 36.8 26.6 40.3 42.1

o/w Defense 30.5 12.3 12.1 28.9 8.4 8.3 19.5 13.0 26.2 16.3 29.8 31.6Economic infrastructure 5.6 9.6 12.5 11.0 11.6 13.2 12.7 17.8 12.3 12.6 9.7 9.8

o/w Road construction 2.8 6.4 7.0 8.8 9.1 1.3 10.5 14.3 10.4 9.6 7.1 7.2Economic services 24.4 23.0 21.9 14.7 23.8 24.5 17.2 16.3 16.0 13.6 13.4 13.4

o/wagricult.&natres. 12.3 13.5 12.4 11.1 12.7 12.9 11.7 13.8 11.9 11.0 10.3 10.3Social services 16.0 22.8 24.1 21.2 23.3 23.6 25.4 28.4 22.5 19.6 19.9 19.9

o/w Education 9.5 13.6 14.6 12.9 15.1 14.6 14.1 15.3 13.2 12.6 12.5 12.5Health 3.3 5.0 5.9 5.4 5.3 6.0 6.6 8.2 5.7 5.4 5.2 5.2

Others 16.1 22.6 18.4 13.6 19.9 20.2 15.1 13.9 12.3 27.5 16.6 14.9o/w interest&charges 4.9 10.2 8.9 7.8 10.1 9.2 7.4 7.3 7.4 9.2 10.0 8.2

external assistance 6.0 3.9 1.8 2.1 1.5 2.6 1.4 0.0 1.5 4.9 2.6 2.6

Total expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Ministry of Finance, World Bank Database and Projection for 1999/00 by the PER Mission (February 2000).

1/ General Government is Central + Regional Governments.

2/ Road construction under recurrent expenditure includes urban development from 1994/95 onwards.



Appendix Table 4: Functional Classification Of General Government Recurrent Expenditures, 1986/87-1999/00Average

1986/87- 1991/92- 1995/96- 1998/99-

1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00 1999/00

Actual Actual Pre.Act. Pre.Act. Actual Pre. Act. Pre. Act. Budget Pre. AcL Budget MoF Proj. PER Proj.

million birr

General admnistration 1,875 1,328 2,377 5,382 1,949 1,860 3,324 3,211 4,777 4,077 5,726 5,988o/w Defense 1,518 709 1,265 3,950 772 835 2,190 1,783 3,406 2,500 4,233 4,495

Economic ifirastructure 61 120 150 157 166 180 104 167 146 172 168 168o/wRoadcomstxuction I/ 46 84 139 80 155 170 91 S8 76 86 84 84

Econonmic services 143 278 496 649 454 481 554 676 632 679 665 665o/wAgricult &nat.res. 111 224 420 541 379 408 473 571 530 551 551 552

Social services 621 1,073 1,539 1,897 1,422 1,488 1,708 1,933 1,897 1,926 1,896 1,896o/wEducation 423 675 1,027 1,287 941 1,026 1,115 1,331 1,240 1,390 1,333 1,333

Health 123 233 351 444 328 332 394 479 456 407 433 433Others 760 1,278 1,563 1,548 1,591 1,707 1,392 1,511 1,235 3,937 2,113 1,862

o/w interest & charges 238 658 892 1,062 923 919 836 1,002 957 1,418 1,418 1,167external assistance 300 202 186 288 142 257 160 0 200 750 375 375

Total current expenditure 3,460 4,076 6,127 9,632 5,582 5,717 7,081 7,497 8,686 10,789 10,567 10,578t'.) as a percentage of recurent expenditure

General administration 54.0 32.8 38.1 55.8 34.9 32.5 46.9 42.8 55.0 37.8 54.2 56.6o/w Defense 43.5 18.0 19.8 40.9 13.8 14.6 30.9 23.8 39.2 23.2 40.1 42.5

Economic infrastructure 1.8 2.9 2.5 1.6 3.0 3.2 1.5 2.2 1.7 1.6 1.6 1.6o/w Road construction 1.4 2.0 2.3 0.8 2.8 3.0 1.3 1.2 0.9 0.8 0.8 0.8

Econormic services 4.1 6.7 8.1 6.8 8.1 8.4 7.8 9.0 7.3 6.3 6.3 6.3o/wAgricult.&nat.res. 3.2 5.3 6.9 5.7 6.8 7.1 6.7 7.6 6.1 5.1 5.2 5.2

Social services 18.2 26.1 25.2 19.9 25.5 26.0 24.1 25.8 21.8 17.8 17.9 17.9o/w Education 12.3 16.5 16.8 13.4 16.9 17.9 15.7 17.8 14.3 12.9 12.6 12.6

Health 3.6 5.6 5.7 4.7 5.9 5.8 5.6 6.4 5.2 3.8 4.1 4.1Others 21.9 31.5 26.0 15.9 28.5 29.9 19.7 20.1 14.2 36.5 20.0 17.6

o/winterest&charges 6.9 15.7 14.8 11.0 16.5 16.1 11.8 13.4 11.0 13.1 13.4 11.0external assistance 8.6 5.4 3.1 2.9 2.5 4.5 2.3 0.0 2.3 7.0 3.5 3.5

Total current expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Ministry of Finance, World Bank Database and Projection for 1999/00 by the PER Mission (Febniary 2000).



Projections for 1999/00 are as ofend ofJanuary, 2000.

Appendix Table 5: Functional Classification Of General Government Capital Expenditures, 1986187-1999/00Average

1986/87- 1991/92- 1995/96- 1998/99-

1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00 1999/00

Actual Actual Pre.Act. Pre.Act Actual Pre. Act. Pre. Act Budget Pre. Act Budget MoF Proj. PER Proj.

million birr

Econornic ifiastructure 216 528 1,116 1,339 893 1,138 1,318 2,272 1,457 1,768 1,210 1,220

o/wRoadconstruction 88 364 835 1,108 677 742 1,086 1,863 1,275 1,386 931 941

Econonic development 1,063 1,156 1,693 1,343 1,726 1,972 1,382 1,553 1,452 1,412 1,244 1,235

o/wAgricult&natres. 494 620 834 962 780 885 837 1,312 1,011 1,134 914 914

Social development 162 370 908 984 712 872 1,141 1,957 1,032 1,089 936 936

o/w Education 45 176 449 462 442 433 471 768 479 547 445 445

Health 38 80 254 292 154 266 342 648 281 424 303 303

Others 35 94 285 309 232 318 306 397 366 289 252 252

Total capital expenditure 1,476 2,147 4,003 3,975 3,563 4,300 4,147 6,179 4,307 4,559 3,643 3,643

as a percentage of capital expenditre

4 Econonic infrastructure 14.2 22.2 27.8 33.7 25.1 26.5 31.8 36.8 33.8 38.8 33.2 33.5

o/w Road construction 6.1 14.5 20.8 27.7 19.0 17.3 26.2 30.2 29.6 30.4 25.6 25.8

Economic developmert 72.5 57.8 42.5 33.8 48.5 45.9 33.3 25.1 33.7 31.0 34.2 33.9

o/wAgricult&nat res. 34.0 31.1 20.9 24.3 21.9 20.6 20.2 21.2 23.5 24.9 25.1 25.1

Social development 10.9 15.8 22.6 24.8 20.0 20.3 27.5 31.7 24.0 23.9 25.7 25.7

o/wEducation 3.0 7.5 11.3 11.7 12.4 10.1 11.4 12.4 11.1 12.0 12.2 12.2

Health 2.6 3.8 6.3 7.4 4.3 6.2 8.2 10.5 6.5 9.3 8.3 8.3

Others 2.4 4.2 7.1 7.7 6.5 7.4 7.4 6.4 8.5 6.3 6.9 6.9

Total capital expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: Ministry of Finance, World Bank Database and Projection for 1999/00 by the PER Mission (February 2000).

Note: 1999/00 PERprojection figures are usedto calculatethe averageforyears of 1998/99-1999/00.


The estimated extemal assistance from 1996/97 onwards has been distributed among the sectors.

