Report No. 20810-ET Ethiopia Public Expenditure Review (In Two Volumes) Volume ll: Appendixes and Statistical Tables August 31, 2000 World Bank Country Office in Ethiopia Country Department 6 Africa Region Document of the World Bank GOVERNMENT FISCAL YEAR July 8 - July 7 CURRENCY EQUIVALENTS Currency 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 Framework ADF African Development Fund MTEF Medium-Term Expenditure Framework ARM Annual Review Meeting MEDAC Ministry of Economic Development and Cooperation BRDM Budget Reform Design Manual MoE Ministry of Education CDF Comprehensive Development Framework MoH Ministry of Health CIDA Canadian International Development Agency MoF Ministry of Finance CSA Central Statistical Authority NBE National Bank of Ethiopia CSR Civil Service Reform NFSP National Food Security Program DFID Department for Intemational Development NGO Non-Governmental Organization DPPC Disaster Preparedness and Prevention Commission O & M Operation and Maintenance EC European Commission OECD Organization for Economic Cooperation and Development EFY Ethiopian Fiscal Year PEM Public Expenditure Management ESRDF Ethiopian Social Rehabilitation and Development Fund PEP Public Expenditure Program EMCP Expenditure Management and Control Program PER Public Expenditure Review ESDP Education Sector Development PFP Policy Framework Paper EU European Union PIP Public Investment Program FIS Financial Information System PMO Prime Minister's Office FY Financial Year PIM Program Implementation Manual FSP Food Security Program PRSP Poverty Reduction Strategy Paper GDP Gross Domestic Product RFB Regional Finance Bureau GNP Gross National Product SDP Sector Development Program GoE Government of Ethiopia SIP Sector Investment Program HICES Household Income, Consumption and Expenditure Survey SNNPR Southern Nations, Nationalities and People's Region HIID Harvard Institute for International Development SPA Special Partnership with Africa IIIPC Highly Indebted Poor Countries TA Technical Assistance HSDP Health Sector Development Program TWG Technical Working Group IDA International Development Association UNDP United Nations Development Program IMF International Monetary Fund USAID United States Agency for International Development IPF Indicative Planning Figure WMS Welfare Monitoring Survey JRM Joint Review Mission WMU Welfare Monitoring Unit Vice President Callisto Madavo Country Director Oey Astra Meesook Sector Manager Frederick Kilby Task Team Leader Duvvuri Subbarao Contents Appendix I ..................................................... 1 RECOMMENDATIONS FROM PREVIOUS PERS ..................................................... 1 STATUS OF RECOMMENDATIONS OF PREVIOUS PERS ......................................................, 9 Reconimendations ..................................................... 9 Status Of Follow-Up .......................................... 10 Appendix 2 ..................................................... 13 EXPENDITURE MANAGEMENT AND CONTROL PROGRAM ..................................................... 13 INTRODUCTION ..................................................... 13 PIP And Medium Term Expenditure Planning ..................................................... 14 Financial Calendar ..................................................... i6 Accounts Project: Cost Centers And Budget Coding ..................................................... 18 Aid Management ...................................................... 19 Outlook And Constraints ..................................................... 19 SELECTED DOCUMENTS ..................................................... 20 Appendix 3 ..................................................... 21 MEDIUM TERM EXPENDITURE PLANNING IN SOUTH AFRICA ..................................................... 21 Origins ..................................................... 21 How It Works ..................................................... 21 Gains From MTEF ..................................................... 22 Critical Success Factors. ..................................................... 23 Appendix 4 ..................................................... 25 ETHIOPIA - FOOD AND FOODGRAIN PRODUCTION 1985-98 ..................................................... 25 Appendix 5 ..................................................... 27 OUTPUT AND OUTCOME INDICATORS IN EHIOPIA ..................................................... 27 Trends In Welfare Indicators From The WMSS ..................................................... 27 WMS Indicators For Education ..................................................... 28 WMS Indicators For Health ...................................................... 29 WMS Indicators For Water Supply ........................................... 30 Outputs/Outcomes Indicators In Key Sectors ..................................................... 30 Education Sector Key Performance Indicators ........................................... 30 Health Sector - Key Performance Indicators .......................................... 33 Roads Sector - Key Indicators .. ........................................ 34 Agriculture And Food Security Program Indicators ........................ ................... 35 Water Sector .......................................... . 37 Appendix 6 .......................................... 39 STATISTICAL APPENDIX TABLE ................... ........................ 39 Appendix Table 1 Fiscal trends, 1986/87 - 1999/00 (in million birr) ......................................... 39 Appendix Table 2 Fiscal trends, 1986/87 - 1999/00 as a percentage of GDP . ............................ 40 Appendix Table 3 Functional classification of general government expenditures (recurrent and capital), 1986/87 - 1999/00 ............................................................... 41 Appendix Table 4 Functional classification of general govermment recurrent expenditures, 1986/87- 1999/00 ................................................................ 42 Appendix Table 5 Functional classification of general government capital expenditures, 1986/87- 1999/00 ................................................................ 43 Appendix Table 6 Economic classification of general government expenditures, 1986/87 - 1999/00 ............................................................... 44 Appendix Table 7 Development in defense expenditure, 1986/87 - 1999/00 . ............................ 45 Appendix Table 8 Real per capital expenditure, 1986/87 - 1999/00 . ......................................... 46 Appendix Table 9 Budget transfers to regions - 1993/94 -1999/00 million birr .......................47 Appendix TablelO General govermnent revenue and external grants, 1986/87 - 1999/00 1/ ( in million birr) .............................................................. 48 Appendix Table 11 General government revenue and extemal grants, 1986/87 - 1999/00 1/ as a percentage of total revenue and extemal grants ...............................49 Appendix Table 12 Functional classification of general govermment recurrent expenditures, 1993/94 - 1999/00 (in million biff) ..... 50 Appendix Table 13 Functional classification of federal govemment recurrent expenditures, 1993/94 - 1999/00 In million birr ........................................51 Appendix Table 14 Functional classification of regional government recurrent expenditures, 1993/94 - 1999/00 (in million birr) ......................................52 Appendix 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 - 1999/00 as 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 - 1999/00 as 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 require all aid funds to be reflected in the Consolidated Fund; for Channel 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 Planningl ExecSum 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 regulations take 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 is move 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 to the proposed fiscal calendar. There also needs to be broad acceptance of the MTEF or PEP as a new way of budget planning. 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 planning and its timely adoption (including discussion at cabinet exercise will be attempted by FYOO/0 1. However, it level), 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 planning figures. [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 the N_MEFF. Ref Recommendation Current Status Comment ExecSum 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 of recurrent 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 and Ti0 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 system on the use of donor funds under the SDPs for education and health. ¶89 It could be helpful to organize a briefing for donors on Civil Done in October 1999 Service Reform and Expenditure Management and Control in particular, and to keep the donors informed on a regular basis. ¶92 Financial Legal Framework: priority should be given to issue the remaining financial directives, in particular those on budget Work to produce the necessary directives is in progress. management including the budget calendar, procedures of budget control, procedures for submission of supplementary appropriation, and calendar for supplementary appropriation. AID AND AID MANAGEMENT PERs 1997 and 1998 PER97 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 the 11.9; donors, including the Bank/Fund HIPC Debt Initiative. border conflict remains unresolved. PER98 128, 13.2 Ref. Recormnendation Current status Comment PER98, 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 Management ExecSum 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 DSA 110; 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 Steering 16; ¶ 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 work observed). 