Ethiopia - Public Finance Review

Abstract

The 2009 Public Finance Review (PFR) has three chapters. The first deals with broad public finance topics such as aggregate fiscal management, efficient allocation of public spending, revenue performance, and trends and usage of external aid. The second chapter deals with how inflation affects the government budget. Inflation has sharply increased the cost of creating and maintaining public infrastructure and delivering public services, however, most people seem to be unaware of its true cost. By estimating the cost of inflation on the budget, the report hopes to raise awareness about debilitating effects of high inflation on development through its effect on the public exchequer. Finally, the third chapter scrutinizes various financing modalities in the rural water supply to find which one has been most effective and sustainable in the Ethiopian context.