Appendix Table 6: Economic Classification Of General Government Expenditures, 1986/87-1999/00 1/Average

1986/87- 1991/92- 1995/96- 199S/99-

1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00

Actual Actual Pre. Act. Pre. Act. Actual Pre. Act. Pre. Act. Budget Pre. Act. Budget PER Proj.

mnillion birr

Recurrent expenditure 3,461 4,076.2 6,126.9 9,632.3 5,582 5,717.1 7,081.5 7,497.3 8,686.6 10,789.3 10,578.0

Wages and salaries 1,259 1,577.3 2,307.0 3,256.1 2,101 2,172.9 2,646.9 3,300.9 2,932.2 3,100.2 3,580.0

Materials and supplies 1,255 950.4 2,004.4 4,373.2 1,551 1,607.9 2,854.2 2,642.6 4,026.4 3,340.0 4,720.0

Grants, contr.trans. &other cur. transfers 192 354.5 330.8 372.4 388 326.9 278.0 360.5 335.7 1,889.6 409.0

Pensions 140 242.8 299.5 274.9 291 303.4 304.6 186.4 229.8 191.4 320.0

Subsidies 77 75.2 100.3 0.0 175 126.5 0.0 0.0 0.0 0.0 0.0

Interest and charges 238 658.4 892.3 1,061.9 923 918.7 835.7 1,001.9 956.8 1,418.1 1,167.0

External assistance 300 201.7 186.4 287.5 143 256.5 160.0 0.0 200.0 750.0 375.0

Miscellaneous 0 16.0 6.1 6.4 12 4.2 2.1 5.0 5.7 100.0 7.0

Capital expenditure 1,476 2,147 4,003.3 3,975.0 3,563 4,300 4147 6,179 4,307 4,558 3,643

Total expenditure 4,937 6,223 10,130 13,607 9,145 10,017 11,229 13,676 12,994 15,348 14,221

as a percentage oftotal expenditure

Recurrent expenditure 70.1 65.5 60.5 70.8 61.0 57.1 63.1 54.8 66.9 70.3 74.4

> Wages and salaries 25.5 25.3 22.8 23.9 23.0 21.7 23.6 24.1 22.6 20.2 25.2

Materialsandsupplies 25.4 15.3 19.8 32.1 17.0 16.1 25.4 19.3 31.0 21.8 33.2

Grants, contr.trans. &other cur. transfers 3.9 5.7 3.3 2.7 4.2 3.3 2.5 2.6 2.6 12.3 2.9

Pensions 2.8 3.9 3.0 2.0 3.2 3.0 2.7 1.4 1.8 1.2 2.3

Subsidies 1.6 1.2 1.0 0.0 1.9 1.3 0.0 0.0 0.0 0.0 0.0

Interest and charges 4.8 10.6 8.8 7.8 10.1 9.2 7.4 7.3 7.4 9.2 8.2

Externalassistance 6.1 3.2 1.8 2.1 1.6 2.6 1.4 0.0 1.5 4.9 2.6

Miscellaneous 0.0 0.3 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.7 0.0

Capital expenditure 29.9 34.5 39.5 29.2 39.0 42.9 36.9 45.2 33.1 29.7 25.6

Total expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


1/ General Government is Central + Regional Governments.

Note: 1999/00 PERprojectionfigures are usedto calculatethe average foryears of 1998/99-1999/00.


Appendix Table 7: Development In Defense Expenditure, 1986/87-1999/00Average

1986/87- 1991/92- 1995/96- 1998/99-

1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00

Actual Actual Pre. Act. Pre. Act. Actual Pre. Act. Pre. Act. Pre. Act. MoF Proj. PER Proj.

million birr

Defense expenditure 1,518.4 708.6 1,265.3 3,950.5 771.6 834.8 2,189.5 3,405.7 4,232.9 4,495.2o/w Wages and salaries 292.0 413.6 927.7 356.4 370.0 514.4 800.4 N/A 1,055.0

non-wages and salaries 416.0 851.9 3,022.7 415.4 465.0 1,675.4 2,605.4 N/A 3,440.0

Defense expenditure 100 100 100 100 100 100 100 100 100 100o/w Wages and salaries 41 33 23 46 44 23 24 N/A 23

non-wages and salaries 59 67 77 54 56 77 77 N/A 77

defense expenditure ratiosDefense expenditure %ofGDP 9.6 2.6 3.1 7.5 2.0 2.0 4.9 6.9 7.6 8.1Defense expenditure % oftotal expenditure 30.8 11.4 12.0 29.0 7.6 8.3 19.3 26.2 29.8 31.6Source: Ministry of Finance, World Bank Database and Projection for 1999/00 by the PER Mission (February 2000).Note: 1999/00 PER projection figures are usedto calculatethe average foryears of 1998/99-1999/00.


Appendix Table 8: Real Per Capita Expenditure, 1986/87-1999/00Average

Birr 1986/87- 1991/92- 1995/96- 1998/99-

1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00 1999/00Actual Actual Pre. Act. Pre. Act. Actual Pre. Act. Pre. Act Budget Pre. Act. Budget MoF Proj. PER Proj.

Total expenditureCurrentprices 103.78 118.20 174.15 217.39 162.13 172.11 187.45 221.66 210.59 241.73 223.80 223.99Constant prices: GDP deflator 70.20 50.73 60.68 66.95 59.77 61.06 60.90 70.01 66.52 72.63 67.25 67.30

Total capital expenditureCurrent prices 31.03 40.78 68.82 63.50 63.16 73.88 69.23 100.14 69.81 71.80 57.37 57.37Constantprices: GDP deflator 20.99 17.50 23.98 19.56 23.29 26.21 22.49 31.63 22.05 21.57 17.24 17.24

Total education expenditureCurrent prices 9.82 16.16 25.38 27.94 24.52 25.06 26.48 34.02 27.86 30.51 28.01 28.01Constant prices: GDP deflator 6.64 6.94 8.84 8.60 9.04 8.89 8.60 10.74 8.80 9.17 8.42 8.42

Capital expenditure in education sectorCurrent prices 0.94 3.35 7.71 7.38 7.84 7.44 7.87 12.45 7.77 8.61 7.01 7.01Constantprices: GDP deflator 0.63 1.44 2.69 2.27 2.89 2.64 2.56 3.93 2.45 2.59 2.11 2.11

Total health expenditureCurrentprices 3.39 5.95 10.40 11.76 8.55 10.27 12.29 18.27 11.94 13.08 11.58 11.59Constantprices:GDPdeflator 2.30 2.55 3.63 3.62 3.15 3.64 3.99 5.77 3.77 3.93 3.48 3.48

Capital expenditure in health sectorCurrent prices 0.80 1.52 4.37 4.66 2.73 4.57 5.70 10.51 4.55 6.68 4.77 4.77Constantprices: GDP deflator 0.54 0.65 1.52 1.44 1.01 1.62 1.85 3.32 1.44 2.01 1.43 1.43

Total road expenditure 1/Current prices 2.83 8.50 12.26 18.97 14.75 2.23 19.65 31.63 21.88 23.20 15.99 16.15Constant prices: GDP deflator 1.92 3.65 4.27 5.84 5.44 0.79 6.38 9.99 6.91 6.97 4.81 4.85

Capital expenditure in road sectorCurrent prices 1.86 6.91 14.36 17.70 12.00 12.75 18.13 30.20 20.66 21.84 14.67 14.82Constant prices: GDP deflator 1.26 2.97 5.00 5.45 4.43 4.52 5.89 9.54 6.53 6.56 4.41 4.45

Memo items:

Population 47.56 52.65 58.17 62.60 56.40 58.20 59.90 61.70 61.70 63.49 63.49 63.49GDPDeflator(1980/81=100) 1.48 2.33 2.87 3.25 2.71 2.82 3.08 3.17 - 3.17 3.33 3.33 3.33Source: Ministry of Finance, World Bank Database, Projection for 1999/00 by the PER Mission (February 2000) and MEDAC.

1/ Recurrent expenditure for road construction from 1994/95 onwards includes urban development.Note:1999/00 PER projection figures are used to calculate the average for years of 1998/99-1999/00.Projections for 1999/00 are as of end of January, 2000.