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 the through whichever channel of disbursement, is allocated only to present arrangements of dialogue and consultation. As the priorities defined in the govemnment's strategic planning indicated in chapter 4, MEDAC has made some progress in documents (SDPs, etc). improving aid coordination, but many problems persist. The government is also concerned about the unilateral decision of These issues and donors, 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 the move towards unearmarked channel 1 support. The government channel 1. So far, IDA is the only donor that has started to use problems are further needs to address aid agencies' genuine concerns about channel 1. ADB is currently finalizing a process to shift to the discussed in accountability, 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 in costs in additional administration and delay. working out the modalities has been halted by the border conflict. Ref. Recommendation Current Status Comment ¶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 the coming budget year (i.e. 1993 E.C. budget year) - Included in its agenda the issue of budget offset system and will discuss in depth alternate solutions. Accepted the principle that ongoing projects should be included 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 clearly separated, and it should be clear that aid unutilized in a given budget year will normally remain available in subsequent 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. Regionalization Federal and ReIional Constitutions. Study. Ref. Recormmendation Current Status Comment PER98, 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 the findings of the World Bank's Regionalization Study 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 attempted on 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 Strategic Expenditure Management. 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 level 11.7 (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 been implemented. 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 no p.v; 11.23, expenditure implications. formal re-phasing yet. ¶1.33; PER98 13.24 Ref. Recommendation Current Status Comment PER 1999 177 The government needs to make strategic choices about the sustainability of its expenditure programs [under any scenario] it will be necessary for the government to balance an ambitious SDP implementation schedule with non-SDP expenditures. ¶78 Backload the education and health SDPs and extend the implementation time-frame for the Roads SDP to seven years, to fit 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 to secure an adequate flow of concessional external resources. Ref. Recommendation Current Status Comment FUTURE PERS (a) PER 1999 Exec. 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 budgeting process 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 public expenditures and enhancing the poverty impact of government and donor assistance. * Shift focus of next PER towards effectiveness and -A beginning has been made in this regard under chapter 5 of efficiency 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 the share 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's planned expenditures under the SDPs for health, education, and roads; (ii) the budgetary procedures and institutional arrangements for public expenditure management; (iii) the role of the state vis-a-vis the private sector in service delivery in agriculture, education, health and transport sectors; and (iv) the fiscal impact of the state-owned enterprises. * The PER welcomed the stabilization in recent fiscal trends and the continued reorientation of public expenditures to the priority social sectors. * The impact of the three SIPs on fiscal deficits and the required inter- sectoral expenditure allocation was estimated relatively small and manageable in FY97/98 and -- under favorable growth conditions -- also in FY98/99. However, for FY99/00 and onward, the expenditure implications of the planned SDPs were expected to become challenging for fiscal sustainability. The report explored alternative scenarios to expand the SP implementation paths from 5 years to 7 years to account for potential implementation capacity constraints and possible shortfall in the resource envelope. * The report suggested measures for strengthening the Government's effort to improve public expenditure management within a medium-term expenditure framework (MTEF). A three-year MTEF would become the framework for future budget planning and ensure consistency between SIPs and overall macroeconomic framework. In parallel with the MTEF, the Government would need to develop its own capacity and sector institutions to monitor planning and strategic expenditure management. * With regard to the evolving role of the state, the 1997 PER recommended to center the public sector focus on primary education, quality enhancement in education, and preventive health care. The PER also identified areas for broadening cost recovery in agriculture (irrigation), education (tertiary level), and health (user charges). In addition, the report recommended that regional governments hand over the responsibility for delivery of agricultural credit to appropriate institutions. * The PER recommended that the forthcoming Financial Regulations also clarify the borrowing powers of regional and lower levels of government, as well as the responsibilities for setting local taxes, the mechanism 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 of the multiplicity of donors procedures that are required for releasing the allocated project funds. 2. The 1998 PER examined -- in addition to the review of fiscal trends -- the level and sources of financing for public expenditures in Ethiopia, provided a more detailed analysis of budget management, and updated the fiscal sustainability analysis for key sectors where the Government is implementing SDPs. * With regard to process issues, the report welcomed the significant achievements made with regard to the closure of public accounts and formulation of a the legal framework for expenditure management and control. The PER concluded that (i) scope exists for improving the synchronization and coordination of the work on the MTEF/Public Investment Program and the various SDPs; (ii) adherence to the budget calendar and clarifications in the budget coding system would enhance the transparency and timeliness of budget preparation; and (iii) a review and clarification of the inter-governmental grant scheme and the budget-offset system would improve Federal-Regional fiscal relations. * Second, the report highlighted the immediate necessity of enhancing resource mobilization in the context of tariff liberalization, privatization and decentralization. The report identified a number of measures to help broaden the tax base and enhance collection efficiency and thus increase revenues, including: (i) speedy implementation of the computerized customs reporting and recording system (ASYCUDA); (ii) improvement in tax administration and launch of judicial reforms to address tax collection and streamline tax appeals; and (iii) introduction of tax payer identification numbers in preparation for the expansion of the sales tax into a VAT tax. * The analysis of fiscal sustainability of the public expenditure programs brought the two sides of the fiscal accounts (the level and structure of public revenue generation and expenditures) together and assessed the government's medium-term public expenditure programs. The report highlighted the importance of greater burden sharing of sector expenditures with the private sector, the critical role of tariff reform and export prices for fiscal revenue generation, and the opportunities provided by Ethiopia's participation in the HIPC Debt Initiative. Status Of Follow-Up 3. The Government recognizes the need for strengthening capacity in budget management in parallel with broadening the revenue base. In fact, within the context of the Civil Service Reform (CSR), good progress is under way in a number of areas that were highlighted in previous PERs. 4. Fiscal reforms aim at broadening the tax base, increasing the revenue-to-GDP ratio, improving equity and efficiency and strengthening tax administration. Some of the 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 the Federal Inland Revenue Authority and Customs Office were initiated and the ASYCUDA system was introduced at the main customs station which is now being made operational. In addition to taxpayer identification numbers being introduced, penalties and interest charges were authorized as levy on late tax payments; and the tax fraud unit was expanded. * In FY98/99, as part of the December 1998 tariff reform, the Government identified offsetting sources of domestic revenue to compensate for revenue losses. The implementation of the agricultural income tax reforms and the expansion of the coverage of agricultural land taxes was partially undertaken; the tax net was widened to cover unincorporated firms; the new financial services tax was implemented; and. selected excise taxes and unifying sales and services taxes on most items were reversed. Preparatory work on a value-added tax was also initiated. 11 Appendix 2 EXPEND1TURE MANAGEMENT AND CONTROL PROGRAM INTRODUCTION 1. The Expenditure Management and Control Program (EMCP) is a sub-program of the broad Civil Service Reform which originated with the formation of a special task force in 1994. Substantive work on EMCP began in 1997. EMCP's objectives are to: * Develop a comprehensive and complete legal framework for civil service financial administration. * Introduce a budgetary system which allows informed and rational annual and medium-term resource allocation reflecting government objectives/priorities. * Improve accountability to elected bodies. * Install proper arrangements for the acquisition, safeguard and control of 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 especially relevant to the public expenditure management themes of the PER.2 2. EMCP is being supported with TA from a number of agencies, the most substantial support coming from the DSA (Decentralization Support Activity) which is funded by USAID and implemented by Harvard Institute for International Development (HIID). Reform working groups have been established in the Ministry of Finance and MEDAC, working alongside technical assistance. Starting from a detailed assessment of the current budget and planning processes, the intention is to introduce elemhents of reform sequentially, as each is developed, and to accompany changes to procedures with appropriate training and manuals. The budget reform work accomplished to date is embodied in a series of design manuals. The first one describes processes of capital and recurrent budgeting at Federal and Regional levels and makes recommendations for improvement. The second budget reform design manual was first compiled in 1999 with a revised edition (Version 2.1) in January 2000. It introduces changes in the structure of the budget in five areas: classification, expenditure codes, revenue codes, financial calendar and budget formats. Version 2.2 will be a similar manual but modified for use by Regions and Administrative Councils. Version 3 of the budget reform design manual will deal with organization and staffing of budget institutions and with the monitoring and review of budgets during implementation. Version 4 will