Ethiopia's Ministry of Finance has presented close to $11 billion national budget for the 2015/16 fiscal year. The budget period runs from July 8, 2015 to July 7, 2016.

The proposed budget is nearly 20 per cent higher than the previous year's.

Out of the total amount, $586 million is planned to be invested in Sustainable Development Goals, which are expected to replace the eight Millennium Development Goals.

Some $4.1 billion will go into capital expenditure and around $2.5 billion will be allocated to recurrent expenditure, according to Finance Minister Sufian Ahmed who presented the proposed budget in the Ethiopian parliament Tuesday.

Agriculture, construction and maintenance of roads, education, water, health, rural electrification, manufacturing, export and urban development, are among the focus areas of the budget.

Nine regional states and two city administrations will receive a total of $3.7 billion as subsidy appropriation.

The government plans to mobilise around $9.6 billion of the total budget from domestic sources, foreign loans and aid. Domestic loans are expected to fill the gap.

“Since the planned domestic loan is only 1.8 per cent of the Gross Domestic Product (GDP), it is in compliance with our monetary policy that aims to stabilise the macro-economy of the country. Hence it is believed that the loan will not have a negative impact on the inflation,” Mr Sufian said.

State projects

Out of the total $9.6 billion expected from domestic sources, finance tax and non-tax incomes cover 80.2 per cent.

Over the past 10 months of the last budget year, the Ethiopian Customs and Revenue Authority has collected close to $4.7 billion from taxes and was expected to hit its target of $5.6 billion in the remaining two months, according to Mr Sufian.

Mr Sufian also noted that the country's tax income was expected to increase by 20 per cent next year from the current 2014/2015 fiscal year.

Around 16 per cent of the total budget was expected from donors and external loans, of which $1.2 billion should be from loans and the remaining $690 million from foreign aid.

The budget, already approved by the Council of Ministers earlier, is expected to be approved by parliament in the coming weeks without significant changes.

Following Mr Sufian's budget speech, some MPs raised concerns related to the delay of some major state projects.

Though Ethiopia has been implementing its five years' Growth and Transformation Plans, which will be concluded this, performance reports of most of the mega projects such as sugar, power and exports, were far from the target.

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Mr Sufian suggested that the government's main focus now would be to address the bottlenecks such as the implementation capacity, slow economic transformation, weakening of export, financial limitations and low level of domestic saving.