Appendix Table 9: Budget Transfers To Regions - 1993/94 - 1999/00_million binT

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00Regions RecuTent Capital Totali Recurrent Capital Totai Recurrent Capital Total i Recurrent Capital Totali Recurrt Capital Total Recurrent Capital Total Recurrent Capital Total

Tigray 763 130.0 2063: 104.7 156.4 261.1, 110.1 159.6 269.76 110.4 175.7 286 1 132.0 134.0 266.0- 109.8 119.6 229.4. 128.8 535 182.3Afar 39.1 57.0 96.0. 48.5 27.0 75.5, 37.5 76.3 113.8i 49.6 91.9 1415, 70.0 102.2 172.2, 863 123.5 209.8, 69.6 1064 176.0Aenara , 282.5 109.3 391.8- 358.9 204.2 563.1g 404.9 227.3 632.2- 404.7 320.4 725.1, 415.5 306.9 722.4- 4439 233.7 677.6. 402.1 1344 536.5Oronia 420.4 208.4 628.9. 474.8 170.0 644.81 484.3 286.8 771.2. 445.7 468.5 914.2- 506.5 330.1 836.6 528 2 351.0 879.2: 466.0 146.6 612.6Somali 38.3 22.0 60.2, 30.7 33.2 63.9. 22.3 88.8 111.1, 10.4 142.6 153.0. 30.8 173.1 203.9, 55.2 157.9 213.1. 81.6 152.8 234.4Benshangul 36.4 27.8 64.2. 4.8 29.0 33.8. 40.3 28.5 68.8. 35.2 76.2 111.3 59.9 102.2 162.1. 68.0 75.0 143.0 67.6 52.8 120.4SNNP 229.4 79.7 309.1, 277.8 192.5 470.3. 304.0 209.8 513.8, 286.9 249.4 536.3, 340.1 222.6 562.7, 394.6 169.1 563.7, 361.5 78.5 440.0Gambelta 26.7 27.3 54.0i 33.6 22.8 56.4, 35.3 28.5 63.8' 41.3 52.8 94.1 54.5 11.0 65.5. 57.9 72.7 130.6. 60.1 37.5 97.6Harai , 15.7 086 16.2, 19.6 11.0 30.6' 233 10.9 34.2 22.0 15.5 37.5. 37.1 39.5 76.6, 35.0 6.0 41.0' 34.5 24.1 58.6

AddisoAbab 8.2 114.1 122.3, 14.0 76.3 90.3, 16.1 1.0 17.1. 1.2 17.4 18.5. 2.2 2.2- 1.0 1.0' 0.0Dire Dawa 0.0 I I L1 0.0 3.0 3.0' 4.7 5.0 97. 4.2 11.0 15.2 14.8 17.1 31.9i 13.7 19.5 33.2, 8.6 8.0 16.6

Total 1,173.0 777 1,950.1 1,367.4 925.3 2,292.7, 1,482.8 1,122.5 2,605.3, 1.4114 1,621.5 3,032.9- 1,663.4 1,438.7 3,102.1- 1,793.6 1,328.0 3,121.6. 1,680.4 794.6 2,475.0Note: 1993/94 -1996/97 actual, 1997/98 -1998/99 preluinary actual and 1999/OChbudget

Appendix Table 10: General Governrnent Revenue And External Grants, 1986/87 - 1999/00 1/in million birr

Average

1986/87- 1 991/92- 1995/96- 1998/99-

Descriptions 1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00 1999/00Actual Actual Pre. Act. PTe. Act. Actual Pre Act Pre. Act. Budget Pre. Act. Budget MoF Proj PER Proj.

Tax revenue 2198.6 2691.7 5116.7 5951.7 4723.2 5358.2 5268.6 6630.6 5560.7 6839.8 6342.7Direct taxes 947.3 914.6 1842.7 2059.2 1754.0 1904.8 1869.3 2389.4 1989.6 2333.0 2128.8Income and profit tax 906.0 871.1 1683.4 1892.5 1649.0 1745.4 1655.9 2012.5 1816.2 2049.7 1968.9Personalincometax 257.9 284.4 379.1 508.9 337.4 366.3 433.6 441.6 496.6 508.2 521.1Rental income tax 0.0 0.6 8.9 28.8 3.0 8.6 15.2 24.1 15.6 26.7 42.0Businessprofittax 591.1 540.6 1192.1 1215.4 1222.3 1264.7 1089.4 1418.6 1169.0 1372.6 1261.7Agneultural income tax 55.5 43.6 95.5 113.4 82.5 102.0 102.0 104.1 111.7 110.5 115.0Tax on divd.& chance wiming 1.5 1.8 3.4 4.0 3.7 2.3 4.3 5.1 4.0 3.8 4.0capitalgains 0.0 0.0 4.3 22.2 0.0 1.4 11.5 19.0 19.3 28.0 25.0

Rural land use fee 41.3 37.8 90.5 108.3 77.2 96.6 97.8 103.9 106.6 108.3 110.0Urban land leas fa. 0.0 5.7 68.7 584 27.8 62.8 115.6 273.0 66.9 175.0 50.0

Domestic Indirect taxes 728.9 765.0 1208.8 1292.9 1155.6 1289.9 1180.9 1503.6 1192.6 1458.0 1393.1Sales/excise taxes 694.7 654.7 988.4 977.9 955.3 1067.9 942.1 1201.0 916.6 1091.3 1039.2Servicessales taxes 5.0 41.2 99.0 210.1 76.2 96.9 124.0 212.0 173.0 246.2 247.1Stampsales&duty 29.2 69.2 121.3 104.9 124.1 125.1 114.7 90.6 103.0 120.5 106.8

Import duties and taxes 413.7 943.3 1918.8 2444.1 1694.1 2025.1 2037.2 2563.2 2223.2 2885.0 2664.9Cutomsdutyinim.goods 234.0 485.1 989.5 1224.8 889.1 1066.9 1012.4 1236.5 1131.0 1407.1 1318.6Sales/excisetaxes 179.8 458.1 929.3 1219.3 804.9 958.2 1024.8 1326.7 1092.2 1477.9 1346.3

Export taxes 108.7 68.9 146.4 155.6 119.5 138.4 181.2 174.4 155.3 163.8 155.9

°° Non-tax revenue 1029.5 1121.1 2635.4 3829.3 2242.7 2519.2 3144.3 3664.0 3853.1 3590.6 3805.5Charsgea&fees 29.3 68.7 122.8 168.3 125.3 112.4 130.7 171.8 173.1 165.6 163.5Saleofgoods&services 44.8 68.6 146.5 313.3 120.5 155.o 164.1 348.6 279.5 355.8 347.1Governmentimvetmentincome 652.5 673.3 1123.7 1283.5 822.4 1148.5 1400.2 1496.3 1423.0 1144.9 1144.0Pension contribution 51.6 63.8 87.6 0.0 80.8 85.6 96.5 188.3Reimbursement&propertysales 54.5 71.5 128.6 126.4 177.2 116.4 92.2 0.0 91.8 161.4 160.9

Miscellaneous 59.1 107.3 408.0 782.6 299.1 330.4 594.7 540.4 665.1 530.9 900.0Other extaordinary 2/ 137.6 67.9 398.4 355.3 617.6 224.0 353.5 156.6 420.6 432.0 290.0Privatiation Proceeds 219.8 800.0 347.0 312.5 762.0 800.0 800.0 800.0

Total rvenue 3228.2 3812.8 7752.1 9781.0 6965.9 7877.4 8412.9 10294.6 9413.8 10430.4 10148.2 0.0

External grants 524.3 702.0 1291.4 997.6 1096.8 1504.0 1273.3 1755.9 1149.5 1643.2 845.6

Total revenue and grants 3752.5 4594.8 9043.4 10778.6 8062.7 9381.4 9686.2 12050.5 10563.3 12073.6 10993.8 0.0


1/ General Government is Central + Regional Governmenta.

2/ Coffee traders' surcharge, sugar auction sales, customs deposit and drought aid sales in 1995/96; through 1996/97 proceeds from sugar auction sales;

1997/98 onwards include fuel stabilization fund.

Note: 1999/00 MoF projection figures are used to calculate the average for years of 1998/99-1999/00.

Projection for 1999/00 are as of end of January, 2000.

Appendix Table 11: General Government Revenue And External Grants, 1986/87 - 1999/00 1/as a percentage of total revenue and external grants

Average

1986/87- 1991/92- 1995/96- 1998/99-

Descriptions 1990/91 1994/95 1997/98 1999/00 1995/96 1996/97 1997/98 1998/99 1998/99 1999/00 1999/00 1999/00

Actual Actual Pre. Act. Pre. Act. Actual Pre.Act. Pre. Act. Budget Pre. Act. Budget MoF Proj. PER Proj.