deal with aid management, and Version 5 with unit 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 refer to 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 a comprehensive framework for medium-term expenditure planning. It is planned to move from the PIP (which only programs capital expenditures) to a PEP (Public Expenditure Program) which would program both recurrent and capital expenditures, and to extend the activity from federal to regional level. A legal framework has been established: federal financial regulations require the preparation of the PIP and stipulate that the capital budget may only include projects which have been incorporated in the PIP as approved by Council of Ministers and Parliament. Regions have adopted similar financial regulations, but none of them have yet embarked on PIP 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 to individual public bodies are referred to as Indicative Planning Figures - IPFs.). * Preparation of the PIP itself: public bodies are required to program and 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, providing the basis for preparation of the more detailed annual capital budget in the second half of the FY (see the later section on the Financial Calendar). At the federal level, the PIP 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 experienced delays in developing an agreed MEFF; instead of being prepared in advance of the capital budget it ended up as a simultaneous exercise. IPFs were never formally approved, and preparation of the PIP itself was treated as a dry run, in which public bodies' submissions were never reconciled with the estimates of resource availability. The PIP itself, prepared in two volumes in both English and Amharic, was never submitted for cabinet or parliamentary approval, and did not circulate beyond MEDAC. 14 6. A review of 'lessons learned' was also prepared after the first cycle.3 Along with various technical recommendations, the key observation was that the PIP exercise requires high level ownership and support if it is to become an effective part of the financial planning cycle. However, the second cycle - preparation of the EFY 1992-94 version - also failed to move beyond being a shadow exercise. Against the background of the increased impact of the border conflict on public finances, and a resulting increase in uncertainty, the MEFF once again remained a technical exercise that 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 by the technical work, have still not been addressed. (Most notably the first PIP exercise had demonstrated that proposed expenditures on the Road Sector Development Program are not consistent with the Government's own forecasts of resource availability.) 7. The EMCP's latest review and planning document4 reiterates what is needed to make the MEFF/PIP an effective exercise: * There is also need for review of the PIP by the higher levels of Government to be formalized and to ensure that an approved PIP forms the basis of the capital budget. Until public bodies see that the PIP is accorded to a level of importance commensurate with the capital budget, they are unlikely to take the exercise seriously (p33). • There is need to start preparation of the MEFF for EFY 1994-96 before the end of EFY 1992 to ensure that it can be approved and the IPFs are issued to Federal public bodies by the end of September 2000 (Meskerem 1993) (p3 1). Forecasts as input into the Macroeconomic and Fiscal Framework for 1994-96 will start in May 2000 to enable the MEFF to be completed and approved in accordance with the Financial Calendar (p27). * For the PIP process to really become established, however, it will require formal recognition at the senior-most levels of government of the importance the PIP as a planning and programming tool for improving economic and financial management. The MEFF and the investment programs prepared by the public bodies in accordance with the Indicative Planning Figures that are provided to them require review and approval by senior policy bodies if federal public bodies are to take the exercise seriously (p33). 8. The PIP thus far only covers federal projects. However, calculating the funds available for federal capital expenditure requires projections of federal recurrent spending and of the federal transfer to the Regions. Preparation of PIPs at Regional level would require the federal Government to give the Regions forward projections of their expenditure ceilings and anticipated Federal subsidy. A review of the scope for PIP preparation at Regional level has been completed for Oromiya, and similar reviews for a number of other regions are under way. 3MEDAC: Lessons Learned from Preparation of the 1991-93 Public Investment Program, November 1998. 4 Civil Service Reform Program: Expenditure Management and Control Component - Performance for FYl991/ 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 planning and budgeting and to clarify the responsibilities for each stage (see Tables 1 and 2 below5). The first half of each FY is for strategic expenditure planning; so that the detailed budgeting in the second half can reflect strategic expenditure priorities. Better coordination of recurrent and capital budgets will be promoted by the introduction of a joint budget call and a common deadline for the two budgets. Better integration of recurrent and capital budgets will also be facilitated by the approach to cost centers and common budget codes described in the next section. Table 1: The Financial Calendar CYCLE/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 15 2. 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 20 B. 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 7 C. 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 15 Hamle 9 - Hamle 30 July 16 - August 6 13. 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 Responsibilities CYCLE/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 MEFF which should set overall expenditure targets and provide IPFs for preparation of the federal budget, the PIP which sets out a three year federal capital expenditure program in detail, and the annual fiscal plan. The fiscal plan should update the first year's projections of the MEFF, set definite ceilings for Federal recurrent and capital expenditure and also establish the amounts of subsidy to be provided to the regions and administrative councils. 11. Timeliness of the Fiscal Plan is vital if regions are to base their budget preparation on accurate estimates of resources available. The coordination of MEFF and Fiscal Plan is an area of concern: logically both should be prepared by the same team; the division of responsibilities between MoF and MEDAC should not be as sharp as Table 2 seems to imply. 12. As indicated in the review of the PIP, the government has not yet succeeded in adhering to the discipline of the financial calendar. 17 Accounts Project: Cost Centers And Budget Coding 13. The Civil Service Reform strategy of budget reform is to move from an emphasis on control using line item budgets to an emphasis on management using cost center budgets. Cost centers are defined in terms of responsibilities, and may exist at different levels of aggregation. Cost center budgeting will require public bodies to map their budget to organizational sub-units (sub-agencies) and activities (programs, sub-programs, projects). Cost centers should thus allow public bodies to know the total cost of an activity and make budgeting decisions accordingly. 14. This approach is intended to address several weaknesses of the existing budget structure: * The division between the recurrent and capital budgets will be bridged by providing total costs for sub-agencies and projects. By using standard budget categories and by standardizing the codes for these categories in both the recurrent and capital budgets, the two budgets can be linked. * Allocation of expenditures to recurrent or capital budgets would be rationalized: 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 - the balance between capital, non-wage recurrent and wage recurrent expenditures. Cost center budgeting will require that all three types of expenditure are budgeted together, even if they are placed in different budgets. This will also promote the development and application of budget norms that can promote better expenditure composition. * Mapping the budget to cost centers will also encourage public bodies to reassess their organization. Alignment of budgets and responsibilities should promote more decentralized and accountable expenditure management. 15. The reforms to the budget structure are intended to complement the more strategic approach to expenditure planning reflected in the PIP/MEFF and the proposed financial calendar. Annual budgets are to be linked to rolling three-year expenditure plans, and the reform also aim to improve the links between capital and recurrent budgets. The current status of the reform is reflected in Version 2.1 of the Budget Reform Design Manual, which incorporates changes based on workshops and discussion of the earlier version at both federal and regional levels; it also addresses revenue, which was not originally included. A detailed revision of the Chart of Accounts is spelt out. Government has agreed to implement the budget reform at the federal level for the preparation of the EFY 1993 budget, with pilots in the Ministry of Education, the Ministry of Health and the Ethiopian Roads Authority. 18 Aid Management 16. Aid management is to be the focus of the fourth version of the Budget Reform Design Manual. However, activities already under way involve aid management reform in a number of respects: * Legislation has set stringent standards for the incorporation of aid in the budget. * An interim accounting system for tracking donor funds in channel 1 has been introduced. * The new chart of accounts incorporates improved budget coding to strengthen the ability to track funds from different donor sources. * In connection with PIP work, consolidated projections of aid disbursements are now being prepared, and it is planned to develop a comprehensive database on aid. Outlook And Constraints 17. Full implementation of the reforms will take many years. Institutional development of this type is inherently long-term, and constraints experienced by EMCP have included shortages of manpower (with staff having to divide their time between operational duties and developmental work and training), delays in posting of TA, and the addition of unanticipated tasks (notably the interim reporting system for the Sector Development Programs). For some elements of EMCP donor support is still not confirmed. Cascading the reforms from federal to regional level is also a time-consuming process. One practical problem is that translation of materials into the regional working languages (Amharic, Oromifa and Tigrinya) is essential for involvement and training of staff at zonal level and below, but has been found to take a year or more for major documents. 19 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, October 1998 (2 Volumes). Assessment if the Applicability of the Federal PIP Format to the Oromia Regional State, PIP Design Team, MEDAC, August 1998. Description of the Ethiopian Government Accounting System: Accounting Cycles and Processes, draft, prepared by the Civil Service Reform Accounts Design Team from the Ministry of Finance, 28 September 1998. MEDAC: Lessons Learned from Preparation of the 1991-93 Public Investment Progran, November 1998. A guideline for the low of Credit and Development Assistance, Accounting, Recording and Report Submission Procedure, MoF, January 1999. [translated from Amharic by Michael Translation Office]. MEDAC: Briefing Materials: Workshops for Federal Public Bodies on the Preparation 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 (updated December 29, 1999). Budget Reform Design Manual, Version 2.1, Chart of Accounts, Budget Preparation and Presentation for the Federal Government, January 24, 2000. 20 Appendix 3 MEDIUM TERM EXPENDITURE PLANNING IN SOUTH AFRICA6 Origins 1. The post-apartheid government inherited a set of fragmented, non-transparent budgeting 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, unclear political mandates, conflicting priorities, poor planning and management and an unstable process. There were significant variations between planned and actual spending, considerable inter-governmental tension and delivery disruption. 2. A first, unsuccessful, attempt to establish a medium-term framework involved a separate spreadsheet model that was operated from the Treasury in isolation from the real budget process and departments. It was technical, complex and included sectoral analysis and the identification of cost drivers. Although it was approved by the Cabinet, it never gained a real foothold in the process and was ineffective in improving budgeting decisions. 3. A comprehensive multi-tier medium-term budgeting system was inaugurated in November 1997 with the publication of a medium-term budget policy statement which set out the policy framework and medium-term fiscal framework for the February budget. In February 1998 the national and provincial budgets for the 1998/99 spending year were published with forward spending plans for the two outer years, 1999/2000 and 2000/200 4. Although the forward plans were, at first, quite crude, the MTEF initiated a system of rolling three year budgets backed by a single consolidated national and provincial budget process. This process, part and parcel of the MTEF, provides the bridge between the technical preparation of budgets and the need to reflect national political priorities in national and provincial expenditure plans. This process also provides the tools to manage the intergovernmental tensions and trade-offs inherent in any system of fiscal federalism. How It Works 5. The medium-term expenditure framework is the result of the annual MTEF process that starts with the indicative allocations for the upcoming fiscal year, based on projections of spending in the previous year's MTEF. Expenditure ceilings over the medium-term are set at appropriate levels within a medium-term framework of projected revenue, expenditure and borrowing agreed by the national cabinet. During the drafting process these ceilings change on the basis of negotiations between the center and line agencies, new priorities, extra or less money available because of adjustments to the medium-term framework or functional shifts between spending agencies. Provincial and national departments assign resources within their expenditure ceilings in line with policy priorities and submit a three year forward 6The assistance of Alta Folscher of Idasa, Cape Town in preparing this appendix is gratefully acknowledged. 21 spending plans to their treasuries. Medium term expenditure committees, one for national and the other for the provinces, evaluate whether departments' spending plans are economical, efficient, equitable and effective and compile expenditure proposals for the national and provincial cabinets respectively, consistent with available resources. 6. A set of sectoral review teams operates at the heart of the process to identify main budget trends for a particular sector, identify policy options contributing to rising spending pressures and the possibility of expenditure reductions and prepare recommendations for improved expenditure management, possible reallocation and policy changes. The MTEF Review Teams bring together national and provincial treasury and line department officials. The team reports are a key input into the decision-making process at all levels. 7. The MTEF operates against a backdrop of commitment to transparency and public 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-cycle bargaining of public sector wages and unfunded policy mandates cause problems; planning, implementation and control capacity, especially at the provincial level, is often lacking; and weak information on the outputs and outcomes of spending remains a problem. Frequent media reports of service delivery failures in provinces are still present and parliament and other stakeholders still play a very limited and ineffective role in the budget process. 9. However, the following gains can already be attributed to the integration of medium-term economic and policy planning processes with budgeting and budget management through the MTEF. a Stable environment: The MTEF promotes macro stability and predictability of funding, policy; and increasingly of delivery. * Improved political involvement: The MTEF process integrates decisions across spheres and arms of governments, across sectors, across the government functions of policy making and budgeting and between elected office bearers and public officials. It improved Cupertino and consensus within government * Improved policy and planning environment: The MTEF process promotes contestability of policy and spending; policy co-ordination; and linking policy, spending and delivery. As departments are required to frame their policy proposals within their three-year allocations, the MTEF introduced resource-based planning and therefore a better understanding of priorities and costs. The MTEF provides a context for assessing proposals. * Greater transparency: The MTEF produces more reliable and more timely information, more frequently. It provides a forward view of government's plans and therefore presents an opportunity for parliament and civil society to analyze and discuss the expenditure 22 projections and to ensure that alternative views are fully taken into account in framing the subsequent MTEF. The medium-term policy statement, published three months before the national budget, facilitates informed public debate on the forthcoming budget during the 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 political leadership came from the Minister of Finance, backed by a strong central agency, the Department of Finance. * Simplicity: The MTEF runs on a simple framework of integrated three year spending plans. Changes are made to annual baselines on a rolling basis. The published MTEF consists of a single page per department added to the existing budget formats detailing spending over three years per program and per economic classification of spending. The macro-economic assumptions (GDP and inflation) and fiscal targets (deficit as a percent of budget and GDP, revenue as a percent of GDP and expenditure as a percent of GDP) are also published linked to the framework. * Comprehensive implementation: The MTEF was not piloted in one or two departments, or in a province, but implemented comprehensively. This enables the integrated assessment of spending plans and integrated resource-based policy development. * Making it matter: The MTEF did not run parallel to an existing budget process, but was made the only budget process. If spending agencies wanted to access budget allocations, they had to engage with the MTEF process and they had to produce three year spending plans. Secondly, the treasury sticks to the allocations provided for in the MTEF. This forces spending agencies to take their own MTEF planning seriously. Simply put, if it is not in the MTEF, it will not happen. Conversely, the national and provincial treasuries delivered predictable funding. Putting this simply, if it is in the MTEF, it will happen. Thirdly, the central agencies kept strict expenditure discipline, forcing spending agencies to make their own trade-offs. Finally, the robust financial management legislation supports and depends on the MTEF. Individual accounting officers are to be held accountable for monies allocated to them in accordance with the MTEF, for example. Similarly other public sector management systems, such as the human resource system and the civil service regulations, use the MTEF as a framework for planning and control. * Demonstrating quick wins: Apart from the operational enforcement of MTEF discipline, acceptance of the system was enhanced by a rapid turnaround in provincial finances. The ability of the executive to spread the pain of lower than expected economic 23 growth in the 1998-2000 period over the medium-term rather than absorb it in one year with severe spending disruptions, also engendered support for the system. * Good budget support and new systems: The MTEF was implemented in an environment characterized by poor information and weak capacity at all levels. The central treasury provided budget support in a focused program on provincial level, building capacity. Simultaneously considerable effort was also expended to establish new management information systems. As these are coming on line the effectiveness of the budget system is enhanced. • A living process: At the time of its implementation the MTEF was far from perfect. It operated on poor information; low planning, implementation and control capacity and weak intergovernmental coordination of policy planning. The second year saw the addition of sectoral review teams to improve policy coordination, the third year saw the addition of financial management legislation etc. The treasury has not hesitated to change the process if required. Future plans include extensive personnel management reforms in line with the MTEF, clearer linkages of service delivery information and financial data, better investment planning and a more comprehensive assessment of wider public sector fiscal activities. Most importantly, it is to be doubted if these developments would have come about without the MTEF and accompanying medium-term budget process demanding them. 11. In conclusion, the South Africa's Medium Term Expenditure Framework enables the co-existence of a sound budget framework and medium-term decentralized planning. It promotes fiscal discipline while balancing priorities and competition for funds. It encourages management capacity and forward planning within a regulated framework. 