Tax revenue 58.6 58.6 56.6 55.2 58.6 57.1 54.4 55.0 52.6 56.7 57.7

Diret tamxes 25.2 19.9 20.4 19.1 21.8 20.3 19.3 19.8 18.8 19.3 19.4

ensome and profit tax 24.1 19.0 18.6 17.6 20.5 18.6 17.1 16.7 17.2 17.0 17.9

Peraonal income tax 6.9 6.2 4.2 4.7 4.2 3.9 4.5 3.7 4.7 4.2 4.7

Rental income tax 0.0 0.0 0.1 0.3 0.0 0.1 0.2 0.2 0.1 0.2 0.4

Businessprofittax 15.8 11.8 13.2 11.3 15.2 13.5 11.2 11.8 11.1 11.4 11.5

Agriculturalincoornetax 1.5 0.9 1.1 1.1 1.0 1.1 1.1 0.9 1.1 0.9 1.0

Tax on divd.& chance vwnmg 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Capital gains 0.0 0.0 0.0 0.2 0.0 0.0 0.1 0.2 0.2 0.2 0.2

Rural lad as tee 1.1 0.8 1.0 1.0 1.0 1.0 1.0 0.9 1.0 0.9 1.0

Urban land loam f.. 0.0 0.1 0.8 0.5 0.3 0.7 1.2 2.3 0.6 1.4 0.5

Domestic indirect taxes 19.4 16.6 13.4 12.0 14.3 13.7 12.2 12.5 113 12.1 12.7

Sales/excisetaxe 18.5 14.2 10.9 9.1 11.8 11.4 9.7 10.0 8.7 9.0 9.5

Servicessales taxes 0.1 0.9 1.1 1.9 0.9 1.0 1.3 1.8 1.6 2.0 2.2

Stmp sales & duty 0.8 1.5 1.3 1.0 1.5 1.3 1.2 0.8 1.0 1.0 1.0

Import duties ad taxes 11.0 20.5 21.2 22.7 21.0 21.6 21.0 21.3 21.0 23.9 24.2

Custom duty on irr.goods 6.2 10.6 10.9 11.4 11.0 11.4 10.5 10.3 10.7 1 1.7 12.0

Sales/excisetaxes 4.8 10.0 10.3 11.3 10.0 10.2 10.6 11.0 10.3 12.2 12.2

Export taxes 2.9 1.5 1.6 1.4 1.5 1.5 1.9 1.4 1.5 1.4 1.4

Non-tax revenue 27.4 24.4 29.1 35.5 27.8 26.9 32.5 30.4 36.5 29.7 34.6

Cbsrn & fees 0.8 1.5 1.4 1.6 1.6 1.2 1.3 1.4 1.6 1.4 1.5

Sale ofgoods & services 1.2 1.5 1.6 2.9 1.5 1.7 1.7 2.9 2.6 2.9 3.2

Covernnmntinvestnentsncome 17.4 14.7 12.4 11.9 10.2 12.2 14.5 12.4 13.5 9.5 10.4

Pension contnibution 1.4 1.4 1.0 0.0 1.0 0.9 1.0 1.6 0.0 0.0 0.0

Reimbursenict & prop" sdes 1.5 1.6 1.4 1.2 2.2 1.2 1.0 0.0 0.9 1.3 1.5

Miscellaneous 1.6 2.3 4.5 7.3 3.7 3.5 6.1 4.5 6.3 4.4 8.2

Otherextraordinary 2/ 3.7 1.5 4.4 3.3 7.7 2.4 3.6 1.3 4.0 3.6 2.6

Privatization Proceeds 0.0 0.0 2.4 7.4 0.0 3.7 3.2 6.3 7.6 6.6 7.3

Total revenue 86.0 83.0 8.7 90.7 86.4 84.0 86.9 85.4 89.1 86.4 92.3 0.0

External gnb 14.0 17.0 14.3 9.3 13.6 16.0 13.1 14.6 10.9 13.6 7.7

Total revenue and pants 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 0.0

Source: Minishy of Finance, World Bank Database and Projection for 1999/00 by the PER Mission (Februacy 2000).

1/ General Govemnment is Central + Regional Govemments.

2/ Coffee traders surcharge, sugar auction sales, cutoms deposit and drought aid sales in 1995/96; through 1996/97 proceeds from sugar auction sales;

1997/98 onwards include fuel stabilization fund.

Note: 1999/00 MoF projection figures ae used to calculate the average for years of 1998/99-1999/00.


Appendix Table 12: Functional Classification Of General Government Recurrent Expenditures, 1993/94-1999/00in million birr

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00

Actual Pre. Act. Budget MoF Proj.

General administration 1353 1657 1949 1860 3324 4777 4077 5726

o/w Defense 663 737 772 835 2190 3406 2500 4233

Econonic infrastructure 136 164 166 180 104 146 172 168

o/wRoadconstructionl/ 110 153 155 170 91 76 86 84

Economic services 310 405 454 481 554 632 679 665

o/w Agriculh & nat. res. 250 337 379 408 473 530 551 551

Social services 1212 1403 1422 1488 1708 1897 1926 1896

o/wEdlucation 741 864 941 1026 1115 1240 1390 1333

Health 281 310 328 332 394 456 407 433

Others 1389 1588 1591 1707 1392 1235 3937 2113

o/widterest&charges 957 839 923 919 836 957 1418 1418

extenal assistance 53 214 142 257 160 200 750 375

Total current expenditure 4400 5217 5582 5717 7081 8686 10789 10567

as a perceitage of recurent expenditure

General administration 30.8 31.8 34.9 32.5 46.9 55.0 37.8 54.2

o o/w Defense 15.1 14.1 13.8 14.6 30.9 39.2 23.2 40.1

Economic infastructur 3.1 3.1 3.0 3.2 1.5 1.7 1.6 1.6

o/w Road construction 1/ 2.5 2.9 2.8 3.0 1.3 0.9 0.8 0.8

Economic services 7.0 7.8 8.1 8.4 7.8 7.3 6.3 6.3

o/wAgricult.&nat.res. 5.7 6.5 6.8 7.1 6.7 6.1 5.1 5.2

Social services 27.5 26.9 25.5 26.0 24.1 21.8 17.8 17.9

o/w Education 16.8 16.6 16.9 17.9 15.7 14.3 12.9 12.6

Health 6.4 5.9 5.9 5.8 5.6 5.2 3.8 4.1

Others 31.6 30.4 28.5 29.9 19.7 14.2 36.5 20.0

o/winterest&charges 21.8 16.1 16.5 16.1 11.8 11.0 13.1 13.4

extenal assistance 1.2 4.1 2.5 4.5 2.3 2.3 7.0 3.5

Toal cument expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: Ministry of Finance.

1/ Road construction under recurrent expenditure includes urban developmnent from 1994/95 onwards.

Appendix Table 13: Functional Classification Of Federal Government Recurrent Expenditures, 1993/94-1999/00in million birr

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00Actual Pre. Act. Budget MoF Proj.

General administration 990.4 1117.1 1207.7 1245.0 2577.0 3871.7 3208.2 4873.4o/w Defense 663.0 736.6 771.6 834.8 2189.5 3405.7 2500.0 4232.9

Economic infrastructure 105.3 113.1 118.2 130.8 25.9 84.3 97.3 95.2o/w Road construction 1/ 87.9 112.3 117.0 129.7 23.0 21.6 25.2 24.0

Economic services 77.8 82.3 96.4 96.4 124.4 148.5 191.6 165.4o/wAgricult.&nat.res. 41.2 45.0 53.9 57.7 82.4 90.0 115.1 101.5

Social services 303.2 330.2 267.8 285.6 379.3 393.7 376.2 333.0o/w Education 113.4 107.4 107.5 148.0 165.7 175.5 273.8 223.4

Health 51.9 46.6 57.2 60.7 78.7 88.1 48.6 52.5Others 1234.1 1428.4 1421.6 1481.1 1161.6 1172.2 3554.0 2007.6

o/winterest&charges 957 839 923 919 836 957 1,418 1,418external assistance 53 214 142 257 160 200 750 375

Total currentexpenditure 2710.8 3071.1 3111.8 3239.0 4268.2 5670.4 7427.3 7474.5as a percentage of recurrent expenditure

General administration 36.5 36.4 38.8 38.4 60.4 68.3 43.2 65.2o/w Defense 24.5 24.0 24.8 25.8 51.3 60.1 33.7 56.6

Economic infrastructure 3.9 3.7 3.8 4.0 0.6 1.5 1.3 1.3o/w Road construction 1/ 3.2 3.7 3.8 4.0 0.5 0.4 0.3 0.3

Economic services 2.9 2.7 3.1 3.0 2.9 2.6 2.6 2.2o/w Agricult. & nat. res. 1.5 1.5 1.7 1.8 1.9 1.6 1.5 1.4

Social services 11.2 10.8 8.6 8.8 8.9 6.9 5.1 4.5o/wEducation 4.2 3.5 3.5 4.6 3.9 3.1 3.7 3.0

Health 1.9 1.5 1.8 1.9 1.8 1.6 0.7 0.7Othes 45.5 46.5 45.7 45.7 27.2 20.7 47.9 26.9

o/winterest&charges 35.3 27.3 29.7 28.4 19.6 16.9 19.1 19.0external assistance 2.0 7.0 4.5 7.9 3.7 3.5 10.1 5.0

Total current expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Ministry of Finance.