24 Appendix 4 ETHIOPIA - FooD AND FOODGRAIN PRODUCTION 1985-98 Year Food aid Foodgrain production Food aid as proportion ('000 metric tons) ('000 metric tons) of production (%) 1985 1,272 4,855 26.2 1986 926 5,404 17.1 1987 277 6,684 4.1 1988 1,096 6,902 15.9 1989 461 6,676 6.9 1990 657 6,579 10.0 1991 925 7,078 12.0 1992 840 7,055 11.9 1993 519 7,619 6.8 1994 980 6,945 14.1 1995 683 7,492 9.1 1996 351 10,328 3.2 1997 387 10,437 3.7 1998 475 8,100 5.9 Total 9,849 102,154 9.6 25 Appendix 5 OuTPUT AND OUTcoME INDICATORS IN EHIoPiA 1. The Ethiopian Welfare Monitoring System (WMS) covers a number of important elements of welfare. The WMS was established in 1996, at the same time as the Ethiopian Social Rehabilitation and Development Fund (ESRDF). At the heart of the system is the Welfare Monitoring Unit (WMU) in MEDAC, responsible for coordinating the overall implementation of the program and for preparing reports to inform policy makers on the state of poverty in the country. The other key institution is the Central Statistical Authority (CSA) which is implementing a prograrn of annual household surveys. The WMU oversees data collection done by the CSA at the household 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 household survey data collection program. Between 1996-1998, the CSA has conducted one household income and expenditure survey (HICES) for 1995/96 and three annual welfare monitoring surveys (WMS1, WMS2, WMS3) (a second income and expenditure survey with a WMS4 is currently under way). The WMSs have covered 12,000 to 15,000 households and data can be disaggregated by regions and groups of zones. 7 3. The first national workshop on welfare monitoring, which was organized by the WMU and CSA in October 29-30, 1999, demonstrated that many of the building blocks for the national welfare monitoring system at the household level are now in place 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 still falls short of serving its true purpose as a tool for monitoring the welfare impact of different 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 over time 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 in urban areas and almost 20 percent in rural areas), but female literacy rate stagnated or dropped in both rural and urban areas. * Primary school enrollment increased substantially, both for boys and girls, but drop-out rates increased as well in both rural and urban areas. * Longer-term malnutrition (stunting) declined, especially in urban areas, but short-term malnutrition increased. 7 Two research projects carried out by Addis Ababa University collected panel data on smaller samples of households, and two participatory poverty studies were carried out in 1997 and 1999 with support from the World Bank. 27 * The percentage of people reporting an illness over the last two months increased, with rural people more likely than urban people to report a health problem. * Distance to health centers (shorter in urban areas as expected) did not change much. * High cost and too great a distance are increasingly cited as reasons for not using health services, while poor quality is losing importance as a reason. * Childhood immunization coverage (much greater in urban areas) is improving. * Use of drinking water from protected sources increased, but the spread of public/private tap water stagnated. WMS Indicators For Education 5. Literacy Rate (percentage of total population aged 10 years and above) 1996 1997 1998 Country 25.8 24.8 26.6 Female 16.9 16.5 17.2 Male 34.8 33.4 36.4 Urban 65.7 70.0 69.0 Female 56.7 60.8 59.0 Male 77.5 81.0 81.0 Rural 18.3 16.2 18.8 Female 8.4 7.3 8.8 Male 27.9 25.1 28.8 a. Primary gross school enrollment ratio 1996 1997 1998 Country 37.4 46.0 52.3 Female 29.4 35.1 40.7 Male 44.9 56.5 Urban 102.1 107.8 109.7 Female 107.1 107.3 105.4 Male 97.4 108.4 114.6 Rural 27.6 37.0 44.3 Female 17.5 24.1 31.0 Male 37.0 49.4 56.8 b. Primary drop-out rates 1996 1997 1998 Country 13.3 19.6 16.2 Urban 6.1 6.0 6.2 Rural 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. 28 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 4.0 Urban 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 Sex 1996 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 27.1 Rural 18.8 22.0 36.4 b. Access to health services (percentage distribution of households by distance in kilometer to the nearest health service) 1996 1997 1998 0 - 4 kms. Country 36.2 37.4 37.5 Urban 95.0 92.3 98.1 Rural 25.7 28.1 27.5 5-9 kms. Country 30.3 31.1 29.3 Urban 4.8 6.6 1.65 Rural 34.9 35.3 33.9 29 c. Reasons for not using the nearest health services (percentage distribution of households) ________ ease Too Distant Poor Service u 1996 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 3.38 Urban 23.70 17.98 21.38 3.60 10.24 5.13 20.10 7.63 7.71 Rural 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 of drinking water) Country Urban Rural 1996 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 49.5 Protected 5.5 7.1 10.2 6.4 6.2 10.6 5.3 7.2 10.1 well/spring Unprotected 19.0 19.6 28.2 5.0 5.5 4.1 21.5 22.0 32.2 well/spring Public 11.4 12.3 10.8 51.4 58.6 54.1 4.2 4.5 3.6 tap/bono l l _ I Own tap 2.2 2.7 2.7 14.3 18.5 18.8 0.1 0.0 0.0 Others 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 been used in the three sector development programs currently under implementation: the health sector and the education sector development programs, which follow one approach to impact monitoring, and the roads sector development program, which follows 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 and outputs/outcomes (access, quality and equity) of the education system in Ethiopia. The indicators have performance targets for the year 2001/02 (the first year of implementation being 1996/97). There were no annual targets set but they are gradually being developed. The regions also have similar indicators included in the Regional Sector Programs and have 5 year targets for each. 30 Education Sector - Key Performance Indicators 1 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 % Verificatio Source Budget and Expenditure 1 Education share oftotalbudget PAP 15.1/13.7 14.6 14.1 15.3 19 RFB/MoF 2 Primary education share of total education budget PAP 63.2/46.7 53.7 65 RFB/MoF A Public expenditure on pilmary % GDP Center 5 YP 4.6 B Introduce tertiary cost sharing Center 5 YP Access 3 Total number of prinmary schools PAP/EMIS 9670 10394 10752 11051 12595 EMIS/REB 4 Total primary (grade 1-8) enrohnents PAP/ EMIS/ C5YP 3787919 4468294 5090670 5702233 7000000 EMIS/REB C GERPrimaryl-8 EMIS/C5YP 30.1 34.7 41.8 45.8 50 EMIS D New schools owned by non GoE Center 5 YP 5 E Ratio of female teachers Center 5 YP 25 35 Quality 5 Share of lower primary (1-4) teachers qualified PAP/ EMIS 85 91.3 95 EMIS/ REB 6 Total number of upper primary (5-8) teachers PAP/ EMITS 27381 NYA 36777 EMIS/ REB 7 Number qualified upper primary teachers PAP 5729 20000 EMS/REB 8 Totalnumberofsecondaryteachers PAP/EENMS 12143 12329 13078 17463 EMS/REB 9 Number of qualified secondary teachers PAP/ EMIS 4910 5054 10760 EMIS/REB 10 Number core primary textbooks in schools PAP NYA 51000 EMIS/REB 11 Grade 8 exam pass rate PAP 61.7 80 NOE 12 Grade 4 sample assessment of learning achievement PAP NOE F Student textbook ratio - primary EMICS C5YP 5:1 NYA 1:1 EMIS G Average PTR Center 5 YP 50:1 Efficiency 13 Primary school student: section ratio PAP/ EMIS 53 60 63 50 EMIS/REB 14 Secondary school student: section ratio PAP/ EM[S 63 68 71 50 EMIS/REB 15 Grade I dropout PAP/ EMITS 28.5 28.8 27 14.2 EMIS/REB 16 Total prinary school dropout PAP/ EMIS 8.5 12 4.2 EMIS/REB 17 Averagegrade4-8repetitionrate PAP 12.8 12.1 6.4 EMIS/REB 18 Average grade 4 - 8 repetition rate for girls PAP 16.2 8.1 EMIS/REB 19 Coefficient of primary school efficiency PAP/ C5YP/ EfMS 49.6/60 45.5 39.8 80 EMJS/REB Equity 20 Gross primary enrolment rate in the two most under PAP/ C5YP/ EMIS 7.6/16.2 7.8 25 EMIS/REB served areas 21 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 remained unchanged; 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 textbooks in schools, the ratio of female teachers and Grade 8 exam pass rates (for boys and girls) are not generally available for all the regions. 12. The 1999 JRM Report indicates that in the last two years, while the overall actual education expenditure per capita has remained relatively stable (around 22 Birr) the actual recurrent expenditure per child has declined nationally from 181 Birr per 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 by 1999, it declined to 173 Birr per child (nominal figures).8 A parallel trend of low capital budget utilization appears to have taken place (but assessments by the JRM and the MoF differ on this matter): in 1997/98 the utilization rate was 56.5 percent for all regions, varying from 96 percent in Dire Dawa to 19 percent in Gambella; in 1998/99, the overall utilization seems to have declined to 49.2 percent (95 percent in Harar to 4 percent in Tigray). 13. A tentative conclusion concerning the link between expenditure and results in the education sector can be suggested. The reduction in the overall recurrent expenditure per child certainly had an impact on non-wage resources available for school materials, maintenance and other operating costs, and the decline in non-wage spending may be linked to the negative trends in a number of indicators. For example, the studies above indicate that school materials have an impact both on the retention of girls (and by extension of all students) and on the success rates in examinations, that is the overall 'quality of learning'. If there are fewer school materials available, then one would expect a decrease in quality of education, and this appears to be the case. Similarly, output indicators show an increasing trend in overall enrolment but with increased class sizes, increased numbers of pupils per teacher and greater repetition and drop out rates. 