Appendix Table 14: Functional Classification Of Regional Government Recurrent Expenditures, 1993/94-1999/00in million birr

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00


General administration 362.7 540.2 741.8 615.1 746.8 904.9 868.3 852.2

o/w Defense

Economic infrastructure 30.8 50.7 47.8 49.6 78.5 61.3 74.2 72.7

o/w Road construction 1/ 22.0 41.0 37.9 40.0 68.3 54.0 61.1 60.2

Economnic services 231.8 322.3 358.0 384.2 429.3 483.8 487.0 499.4

o/w Agricuht & nat. res. 209.0 291.9 324.7 350.4 391.0 439.8 436.3 450.0

Social services 908.9 1072.5 1154.1 1202.8 1328.3 1503.7 1549.4 1562.6

o/wEducation 627.6 756.1 833.5 877.8 949.3 1064.5 1116.5 1110.0

Health 228.8 263.6 270.9 270.9 315.5 367.7 358.2 380.0

Others 154.6 160.1 168.9 226.4 230.3 62.4 382.9 105.2

o/w interest & charges

extemal assistance

Total currentexpenditure 1688.8 2145.7 2470.6 2478.1 2813.2 3016.0 3361.9 3092.1

as a percentage of recurrent expenditure

General administration 21.5 25.2 30.0 24,8 26.5 30.0 25.8 27.6

o/w Defense 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Economic infiastructure 1.8 2.4 1.9 2.0 2.8 2.0 2.2 2.4

o/wRoadconstruction I/ 1.3 1.9 1.5 1.6 2.4 1.8 1.8 1.9

Economnic services 13.7 15.0 14.5 15.5 15.3 16.0 14.5 16.2

o/wAgriculth&nat res. 12.4 13.6 13.1 14.1 13.9 14.6 13.0 14.6

Social services 53.8 50.0 46.7 48.5 47.2 49.9 46.1 50.5

o/w Education 37.2 35.2 33.7 35.4 33.7 35.3 33.2 35.9

Health 13.5 12.3 11.0 10.9 11.2 12.2 10.7 12.3

Others 9.2 7.5 6.8 9.1 8.2 2.1 11.4 3.4

o/w interest & charges 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

extenal assistance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total current expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0



Appendix Table 15: Functional Classification Of General Government Capital Expenditures, 1993/94-1999/00in mnillion birr

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00

Actual Pre. Act Budget MoF Proj.

Econormic infrastructure 675 935 893 1138 1318 1457 1768 1210

o/w Road construction 415 750 677 742 1086 1275 1386 931

Economie development 1300 1512 1726 1972 1382 1452 1412 1244

o/wAgricult. &nat res. 721 757 780 885 837 toll 1134 914

Social development 621 507 712 872 1141 1032 1089 936

o/w Education 256 269 442 433 471 479 547 445

Health 69 120 154 266 342 281 424 303

Others 99 202 232 318 306 366 289 252

Total capital expenditure 2694 3156 3563 4300 4147 4307 4559 3643

as a percentage of capital expenditure


o/w Road construction 15.4 23.7 19.0 17.3 26.2 29.6 30.4 25.6

Economic development 48.3 47.9 48.5 45.9 33.3 33.7 31.0 34.2

o/w Agricult. & nat. res. 26.8 24.0 21.9 20.6 20.2 23.5 24.9 25.1

Social development 23.0 16.1 20.0 20.3 27.5 24.0 23.9 25.7

o/wEducation 9.5 8.5 12.4 10.1 11.4 11.1 12.0 12.2

Health 2.5 3.8 4.3 6.2 8.2 6.5 9.3 8.3

Others 3.7 6.4 6.5 7.4 7.4 8.5 6.3 6.9

Total capital expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


Note: The estimated extemal assistance from 1996/97 onwards has been distributed among the sectors.

Appendix Table 16: Functional Classification Of Federal Government Capital Expenditures, 1993/94-1999/00in million birr

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00

Actual Pre. Act. Budget MoF Proj.Economic infrastructure 626.4 681.3 569.8 835.0 873.4 1 IO.8 1384.2 883.5

o/wRoadconstruction 369.2 510.7 371.2 448.9 650.2 926.1 1010.3 611.5

Economnicdevelopment 1026.5 1186.1 1305.0 1392.3 968.8 1047.8 1096.0 975.5o/w Agricult & nat res. 482.1 434.0 367.0 307.0 428.1 609.5 820.3 647.5


o/w Education 182.8 170.5 308.1 198.5 228.9 321.5 444.4 358.2

Health 13.3 30.6 33.9 68.9 122.8 117.1 321.6 216.0Others 60.9 103.4 114.8 129.0 125.3 141.3 138.5 123.7

Total capital expenditure 2058.2 2213.3 2351.9 2665.7 2511.8 2892.5 3405.9 2663


Economic ifriastructure 30.4 30.8 24.2 31.3 34.8 38.1 40.6 33.2o/wRoadconstruction 17.9 23.1 15.8 16.8 25.9 32.0 29.7 23.0

Economic development 49.9 53.6 55.5 52.2 38.6 36.2 32.2 36.6o/wAgricult&natres. 23.4 19.6 15.6 11.5 17.0 21.1 24.1 24.3


o/w Education 8.9 7.7 13.1 7.4 9.1 11.1 13.0 13.5

Health 0.6 1.4 1.4 2.6 4.9 4.0 9.4 8.1Others 3.0 4.7 4.9 4.8 5.0 4.9 4.1 4.6


Source: Mfinisty of Finance.

Note: The estimated external assistance fiom 1996/97 onwards has been distributed among the sectors.

Appendix Table 17: Functional Classification Of Regional Government Capital Expenditures, 1993/94-1999/00in million birr

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00

Actual Pre. Act Budget MoF Proj.

Econonic infrastructure 48.2 253.6 322.8 302.7 444.8 356.4 383.9 326.3


Economicdevelopment 273.9 325.5 421.2 580.2 412.7 404.5 316.3 268.9

o/wAgricult.&nat.res. 239.1 322.8 413.5 577.7 409.2 401.1 313.6 266.5


o/w Education 73.2 98.7 133.8 234.4 242.4 157.7 102.1 86.8

Health 55.2 89.4 120.0 197.2 218.9 163.6 102.3 86.9

Others 37.7 99.1 117.0 188.8 180.6 224.3 150.8 128.3

Totalcapitalexpenditure 636.1 943.1 1210.7 1634.4 1634.9 1414.7 1152.7 979.9




Econonic development 43.1 34.5 34.8 35.5 25.2 28.6 27.4 27.4

o/w Agricult & nat. res. 37.6 34.2 34.2 35.3 25.0 28.4 27.2 27.2


o/wEducation 11.5 10.5 11.0 14.3 14.8 11.1 8.9 8.9

tn, Health 8.7 9.5 9.9 12.1 13.4 11.6 8.9 8.9

Others 5.9 10.5 9.7 11.6 11.0 15.9 13.1 13.1



Note: The estimated external assistance from 1996/97 onwards has been distributed among the sectors.

Appendix Table 18: General Government Revenue And External Grants, 1993/94-1999/00

in million birr


Tax revenue 3076.5 3878.7 4723.2 5358.2 5268.6 5560.7 6839.8 6342.7

Direct taxes 945.2 1311.7 1754.0 1904.8 1869.3 1989.6 2333.0 2128.9Income and profit tax 899.6 1230.9 1649.0 1745.4 1655.9 1816.2 2049.7 1968.9

Personal incometax 283.7 307.7 337.4 366.3 433.6 496.6 508.2 521.1

Rental incometax 2.0 0.6 3.0 8.6 15.2 15.6 26.7 42.0Businessprofittax 557.7 851.5 1222.3 1264.7 1089.4 1169.0 1372.6 1261.7Agriculturalimcometax 53.6 68.4 82.5 102.0 102.0 111.7 110.5 115.0Tax on divd.& chance winming 2.6 2.7 3.7 2.3 4.3 4.0 3.8 4.0Capital gains 0.0 0.0 0.0 1.4 11.5 19.3 28.0 25.0

Raral land use fee 45.6 58.1 77.2 96.6 97.8 106.6 108.3 110.0Urban land lease fee 0.0 22.8 27.8 62.8 115.6 66.9 175.0 50.0Domestic Indirect taxes 834.1 945.4 1155.6 1289.9 1180.9 1192.6 1458.0 1393.1Sales/excise taxes 710.5 770.8 955.3 1067.9 942.1 916.6 1091.3 1039.2Servicessalestaxes 44.7 67.7 76.2 96.9 124.0 173.0 246.2 247.1Stamnpsales&duty 78.9 106.9 124.1 125.1 114.7 103.0 120.5 106.8

Import duties and taxes 1250.6 1420.1 1694.1 2025.1 2037.2 2223.2 2885.0 2664.9Customs dutyonim.goods 632.1 747.2 889.1 1066.9 1012.4 1131.0 1407.1 1318.6Sales/excisetaxes 618.5 672.9 804.9 958.2 1024.8 1092.2 1477.9 1346.3