14. In looking at the detailed regional and federal plans, and the last JRM report, the following five ESDP indicators could be used in any reformed budget and expenditure monitoring 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; 8ESDP/JRM 1999, Draft Report, Annex 5 Tables 5 & 6 9 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 only becomes clear over time and there may be years in which there are anomalies due to sudden 'shocks'. Due caution is therefore warranted and knee jerk reactions to resource allocation have to be avoided. The use of indicators should not lead to change in allocations within/between sectors on an annual basis. Indeed the trends in indicators over time are likely to be more important than their absolute value at any given time. Health Sector - Key Performance Indicators 16. The Health Sector Development Program (HSDP) uses exactly the same governance modalities as the ESDP - with a JRM, an ARM and a common Central Joint Steering Committee - but uses considerably more performance indicators than the ESDP. However, the last Joint Review Mission was unable to obtain reliable figures for many of these performance indicators. 17. Selection of national level indicators and the collection of data to show progress has not yet taken place as systematically for the health sector as for the education sector. The second Health Sector Joint Review Mission noted that this needs to be done and should be a focus of the next review. The present situation - more than fifty indicators for only a few of which data are available - does not allow for good monitoring 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 annual Welfare Monitoring Survey (trends over 1996/98, see above). 19. In general, the resources going to the health sector have been considerably less than 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, while actual spending for 1988/89 was 12.3 Birr. The budgeted spending for 1999/00 is 12.9 Birr. Further research is needed to assess whether there is, in fact, a link between the 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 annual publication "Health and Health Related Indicators" and the report of the last JRM for the health sector, the following five indicators could be appropriately used in a reformed 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 the three sector programs. In structure it is very different from the other two SDPs as it mainly consists of the financing of large road works and imposes relatively smaller demands by way of recurrent budget requirements.10 Fifteen national indicators have been identified in the context of the RSDP. Based on the necessary baseline data for these indicators collected for 1996/97, the overall progress in the roads sector is being monitored on an annual basis. Roads Sector - Baseline Indicators (Year 1996/97) Road indicator Value/index Road density per 1000 km2 Kms - Total 22.8 - Trunk roads 7.5 - Major link roads 6.9 - Regional Roads 8.4 Road 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 55 b. 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 the following: 11 * A slight deterioration of the condition of the road network in Ethiopia; * A minor increase in the road density; and a A marked increase in vehicle kilometers traveled. Based on these findings, it was recommended that maintenance standards be improved to prevent further increase in vehicle operating costs due to a deteriorating road network. 23. From the fifteen indicators identified in the RSDP, and on the basis of the 1998/99 review, the following five indicators could be used in a reformed budgeting and expenditure monitoring system, though this is an area to be further explored: * Road density by type of road, which gives indication of spatial accessibility, * Vehicle kilometers traveled, which links with the expansion of the economy * 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 a facilitator for private sector activities; emphasis has shifted from state-owned production to activities supporting peasant farmers - extension services, seeds and fertilizer. Correspondingly, the share of the agriculture sector in total public spending has 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) number of small farmer using new technology; and (iii) accelerated transfer of new technologies to extension services appear to be suitable for result-oriented monitoring. To give an immediate perception, recent developments in agriculture with respect to the 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 1.98 Pesticide applied 9.45 7.07 9.23 Fertilizer applied 32.69 32.23 34.47 Irrigated 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 Monitoring Indicators, Monitoring Report of the First Year (1998/99); final Report, European Commission/Ethiopian Road Authority, Teferra Mengesha, November 1999. 35 26. At present, there is no ongoing SDP for the agriculture sector, but a National Food 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, which included some outcome/impact indicators and output indicators as shown below. Given the comprehensive nature of food security, several monitoring indicators are wide in scope (health and nutrition indicators, for example). Food Security Program - Outcome/Impact Indicators Indicator Sources Agriculture Annual surveys Farmers use of key inputs Farn surveys Yields of staple food crops Field visits Total production of staple food crops Farmers using modem technologies Use of drought resistant crops Natural Resource Management Annual surveys Soils degradation arrested Field visits Coverage of forest and vegetation area Depth of soil deposited in terraced land Trees planted on trench and gullies will survive Market Development Annual surveys Average time to get produce to market Market surveys Post-harvest losses Field visits Farmers exposed to monthly market information Health And Nutrition Annual surveys Access to clean potable water Household surveys Frequency of health clinic visits Field visits Households using dietary guidelines Off-Farm Income In Project Areas Annual surveys Income from non-farm activities Household surveys Credit allocated to households (Birr) Field visits Women start business Availability and access to credit facilities Off-farm income diversification activities Program Management M&E reports PMU established and operational M&E unit operational 36 Food Security Program - Output Indicators Indicator Sources Farm households reached with TA, and extension package Crop Assessment reports in different sub-sectors Bureau of Agriculture and Natural Resources reports Number of farms with improved access to roads Bureau of Agriculture and Natural Resources reports Monthly dissemination of information on market prices and M&E reports quantities 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 reports Household surveys Small loans extenuated to farn and non-farm households Bureau of Trade, Industry Household reached with targeted training programs and Transport reports Individuals attended literacy training M&E reports Water Sector 27. In the water sector, the absence of a sector development program has been a major impediment for the design, implementation, and sustainable operation of programs. There have been sporadic initiatives to address the different sub components of the water sector. However, a water resources management policy was developed and endorsed by the Government in August 1999. Preparation is underway in the Ministry of Water Resources to develop the Water Sector Development Program. Output and outcome indicators are expected to be set as part of the SDP design. 28. The following were used as output indicators in the ongoing water supply development 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 outcomes of 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 I Appendix 6 Appendix Table 1: Ethiopia - Fiscal Trends, 1986/87-1999/00 million 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 1999/00 Actual 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 55,549.2 Total 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 10,131.0 Tax 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 6,727.0 Non-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 1,643.2 845.6 846.0 Total 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 14,220.5 Of 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 10,578.0 o/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 3,642.5 Ne 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 -4,089.5 ARer 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 -3,243.5 Financing 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 3,243.5 Extrnal 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 1,688.8 Capital 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 1,366.4 CPF 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 97.7 103.6 294.1 598.4 256.8 284.1 341.4 430.9 434.4 591.4 624.2 762.3 Domestic 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 2,317.0 Non-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 0.0 Memo 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 3,642.5 Domestictaury 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 1,813.4 External assistance 172.0 179.0 262.6 496.9 142.8 150.0 495.0 1,062.0 531.0 925.3 462.7 462.7 External 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, 1986/87-1999/00 as 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 -5.8 C> 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. Projections for 1999/00 are as of end of January, 2000. 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 1999/00 Actual Actual Pre. Act. Pre. Act. Actual Pre. Act. Pre. Act. Budget Pre. Act Budget MoF Proj. PER Proj. million birr General 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 4,495 Economnic 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 1,025 Economicservices&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 1,466 Social 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 1,778 Health 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 2,114 o/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 expenditure General 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 31.6 Economic 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 7.2 Economic 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 10.3 Social 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 12.5 Health 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 14.9 o/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 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: 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. 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 4: Functional Classification Of General Government Recurrent Expenditures, 1986/87-1999/00 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.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 5,988 o/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 61 120 150 157 166 180 104 167 146 172 168 168 o/wRoadcomstxuction I/ 46 84 139 80 155 170 91 S8 76 86 84 84 Econonmic services 143 278 496 649 454 481 554 676 632 679 665 665 o/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 1,896 o/wEducation 423 675 1,027 1,287 941 1,026 1,115 1,331 1,240 1,390 1,333 1,333 Health 123 233 351 444 328 332 394 479 456 407 433 433 Others 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 1,167 external 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 10,578 t'.) 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 56.6 o/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 1.6 o/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 6.3 o/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 17.9 o/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 4.1 Others 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 11.0 external 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 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Ministry of Finance, World Bank Database and Projection for 1999/00 by the PER Mission (Febniary 2000). 1/ Road construction under recurrent expenditure includes urban development from 1994/95 onwards. 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 ofend ofJanuary, 2000. Appendix Table 5: Functional Classification Of General Government Capital Expenditures, 1986187-1999/00 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.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. Projections for 1999/00 are as of end of January, 2000. 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 Source: Ministry of Finance, World Bank Database and Projection for 1999/00 by the PER Mission (February 2000). 1/ General Government is Central + Regional Governments. Note: 1999/00 PERprojectionfigures are usedto calculatethe average foryears of 1998/99-1999/00. Projections for 1999/00 are as of end of January, 2000. Appendix Table 7: Development In Defense Expenditure, 1986/87-1999/00 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 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 4,495.2 o/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 100 100 100 100 100 100 100 100 100 100 o/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 ratios Defense expenditure %ofGDP 9.6 2.6 3.1 7.5 2.0 2.0 4.9 6.9 7.6 8.1 Defense expenditure % oftotal expenditure 30.8 11.4 12.0 29.0 7.6 8.3 19.3 26.2 29.8 31.6 Source: 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. Projections for 1999/00 are as of end of January, 2000. Appendix Table 8: Real Per Capita Expenditure, 1986/87-1999/00 Average 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 1999/00 Actual Actual Pre. Act. Pre. Act. Actual Pre. Act. Pre. Act Budget Pre. Act. Budget MoF Proj. PER Proj. Total expenditure Currentprices 103.78 118.20 174.15 217.39 162.13 172.11 187.45 221.66 210.59 241.73 223.80 223.99 Constant 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 expenditure Current prices 31.03 40.78 68.82 63.50 63.16 73.88 69.23 100.14 69.81 71.80 57.37 57.37 Constantprices: 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 expenditure Current prices 9.82 16.16 25.38 27.94 24.52 25.06 26.48 34.02 27.86 30.51 28.01 28.01 Constant 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 sector Current prices 0.94 3.35 7.71 7.38 7.84 7.44 7.87 12.45 7.77 8.61 7.01 7.01 Constantprices: 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 expenditure Currentprices 3.39 5.95 10.40 11.76 8.55 10.27 12.29 18.27 11.94 13.08 11.58 11.59 Constantprices: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 sector Current prices 0.80 1.52 4.37 4.66 2.73 4.57 5.70 10.51 4.55 6.68 4.77 4.77 Constantprices: 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 16.15 Constant 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 sector Current prices 1.86 6.91 14.36 17.70 12.00 12.75 18.13 30.20 20.66 21.84 14.67 14.82 Constant 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 63.49 GDPDeflator(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 3.33 Source: 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 1999/00 Regions 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. 128.8 535 182.3 Afar 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 176.0 Aenara , 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 536.5 Oronia 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: 466.0 146.6 612.6 Somali 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. 81.6 152.8 234.4 Benshangul 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 52.8 120.4 SNNP 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 78.5 440.0 Gambelta 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 97.6 Harai , 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' 0.0 Dire 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 2,475.0 Note: 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 1999/00 Actual 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 6342.7 Direct taxes 947.3 914.6 1842.7 2059.2 1754.0 1904.8 1869.3 2389.4 1989.6 2333.0 2128.8 Income and profit tax 906.0 871.1 1683.4 1892.5 1649.0 1745.4 1655.9 2012.5 1816.2 2049.7 1968.9 Personalincometax 257.9 284.4 379.1 508.9 337.4 366.3 433.6 441.6 496.6 508.2 521.1 Rental income tax 0.0 0.6 8.9 28.8 3.0 8.6 15.2 24.1 15.6 26.7 42.0 Businessprofittax 591.1 540.6 1192.1 1215.4 1222.3 1264.7 1089.4 1418.6 1169.0 1372.6 1261.7 Agneultural income tax 55.5 43.6 95.5 113.4 82.5 102.0 102.0 104.1 111.7 110.5 115.0 Tax on divd.& chance wiming 1.5 1.8 3.4 4.0 3.7 2.3 4.3 5.1 4.0 3.8 4.0 capitalgains 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 97.8 103.9 106.6 108.3 110.0 Urban 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 1393.1 Sales/excise taxes 694.7 654.7 988.4 977.9 955.3 1067.9 942.1 1201.0 916.6 1091.3 1039.2 Servicessales taxes 5.0 41.2 99.0 210.1 76.2 96.9 124.0 212.0 173.0 246.2 247.1 Stampsales&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 2664.9 Cutomsdutyinim.goods 234.0 485.1 989.5 1224.8 889.1 1066.9 1012.4 1236.5 1131.0 1407.1 1318.6 Sales/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 3805.5 Charsgea&fees 29.3 68.7 122.8 168.3 125.3 112.4 130.7 171.8 173.1 165.6 163.5 Saleofgoods&services 44.8 68.6 146.5 313.3 120.5 155.o 164.1 348.6 279.5 355.8 347.1 Governmentimvetmentincome 652.5 673.3 1123.7 1283.5 822.4 1148.5 1400.2 1496.3 1423.0 1144.9 1144.0 Pension contribution 51.6 63.8 87.6 0.0 80.8 85.6 96.5 188.3 Reimbursement&propertysales 54.5 71.5 128.6 126.4 177.2 116.4 92.2 0.0 91.8 161.4 160.9 Miscellaneous 59.1 107.3 408.0 782.6 299.1 330.4 594.7 540.4 665.1 530.9 900.0 Other extaordinary 2/ 137.6 67.9 398.4 355.3 617.6 224.0 353.5 156.6 420.6 432.0 290.0 Privatiation 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 Source: Ministry of Finance, World Bank Database and Projection for 1999/00 by the PER Mission (February 2000). 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. Projections for 1999/00 are as of end of January, 2000. Appendix Table 12: Functional Classification Of General Government Recurrent Expenditures, 1993/94-1999/00 in 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, 1993/94-1999/00 in 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 990.4 1117.1 1207.7 1245.0 2577.0 3871.7 3208.2 4873.4 o/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 95.2 o/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 96.4 124.4 148.5 191.6 165.4 o/wAgricult.&nat.res. 41.2 45.0 53.9 57.7 82.4 90.0 115.1 101.5 Social services 303.2 330.2 267.8 285.6 379.3 393.7 376.2 333.0 o/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 52.5 Others 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 1,418 external 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 7474.5 as a percentage of recurrent expenditure General administration 36.5 36.4 38.8 38.4 60.4 68.3 43.2 65.2 o/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 1.3 o/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 2.2 o/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 4.5 o/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 0.7 Othes 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 19.0 external assistance 2.0 7.0 4.5 7.9 3.7 3.5 10.1 5.0 Total current expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Ministry of Finance. 1/ Road construction under recurrent expenditure includes urban development from 1994/95 onwards. Appendix Table 14: Functional Classification Of Regional Government Recurrent Expenditures, 1993/94-1999/00 in 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 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 Source: Ministry of Finance. 1/ Road construction under recurrent expenditure includes urban development from 1994/95 onwards. Appendix Table 15: Functional Classification Of General Government Capital Expenditures, 1993/94-1999/00 in 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 Economic infrastructure 25.0 29.6 25.1 26.5 31.8 33.8 38.8 33.2 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 Source: Ministry of Finance. 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, 1993/94-1999/00 in 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 1096.0 975.5 o/w Agricult & nat res. 482.1 434.0 367.0 307.0 428.1 609.5 820.3 647.5 Social development 344.5 242.6 362.3 309.4 544.3 602.5 787.2 680.0 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 68.9 122.8 117.1 321.6 216.0 Others 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 as a percentage of capital expenditure Economic ifriastructure 30.4 30.8 24.2 31.3 34.8 38.1 40.6 33.2 o/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 36.6 o/wAgricult&natres. 23.4 19.6 15.6 11.5 17.0 21.1 24.1 24.3 Social development 16.7 11.0 15.4 11.6 21.7 20.8 23.1 25.5 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 8.1 Others 3.0 4.7 4.9 4.8 5.0 4.9 4.1 4.6 Total capital expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 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, 1993/94-1999/00 in 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 o/wRoadconstruction 45.4 238.8 305.4 293.2 435.8 348.5 376.1 319.7 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 Social development 276.4 264.9 349.7 562.8 596.8 429.6 301.7 256.4 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 as a percentage of capital expenditure Economic infrastructure 7.6 26.9 26.7 18.5 27.2 25.2 33.3 33.3 o/wRoadconstruction 7.1 25.3 25.2 17.9 26.7 24.6 32.6 32.6 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 Social development 43.4 28.1 28.9 34.4 36.5 30.4 26.2 26.2 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 Total capital expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Ministry of Finance. 