Export taxes 46.6 201.5 119.5 138.4 181.2 155.3 163.8 155.9

Non-tax revenue 862.4 2034.2 2242.7 2519.2 3144.3 3853.1 3590.6 3805.5Charges & fees 59.9 107.6 125.3 112.4 130.7 173.1 165.6 163.5Sale of goods&services 81.9 104.0 120.5 155.0 164.1 279.5 355.8 347.1Govenmentinvestmentincome 506.6 1443.0 822.4 1148.5 1400.2 1423.0 1144.9 1144.0Pension contribution 67.4 75.7 80.8 85.6 96.5 0.0 0.0 0.0Reimbursement &propertysales 39.7 181.4 177.2 116.4 92.2 91.8 161.4 160.9Miscellaneous 107.0 122.6 299.1 330.4 594.7 665.1 530.9 900.0Other extraordinary 1/ 0.0 0.0 617.6 224.0 353.5 420.6 432.0 290.0Privatization Proceeds 0.0 0.0 0.0 347.0 312.5 800.0 800.0 800.0

Total revenue 3938.9 5912.9 6965.9 7877.4 8412.9 9413.8 10430.4 10148.2

External grants 987.2 1131.7 1096.8 1504.0 1273.3 1149.5 1643.2 845.6

Total revenue and grants 4926.1 7044.6 8062.7 9381.4 9686.2 10563.3 12073.6 10993.8

Source: Ministry of Finance.1/ Coffee traders' surcharge, sugar auction sales, customs deposit and drought aid sales in 1995/96; through 1996/97 proceedsfrom sugar auction sales; 1997/98 onwards include fuel stabilization fund.

Appendix Table 19: General Government Revenue And External Grants, 1993/94-1999/00as a percentage of total revenue and grants


Tax revenue 62.5 55.1 58.6 57.1 54.4 52.6 56.7 57.7Direct taxes 19.2 18.6 21.8 20.3 19.3 18.8 19.3 19.4Income and profit tax 18.3 17.5 20.5 18.6 17.1 17.2 17.0 17.9Personal incomnetax 5.8 4.4 4.2 3.9 4.5 4.7 4.2 4.7Rental income tax 0.0 0.0 0.0 0.1 0.2 0.1 0.2 0.4Businessprofittax 11.3 12.1 15.2 13.5 11.2 11.1 11.4 11.5Agriculturalincometax 1.1 1.0 1.0 1.1 1.1 1.1 0.9 1.0Tax on divd.& chance winning 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0Capital gains 0.0 0.0 0.0 0.0 0.1 0.2 0.2 0.2

Rural land use fee 0.9 0.8 1.0 1.0 1.0 1.0 0.9 1.0Urban land lease fee 0.0 0.3 0.3 0.7 1.2 0.6 1.4 0.5Domesticindirecttaxes 16.9 13.4 14.3 13.7 12.2 11.3 12.1 12.7Sales/excise taxes 14.4 10.9 11.8 11.4 9.7 8.7 9.0 9.5Services sales taxes 0.9 1.0 0.9 1.0 1.3 1.6 2.0 2.2Stamp sales & duty 1.6 1.5 1.5 1.3 1.2 1.0 1.0 1.0

Inport duties and taxes 25.4 20.2 21.0 21.6 21.0 21.0 23.9 24.2Customs duty on im.goods 12.8 10.6 11.0 11.4 10.5 10.7 11.7 12.0Sales/excise taxes 12.6 9.6 10.0 10.2 10.6 10.3 12.2 12.2

Export taxes 0.9 2.9 1.5 1.5 1.9 1.5 1.4 1.4

Non-tax revenue 17.5 28.9 27.8 26.9 32.5 36.5 29.7 34.6Charges & fees 1.2 1.5 1.6 1.2 1.3 1.6 1.4 1.5Sale of goods & services 1.7 1.5 1.5 1.7 1.7 2.6 2.9 3.2Govenrnment investrent income 10.3 20.5 10.2 12.2 14.5 13.5 9.5 10.4Pension contribution 1.4 1.1 1.0 0.9 1.0 0.0 0.0 0.0Reinbursement & property sales 0.8 2.6 2.2 1.2 1.0 0.9 1.3 1.5Miscellaneous 2.2 1.7 3.7 3.5 6.1 6.3 4.4 8.2Other extaordinary 2/ 0.0 0.0 7.7 2.4 3.6 4.0 3.6 2.6Privatization Proceeds 0.0 0.0 0.0 3.7 3.2 7.6 6.6 7.3

Total revenue 80.0 83.9 86.4 84.0 86.9 89.1 86.4 92.3

External grants 20.0 16.1 13.6 16.0 13.1 10.9 13.6 7.7

Total revenue and grants 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Ministry of Finance.

1/ Coffee traders' surcharge, sugar auction sales, customs deposit and drought aid sales in 1995/96; through 1996/97 proceedsfrom sugar auction sales;1997/98 onwards include fuel stabilization fund.

Appendix Table 20: Federal Government Revenue And External Grants, 1993/94-1999/00in million birr


Tax revenue 2557.3 3226.5 3892.9 4389.5 4186.6 4511.4 5571.6 5255.2Direct taxes 524.5 782.0 1130.7 1166.9 1016.6 1132.9 1305.1 1258.9

Income and profit tax 524.5 782.0 1130.7 1166.9 1016.6 1132.9 1305.1 1258.9Personal incometax 172.3 162.9 163.4 175.2 199.4 225.8 245.1 246.1

Rental income tax 0.0 0.0 0.3 1.0 0.9 0.2 1.1 22.0Business profit tax 349.7 616.5 963.5 988.4 813.1 902.9 1055.1 986.7Agricultural income taxTax on divd.& chance winning 2.5 2.7 3.5 2.3 3.3 4.0 3.8 4.0

Capital gains

Rural land use feeUrban land lease feeDomestic indirect taxes 735.6 822.9 948.5 1059.2 951.5 1000.0 1217.7 1175.6Sales/excise taxes 655.0 697.5 830.8 920.2 799.9 795.3 945.0 902.7

Services salestaxes 36.0 56.9 58.7 79.5 102.1 149.9 216.5 218.1Stampsales&duty 44.6 68.5 59.1 59.5 49.5 54.8 56.2 54.8

Import duties and taxes 1250.6 1420.1 1694.1 2025.1 2037.2 2223.2 2885.0 2664.9Customsdutyonim.goods 632.1 747.2 889.1 1066.9 1012.4 1131.0 1407.1 1318.6Sales/excise taxes 618.5 672.9 804.9 958.2 1024.8 1092.2 1477.9 1346.3

(-h Export taxes 46.6 201.5 119.5 138.4 181.2 155.3 163.8 155.900

Non-tax revenue 685.9 1799.8 1943.6 2135.4 2631.1 3386.7 3044.9 3296.1Charges&fees 29.1 61.5 67.9 57.0 80.7 122.4 111.5 111.5Sale of goods&services 31.0 33.3 36.1 62.8 68.2 183.3 250.0 245.1Governmentinvestmentincome 505.5 1441.5 821.0 1144.7 1395.2 1404.6 1139.4 1138.8Pension contribution 23.5 22.4 23.6 24.0 28.0 0.0Reimbursement&propertysales 39.0 181.2 177.1 116.3 92.0 90.6 161.2 160.7Miscellaneous 57.8 59.8 200.3 159.7 301.0 365.2 150.9 550.0Other extraordinary 1/ 0.0 0.0 617.6 224.0 353.5 420.6 432.0 290.0Privatization Proceeds 0.0 0.0 0.0 347.0 312.5 800.0 800.0 800.0

Total revenue 3243.2 5026.3 5836.5 6525.0 6817.6 7898.0 8616.5 8551.3

External grants 987.2 1131.7 1096.8 1504.0 1273.3 1149.5 1643.2 845.6


1/ Coffee traders' surcharge, sugar auction sales, customs deposit and drought aid sales in 1995/96; through 1996/97 proceeds

from sugar auction sales; 1997/98 onwards include fuel stabilization fund.

Appendix Table 21: Federal Government Revenue And External Grants, 1993/94-1999/00as a percentage oftotal revenue and grants

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00Actual Pre. AcL Budget MoF Proj.

Tax revenue 60.5 52.4 56.1 54.7 51.7 49.9 54.3 55.9Direct taxes 12.4 12.7 16.3 14.5 12.6 12.5 12.7 13.4Income and profit tax 12.4 12.7 16.3 14.5 12.6 12.5 12.7 13.4Personal incometax 4.1 2.6 2.4 2.2 2.5 2.5 2.4 2.6Rental incomne tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2Business profittax 8.3 10.0 13.9 12.3 10.0 10.0 10.3 10.5Agricultl inconme taxTaxondivd.&chancewinning 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0Capital gains

Runl lnd use feeUrban land lease feeDonmestic liredx17.4 13.4 13.7 13.2 11.8 11.1 11.9 12.5Sales/excisetaxes 15.5 11.3 12.0 11.5 9.9 8.8 9.2 9.6Savices sales taxes 0.9 0.9 0.8 1.0 1.3 1.7 2.1 2.3Stampsales&duty 1.1 1.1 0.9 0.7 0.6 0.6 0.5 0.6

Import dutie and taxes 29.6 23.1 24.4 25.2 25.2 24.6 28.1 28.4Custosnsdutyon im.goods 14.9 12.1 12.8 13.3 12.5 12.5 13.7 14.0Sales/excise taxes 14.6 10.9 11.6 11.9 12.7 12.1 14.4 14.3

C.)' Export taxes 1.1 3.3 1.7 1.7 2.2 1.7 1.6 1.7

Non-tax revenue 16.2 29.2 28.0 26.6 32.5 37.4 29.7 35.1Charges & fees 0.7 1.0 1.0 0.7 1.0 1.4 1.1 1.2Sale ofgoods & services 0.7 0.5 0.5 0.8 0.8 2.0 2.4 2.6Govemmentinvestnentincomne 11.9 23.4 11.8 14.3 17.2 15.5 11.1 12.1Pension contribution 0.6 0.4 0.3 0.3 0.3 0.0 0.0 0.0Reiinbursemnet&propertysales 0.9 2.9 2.6 1.4 1.1 1.0 1.6 1.7Miscellaneous 1.4 1.0 2.9 2.0 3.7 4.0 1.5 5.9

Oterexraordinay 1/ 8.9 2.8 4.4 4.6 4.2 3.1Privatization Proceeds 0.0 4.3 3.9 8.8 7.8 8.5

Total revenue 76.7 81.6 84.2 81.3 84.3 87.3 84.0 91.0

External grants 23.3 18.4 15.8 187 15.7 12.7 . 16.0 9.0


1/ Coffee traders' surcharge, sugar auction sales, customs deposit and drought aid sales in 1995/96; through 1996/97 proceedsfrom sugar auction sales; 1997/98 onwards include fuel stabilization fund.

Appendix Table 22: Regional Governments' Revenue And External Grants, 1993/94-1999/00in million birr


Tax revenue 519.2 652.2 830.3 968.6 1082.0 1049.3 1268.2 1087.5Dlirecttaxes 420.7 529.7 623.2 737.9 852.7 856.7 1027.9 870.0Income and profit tax 375.1 448.8 518.2 .578.5 639.3 683.3 744.6 710.0Personal incometax 111.4 144.8 174.0 191.1 234.2 270.8 263.1 275.0Rental incometax 2.0 0.6 2.7 7.6 14.3 15.4 25.6 20.0Business profittax 208.0 235.0 258.8 276.3 276.3 266.1 317.4 275.0Agriculturalincometax 53.6 68.4 82.5 102.0 102.0 111.7 110.5 115.0Tax on divd.& chance winning 0.1 0.0 0.2 1.0 0.0Capital gains 1.4 11.5 19.3 28.0 25.0

Rurl land use fee 45.6 58.1 77.2 96.6 97.8 106.6 108.3 110.0Urban land lease fee 0.0 22.8 27.8 62.8 115.6 66.9 175.0 50.0Domestic Indirect taxes 98.5 122.5 207.1 230.7 229.4 192.6 240.3 217.5Sales/excise taxes /i 55.5 73.3 124.6 147.7 142.2 121.4 146.3 136.5Servicessalestaxes 8.7 10.8 17.5 17.4 21.9 23.1 29.7 29.0Stamp sales & duty 34.3 38.4 65.0 65.7 65.2 48.1 64.3 52.0

Import duties and taxesCustons duty on im.goodsSales/excise taxes

O Export taxes

Non-tax revenue 176.6 234.4 299.1 383.8 513.2 466.5 545.6 509.4Charges&fees 30.8 46.1 57.4 55.3 50.0 50.7 54.1 52.0Sale of goods & services 50.9 70.6 84.4 92.2 95.9 96.2 105.8 102.0Goveffmentinvesmnsetincome 1.1 1.4 1.5 3.7 5.0 18.4 5.5 5.2Pension contribution 43.9 53.3 57.2 61.6 68.5Re-imbursement & property sales 0.7 0.2 0.1 0.1 0.2 1.2 0.2 0.2Miscellaneous 49.2 62.8 98.7 170.8 293.7 300.0 380.0 350.0

Other extraordinaryPrivatization Proceeds

Total revenue 695.8 886.6 1129.4 1352.4 1595.2 1515.8 1813.8 1596.9Source: Ministry of Finance.

Appendix Table 23: Regional Governments' Revenue And External Grants, 1993/94-1999/00as a percentage of total revenue and grants

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00


Tax revenue 74.6 73.6 73.5 71.6 67.8 69.2 69.9 68.1Direct taxes 60.5 59.7 55.2 54.6 53.5 56.5 56.7 54.5Income and profit tax 53.9 50.6 45.9 42.8 40.1 45.1 41.0 44.5Personal incometax 16.0 16.3 15.4 14.1 14.7 17.9 14.5 17.2Rental incometax 0.3 0.1 0.2 0.6 0.9 1.0 1.4 1.3

Busmessprofittax 29.9 26.5 22.9 20.4 17.3 17.6 17.5 17.2

Agriculturalincometax 7.7 7.7 7.3 7.5 6.4 7.4 6.1 7.2

Taxon divd.& chance winning 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0

Capital gains 0.0 0.0 0.0 0.1 0.7 1.3 1.5 1.6

Rural land use fee 6.6 6.5 6.8 7.1 6.1 7.0 6.0 6.9Urban land lease fee 0.0 2.6 2.5 4.6 7.2 4.4 9.6 3.1Domestic indirect taxes 14.2 13.8 18.3 17.1 14.4 12.7 13.2 13.6Sales/excisetaxes/I 8.0 8.3 11.0 10.9 8.9 8.0 8.1 8.5Servicessalestaxes 1.3 1.2 1.5 1.3 1.4 1.5 1.6 1.8Stamp sales &duty 4.9 4.3 5.8 4.9 4.1 3.2 3.5 3.3

Import duties and taxesCustoms duty on im.goodsSales/excise taxes

Export taxes

Non-tax revenue 25.4 26.4 26.5 28.4 32.2 30.8 30.1 31.9Charges & fees 4.4 5.2 5.1 4.1 3.1 3.3 3.0 3.3Sale of goods & services 7.3 8.0 7.5 6.8 6.0 6.3 5.8 6.4Government investment income 0.2 0.2 0.1 0.3 0.3 1.2 0.3 0.3Pension cortribution 6.3 6.0 5.1 4.6 4.3 0.0 0.0 0.0Reimbursement&propertysales 0.1 0.0 0.0 0.0 0.0 0.1 0.0 0.0Miscellaneous 7.1 7.1 8.7 12.6 18.4 19.8 21.0 21.9Other extraordinaryPrivatization Proceeds

Total revenue 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Ministry of Finance.

Appendix Table 24: Ethiopia: Selected Macroeconomic Indicatorsin biilion biFn

FY Ending Juiy 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

GROSS DOMESTIC PRODUCT

Actual Estim. Proj.

GDP AT MARKET PRICES 16.8 19.1 20.8 26.7 28.3 33.9 37.9 41.5 45.0 49.2 55.5 Growth of Real GDP and Its Major Sectors

GDP atCFC 1980/81 11.3 10.9 10.5 11.7 11.9 12.6 14.0 14.7 14.6 15.6 16.7 30-

AGRICULTURE 5.8 6.1 5.9 6.3 6.1 6.3 7.2 7.5 6.7 7.0 7.520

INDUSTRY 1.3 1.0 1.0 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9

SERVICES 4.3 3.7 3.6 4.2 4.5 4.9 5.3 5.7 6.3 6.8 7.2 i 10o

DISTRIBUTION SERVICES 1.7 1.3 1.3 1.6 1.7 1.8 1.9 2.1 2.2 2.3 2.4 O

~0OTHER SERVICES 2.6 2.4 2.3 2.6 2.9 3.2 3.4 3.6 4.1 4.5 4.8 i

-10

GOVERNMENT FINANCE

Actual Pre.Actual Proj. -20

REVENUE 3.1 2.7 2.2 3.4 3.9 5.9 7.0 7.9 8.4 9.4 10.1 1989 1991 1993 1995 1997 1999Fiscal Year