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 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00 Actual Pre. Act. Budget MoF Proj. 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 2128.9 Income 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 42.0 Businessprofittax 557.7 851.5 1222.3 1264.7 1089.4 1169.0 1372.6 1261.7 Agriculturalimcometax 53.6 68.4 82.5 102.0 102.0 111.7 110.5 115.0 Tax on divd.& chance winming 2.6 2.7 3.7 2.3 4.3 4.0 3.8 4.0 Capital 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 97.8 106.6 108.3 110.0 Urban land lease fee 0.0 22.8 27.8 62.8 115.6 66.9 175.0 50.0 Domestic Indirect taxes 834.1 945.4 1155.6 1289.9 1180.9 1192.6 1458.0 1393.1 Sales/excise taxes 710.5 770.8 955.3 1067.9 942.1 916.6 1091.3 1039.2 Servicessalestaxes 44.7 67.7 76.2 96.9 124.0 173.0 246.2 247.1 Stamnpsales&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 2664.9 Customs dutyonim.goods 632.1 747.2 889.1 1066.9 1012.4 1131.0 1407.1 1318.6 Sales/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 3805.5 Charges & fees 59.9 107.6 125.3 112.4 130.7 173.1 165.6 163.5 Sale of goods&services 81.9 104.0 120.5 155.0 164.1 279.5 355.8 347.1 Govenmentinvestmentincome 506.6 1443.0 822.4 1148.5 1400.2 1423.0 1144.9 1144.0 Pension contribution 67.4 75.7 80.8 85.6 96.5 0.0 0.0 0.0 Reimbursement &propertysales 39.7 181.4 177.2 116.4 92.2 91.8 161.4 160.9 Miscellaneous 107.0 122.6 299.1 330.4 594.7 665.1 530.9 900.0 Other extraordinary 1/ 0.0 0.0 617.6 224.0 353.5 420.6 432.0 290.0 Privatization 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 proceeds from sugar auction sales; 1997/98 onwards include fuel stabilization fund. Appendix Table 19: General Government Revenue And External Grants, 1993/94-1999/00 as a percentage of total revenue and grants 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00 Actual Pre. Act. Budget MoF Proj. Tax revenue 62.5 55.1 58.6 57.1 54.4 52.6 56.7 57.7 Direct taxes 19.2 18.6 21.8 20.3 19.3 18.8 19.3 19.4 Income and profit tax 18.3 17.5 20.5 18.6 17.1 17.2 17.0 17.9 Personal incomnetax 5.8 4.4 4.2 3.9 4.5 4.7 4.2 4.7 Rental income tax 0.0 0.0 0.0 0.1 0.2 0.1 0.2 0.4 Businessprofittax 11.3 12.1 15.2 13.5 11.2 11.1 11.4 11.5 Agriculturalincometax 1.1 1.0 1.0 1.1 1.1 1.1 0.9 1.0 Tax on divd.& chance winning 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Capital 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 1.0 Urban land lease fee 0.0 0.3 0.3 0.7 1.2 0.6 1.4 0.5 Domesticindirecttaxes 16.9 13.4 14.3 13.7 12.2 11.3 12.1 12.7 Sales/excise taxes 14.4 10.9 11.8 11.4 9.7 8.7 9.0 9.5 Services sales taxes 0.9 1.0 0.9 1.0 1.3 1.6 2.0 2.2 Stamp 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 24.2 Customs duty on im.goods 12.8 10.6 11.0 11.4 10.5 10.7 11.7 12.0 Sales/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 34.6 Charges & fees 1.2 1.5 1.6 1.2 1.3 1.6 1.4 1.5 Sale of goods & services 1.7 1.5 1.5 1.7 1.7 2.6 2.9 3.2 Govenrnment investrent income 10.3 20.5 10.2 12.2 14.5 13.5 9.5 10.4 Pension contribution 1.4 1.1 1.0 0.9 1.0 0.0 0.0 0.0 Reinbursement & property sales 0.8 2.6 2.2 1.2 1.0 0.9 1.3 1.5 Miscellaneous 2.2 1.7 3.7 3.5 6.1 6.3 4.4 8.2 Other extaordinary 2/ 0.0 0.0 7.7 2.4 3.6 4.0 3.6 2.6 Privatization 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 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Ministry of Finance. 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 20: Federal Government Revenue And External Grants, 1993/94-1999/00 in million birr 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00 Actual Pre. Act. Budget MoF Proj. Tax revenue 2557.3 3226.5 3892.9 4389.5 4186.6 4511.4 5571.6 5255.2 Direct 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 1258.9 Personal 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 22.0 Business profit tax 349.7 616.5 963.5 988.4 813.1 902.9 1055.1 986.7 Agricultural income tax Tax 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 fee Urban land lease fee Domestic indirect taxes 735.6 822.9 948.5 1059.2 951.5 1000.0 1217.7 1175.6 Sales/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 79.5 102.1 149.9 216.5 218.1 Stampsales&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 2664.9 Customsdutyonim.goods 632.1 747.2 889.1 1066.9 1012.4 1131.0 1407.1 1318.6 Sales/excise taxes 618.5 672.9 804.9 958.2 1024.8 1092.2 1477.9 1346.3 (-h Export taxes 46.6 201.5 119.5 138.4 181.2 155.3 163.8 155.9 00 Non-tax revenue 685.9 1799.8 1943.6 2135.4 2631.1 3386.7 3044.9 3296.1 Charges&fees 29.1 61.5 67.9 57.0 80.7 122.4 111.5 111.5 Sale of goods&services 31.0 33.3 36.1 62.8 68.2 183.3 250.0 245.1 Governmentinvestmentincome 505.5 1441.5 821.0 1144.7 1395.2 1404.6 1139.4 1138.8 Pension contribution 23.5 22.4 23.6 24.0 28.0 0.0 Reimbursement&propertysales 39.0 181.2 177.1 116.3 92.0 90.6 161.2 160.7 Miscellaneous 57.8 59.8 200.3 159.7 301.0 365.2 150.9 550.0 Other extraordinary 1/ 0.0 0.0 617.6 224.0 353.5 420.6 432.0 290.0 Privatization 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 Total revenue and grants 4230.4 6158.0 6933.3 8029.0 8090.9 9047.5 10259.7 9396.9 Source: Ministry of Finance. 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, 1993/94-1999/00 as a percentage oftotal revenue and grants 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00 Actual Pre. AcL Budget MoF Proj. Tax revenue 60.5 52.4 56.1 54.7 51.7 49.9 54.3 55.9 Direct taxes 12.4 12.7 16.3 14.5 12.6 12.5 12.7 13.4 Income and profit tax 12.4 12.7 16.3 14.5 12.6 12.5 12.7 13.4 Personal incometax 4.1 2.6 2.4 2.2 2.5 2.5 2.4 2.6 Rental incomne tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 Business profittax 8.3 10.0 13.9 12.3 10.0 10.0 10.3 10.5 Agricultl inconme tax Taxondivd.&chancewinning 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 Capital gains Runl lnd use fee Urban land lease fee Donmestic liredx17.4 13.4 13.7 13.2 11.8 11.1 11.9 12.5 Sales/excisetaxes 15.5 11.3 12.0 11.5 9.9 8.8 9.2 9.6 Savices sales taxes 0.9 0.9 0.8 1.0 1.3 1.7 2.1 2.3 Stampsales&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 28.4 Custosnsdutyon im.goods 14.9 12.1 12.8 13.3 12.5 12.5 13.7 14.0 Sales/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 35.1 Charges & fees 0.7 1.0 1.0 0.7 1.0 1.4 1.1 1.2 Sale ofgoods & services 0.7 0.5 0.5 0.8 0.8 2.0 2.4 2.6 Govemmentinvestnentincomne 11.9 23.4 11.8 14.3 17.2 15.5 11.1 12.1 Pension contribution 0.6 0.4 0.3 0.3 0.3 0.0 0.0 0.0 Reiinbursemnet&propertysales 0.9 2.9 2.6 1.4 1.1 1.0 1.6 1.7 Miscellaneous 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 3.1 Privatization 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 Total revenue and grants 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Ministry of Finance. 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 22: Regional Governments' Revenue And External Grants, 1993/94-1999/00 in million birr 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00 Actual Pre. Act. Budget MoF Proj. Tax revenue 519.2 652.2 830.3 968.6 1082.0 1049.3 1268.2 1087.5 Dlirecttaxes 420.7 529.7 623.2 737.9 852.7 856.7 1027.9 870.0 Income and profit tax 375.1 448.8 518.2 .578.5 639.3 683.3 744.6 710.0 Personal incometax 111.4 144.8 174.0 191.1 234.2 270.8 263.1 275.0 Rental incometax 2.0 0.6 2.7 7.6 14.3 15.4 25.6 20.0 Business profittax 208.0 235.0 258.8 276.3 276.3 266.1 317.4 275.0 Agriculturalincometax 53.6 68.4 82.5 102.0 102.0 111.7 110.5 115.0 Tax on divd.& chance winning 0.1 0.0 0.2 1.0 0.0 Capital gains 1.4 11.5 19.3 28.0 25.0 Rurl land use fee 45.6 58.1 77.2 96.6 97.8 106.6 108.3 110.0 Urban land lease fee 0.0 22.8 27.8 62.8 115.6 66.9 175.0 50.0 Domestic Indirect taxes 98.5 122.5 207.1 230.7 229.4 192.6 240.3 217.5 Sales/excise taxes /i 55.5 73.3 124.6 147.7 142.2 121.4 146.3 136.5 Servicessalestaxes 8.7 10.8 17.5 17.4 21.9 23.1 29.7 29.0 Stamp sales & duty 34.3 38.4 65.0 65.7 65.2 48.1 64.3 52.0 Import duties and taxes Custons duty on im.goods Sales/excise taxes O Export taxes Non-tax revenue 176.6 234.4 299.1 383.8 513.2 466.5 545.6 509.4 Charges&fees 30.8 46.1 57.4 55.3 50.0 50.7 54.1 52.0 Sale of goods & services 50.9 70.6 84.4 92.2 95.9 96.2 105.8 102.0 Goveffmentinvesmnsetincome 1.1 1.4 1.5 3.7 5.0 18.4 5.5 5.2 Pension contribution 43.9 53.3 57.2 61.6 68.5 Re-imbursement & property sales 0.7 0.2 0.1 0.1 0.2 1.2 0.2 0.2 Miscellaneous 49.2 62.8 98.7 170.8 293.7 300.0 380.0 350.0 Other extraordinary Privatization Proceeds Total revenue 695.8 886.6 1129.4 1352.4 1595.2 1515.8 1813.8 1596.9 Source: Ministry of Finance. Appendix Table 23: Regional Governments' Revenue And External Grants, 1993/94-1999/00 as a percentage of total revenue and grants 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 1999/00 Actual Pre. Act. Budget MoF Proj. Tax revenue 74.6 73.6 73.5 71.6 67.8 69.2 69.9 68.1 Direct taxes 60.5 59.7 55.2 54.6 53.5 56.5 56.7 54.5 Income and profit tax 53.9 50.6 45.9 42.8 40.1 45.1 41.0 44.5 Personal incometax 16.0 16.3 15.4 14.1 14.7 17.9 14.5 17.2 Rental 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 6.9 Urban land lease fee 0.0 2.6 2.5 4.6 7.2 4.4 9.6 3.1 Domestic indirect taxes 14.2 13.8 18.3 17.1 14.4 12.7 13.2 13.6 Sales/excisetaxes/I 8.0 8.3 11.0 10.9 8.9 8.0 8.1 8.5 Servicessalestaxes 1.3 1.2 1.5 1.3 1.4 1.5 1.6 1.8 Stamp sales &duty 4.9 4.3 5.8 4.9 4.1 3.2 3.5 3.3 Import duties and taxes Customs duty on im.goods Sales/excise taxes Export taxes Non-tax revenue 25.4 26.4 26.5 28.4 32.2 30.8 30.1 31.9 Charges & fees 4.4 5.2 5.1 4.1 3.1 3.3 3.0 3.3 Sale of goods & services 7.3 8.0 7.5 6.8 6.0 6.3 5.8 6.4 Government investment income 0.2 0.2 0.1 0.3 0.3 1.2 0.3 0.3 Pension cortribution 6.3 6.0 5.1 4.6 4.3 0.0 0.0 0.0 Reimbursement&propertysales 0.1 0.0 0.0 0.0 0.0 0.1 0.0 0.0 Miscellaneous 7.1 7.1 8.7 12.6 18.4 19.8 21.0 21.9 Other extraordinary Privatization Proceeds Total revenue 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Ministry of Finance. Appendix Table 24: Ethiopia: Selected Macroeconomic Indicators in 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 7.5 20 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 ~0 OTHER 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 1999 Fiscal 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 Trade 15- 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 -0.3 5 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 Indicators in bAion bin FY Ending July 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Money Supply MONETARY 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 60 PERCENT 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-6 10- 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.