EXTERNAL GRANTS 0.6 0.5 0.5 0.5 1.0 1.1 1.1 1.5 1.3 1.2 0.8

EXPENDITURE 5.3 4.8 4.2 5.2 7.1 8.4 10.2 10.0 11.3 13.0 14.2 | AGRICULTURE INDUSTRY

CURRENT EXPENDITURE 3.8 3.6 3.3 3.4 4.4 5.2 5.6 5.7 7.1 8.7 10.6

CAPITAL EXPENDITURE 1.4 1.2 1.0 1.8 2.7 3.2 3.6 4.3 4.1 4.3 3.6 Govemrnment Fnance

BUDGET DEFICIT 20

DEFICIT (before grantsl -2.1 -2.1 -2.0 -1.8 -3.2 -2.5 -3.2 -2.1 -2.9 -3.6 -4.1 15

DEFICIT lafter grants) -1.6 -1.7 -1.5 -1.3 -2.2 -1.3 -2.1 -0.6 -1.6 -2.4 -3.2

FINANCING: 1.6 1.7 1.5 1.3 2.2 1.3 2.1 0.6 1.6 2.2 3.2 ,*

EXTERNAL ASSISTANCE 0.5 0.4 0.3 0.5 1.7 1.2 1.4 0.7 0.8 1.3 0.9 2 5

DOMESTIC BORROWING 1.1 1.3 1.2 0.8 0.5 0.1 0.7 -0.1 0.9 0.9 2.3 m, 0

EXTERNAL ACCOUNT

Actual Proj. -10

EXPORTS 0.8 0.6 0.3 0.9 1.6 2.8 2.6 3.9 3.6 3.7 4.4 1989 1991 1993 1995 1997 1999

(OF WHICH: COFFEE) 0.4 0.3 0.2 0.5 0.9 1.8 1.7 2.3 2.4 2.1 2.5 _ REVENUE EXPENDITURE

IMPORTS 1.8 2.1 1.8 4.5 5.3 6.6 7.2 7.8 10.3 11.0 12.3 - - - DEFICIT (excl. grants) DEFICIT (inl. grants)

SERVICES 0.1 0.0 0.0 -0.1 0.1 0.4 0.6 0.6 0.6 0.6 0.5

PRIVATE TRANSFERS 0.4 0.4 0.7 1.1 1.4 1.9 2.0 1.7 1.7 2.2 2.6 Balance of Trade15-

OFFICIAL TRANSFERS 0.3 0.6 0.9 1.7 1.6 2.7 2.5 1.5 2.0 1.6 1.8

CURRENT ACCOUNT (excl. off. trans.) -0.6 -1.1 -0.8 -2.6 -2.2 -1.5 -2.0 -1.6 -4.4 -4.6 -4.9 10 - _

CAPITAL ACCOUNT 0.4 0.4 -0.2 -0.5 1.4 0.1 -0.1 -0.7 1.7 1.6 -0.35

OTHER ITEMS -0.5 0.1 -0.3 1.0 0.1 -0.2 -0.9 -1.7 -2.1 0.7 0.0 f

OVERALL BALANCE -0.3 0.0 -0.4 -0.4 1.0 1.0 -0.6 -2.5 -2.8 -0.6 -3.4 0- _ __

FINANCING: 0.3 0.0 0.4 0.4 -1.0 -1.0 0.6 2.5 0.8 0.6 3.4

CHANGE IN RESERVES 0.1 -0.3 -0.1 -0.4 -1.9 -1.9 -0.2 1.8 0.5 0.0 0.9

CHANGE IN ARREARS 0.2 0.3 0.5 -0.3 0.6 0.6 0.7 0.7 0.0 0.3 -45.0 -10 -

DEBTRELIEF 0.0 0.0 0.0 1.1 0.3 0.3 0.1 0.0 0.3 0.3 47.4 1989 1991 1993 1995 1997 1999

RESERVES IN MONTHS OF IMPORTS 0.3 1.4 2.4 3.3 6.5 7.5 9.8 7.4 4.3 3.9 3.3 | EXPORTS IMPORTS -- CURRENT ACCOUNT (excl. off. trans.)

... continued Appendix Table 24 : Ethiopia: Selected Macroeconomic Indicatorsin bAion bin

FY Ending July 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Money SupplyMONETARY DATA 30 - 100

MONEY & QUASI-MONEY 6.7 7.9 9.0 10.1 11.6 14.4 15.7 16.5 18.6 19.7 20.0 25 - - 80

CREDITTOGOVERNMENT 1/ 5.0 6.0 7.0 9.1 9.6 9.1 7.9 8.8 9.4 9.8 11.8 20 -6

60PERCENT CHANGE OVER PREVIOUS YEAR 15

NOMINALGDP 15.0 13.7 8.6 28.3 6.2 19.6 12.0 9.3 8.6 9.3 12.8 10 - - 40

GDP at CFC 1980 4.3 -4.0 -3.6 12.0 1.6 6.2 10.6 5.2 -0.5 6.3 7.3 5- - 1l[20

AGRICULTURE 4.2 5.8 -2.7 6.1 -3.6 3.4 14.7 3.4 -10.3 4.2 7.8 0- O

INDUSTRY -8.3 -19.6 -7.1 28.4 7.0 8.0 5.4 6.8 6.4 7.6 6.3 1989 1991 1993 1995 1997 1999

SERVICES 9.0 -12.7 -4.2 17.4 7.9 9.4 7.0 7.1 10.4 8.2 7.1

EXPORTS (NOMINAL) -17.7 -24.3 -44.2 197.5 70.3 75.4 -8.0 49.3 -6.4 0.2 19.3 I ICREDITTOGOVT./M2(%) -B ROADMONEYGROWTH(%I|

IMPORTS (NOMINAL) -13.6 16.8 -15.0 148.0 17.7 25.7 8.8 7.6 32.8 6.7 4.0

IN PERCENT OF GDP AT MARKET PRMCES

REVENUE 18.7 14.1 10.6 12.8 13.9 17.5 18.4 19.0 18.7 19.1 18.2

EXPENDITURE 31.4 25.3 20.2 19.6 25.0 24.7 26.9 24.2 25.2 26.4 25.6

BUDGET DEFICIT:

EXCLUDING GRANTS -12.7 -11.2 -9.6 -6.8 -11.1 -7.3 -8.5 -5.2 -6.5 -7.3 -7.4 25 hfl tion ndExchange Rtes

INCLUDING GRANTS -9.4 -8.8 -7.0 -5.0 -7.7 -3.9 -5.6 -1.5 -3.6 -4.9 -5.8 20- 7.5

FINANCING: 15 - /

°% EXTERNAL ASSISTANCE 2.9 2.2 1.4 1.9 6.0 3.7 3.8 1.8 1.7 2.7 1.7 1- / iA-610-DOMESTIC BORROWING 8.5 6.6 5.6 3.2 1.7 0.2 1.8 -0.2 1.9 1.8 4.2 5 4.5

CURRENT ACCOUNT (Excl. Off. Trans.) -3.6 -6.0 -3.9 -9.7 -7.7 -4.4 -5.4 -3.8 -9.8 -9.3 -8.8 3

OVERALL 8ALANCE -1.9 0.0 -2.1 -1.6 3.4 3.0 -1.5 -6.1 -6.3 -1.2 -6.1 0

MONEY & QUASI-MONEY 39.7 41.5 43.2 38.0 40.9 42.5 41.3 39.8 41.3 40.0 36.0 -5 1.5

MONEY SUPPLY & INFLATION -10 0

BROADMONEYGROWTH(%) 17.2 18.6 13.3 12.7 14.4 24.2 8.6 5.5 12.8 5.8 1.6 1989 1991 1993 1995 1997 1999

CREDIT TO GOVT./M2(%1 75.2 75.9 78.2 90.1 82.9 62.9 50.4 53.3 50.3 49.9 58.8 - INFLATION RATE(%) 2/ EXCHANGE RATE (IRR/SS

VELOCITY OF CIRCULATION 2.5 2.4 2.3 2.6 2.4 2.4 2.4 2.5 2.4 2.5 2.8

GDP DEFLATOR 1.5 1.8 2.0 2.3 2.4 2.7 2.7 2.8 3.1 3.2 3.3

INFLATIONRATEI%) 2/ 5.2 20.9 21.0 10.0 1.2 13.3 0.9 -6.4 2.5 4.8 5.0

EXCHANGE RATE IBIRR/US5I 3/ 2.07 2.07 2.07 5.00 5.80 6.25 6.32 6.50 6.89 7.84 8.13

EXCHANGERATE 18IRR/USS, end of periodl 2.07 2.07 2.07 5.10 6.22 6.29 6.35 6.80 7.06 8.12 8.17

1 / Includes Public Enterprise Sectors.

2/ Addis Ababa Retail Price Index until FY97 and national consumer price index thereafter.

3/ Period average wholesale marginal rate.

Sources: MEDAC, MOF, N8E and CSA.

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