Re: Ethiopia budget 2018 EC
The Federal General-Purpose Grant Distribution Formula (2017/18–2021/22)
The responsibility for deciding the proportion of the general-purpose grant allocation to the regional states
has been constitutionally vested in the House of Federation (HoF) since 1994/95. Federal transfers are
distributed based on the relative fiscal gaps of regional states, and the HoF has adopted a grant allocation
formula to capture the gaps as accurately as possible. The HoF revises the grant allocation formula
periodically, so as to adjust the federal grant allocation to the changes in the socio-economic conditions of
each regional state, and a number of formulae have been developed and used since the country adopted
fiscal federalism.
In 2017, the HoF adopted a revised grant allocation formula (for use in the coming three years) to
accommodate the allocation of federal grants to changes in population size, levels of development, revenue
collection capacities, employment and poverty, among other factors, across regional states. The new
approach to federal transfers is calculated on the basis of representative revenue and expenditure
estimates. In this approach, the revenue-raising capacity is estimated using the representative revenue
system; the expenditure needs are estimated using the representative expenditure system; and the fiscal
gaps are calculated accordingly for each regional state. The grant is therefore distributed based on the
relative fiscal gaps of the regional states.
Though there are different approaches used to estimate the revenue-generating capacities of sub-national
governments, the federal transfer formula of Ethiopia uses the Representative Tax System (RTS) to
estimate the revenue-generating capacities of each region. This system employs the main tax revenue
sources of regional states, including agricultural income tax, land use fee, payroll tax, business income tax,
turnover tax, and value-added tax. The current grant allocation formula considers new developments in tax
rates, particularly for payroll tax. Improvements have also been made to the previous computation method
by using weighted averages, rather than simple average tax rates. Moreover, a new method is followed in
the calculation of business income tax and value added tax, which represents a major departure from the
method used in the previous formula.
According to the new grant allocation formula, the expenditure need of each regional state is calculated by
taking into consideration the unit of measurement (which is different across each expenditure category),
representative expenditure (per unit average expenditure for each expenditure category), and adjustment
index (constructed from factors explaining unit cost differentials across sub-national governments). The
current grant allocation formula employs a regression approach to estimate the adjustment index for each
expenditure category, which was not the case in the previous formula (previously, the adjustment index
was subjectively determined by an expert and then finally settled through consultation with the regional
governments). The expenditure categories incorporated in the calculation include general services and
administration, primary and secondary education, including Technical and Vocational Education and
Training (TVET), public health, agriculture and rural development, drinking water development, rural road
construction and maintenance, urban development, and
The responsibility for deciding the proportion of the general-purpose grant allocation to the regional states
has been constitutionally vested in the House of Federation (HoF) since 1994/95. Federal transfers are
distributed based on the relative fiscal gaps of regional states, and the HoF has adopted a grant allocation
formula to capture the gaps as accurately as possible. The HoF revises the grant allocation formula
periodically, so as to adjust the federal grant allocation to the changes in the socio-economic conditions of
each regional state, and a number of formulae have been developed and used since the country adopted
fiscal federalism.
In 2017, the HoF adopted a revised grant allocation formula (for use in the coming three years) to
accommodate the allocation of federal grants to changes in population size, levels of development, revenue
collection capacities, employment and poverty, among other factors, across regional states. The new
approach to federal transfers is calculated on the basis of representative revenue and expenditure
estimates. In this approach, the revenue-raising capacity is estimated using the representative revenue
system; the expenditure needs are estimated using the representative expenditure system; and the fiscal
gaps are calculated accordingly for each regional state. The grant is therefore distributed based on the
relative fiscal gaps of the regional states.
Though there are different approaches used to estimate the revenue-generating capacities of sub-national
governments, the federal transfer formula of Ethiopia uses the Representative Tax System (RTS) to
estimate the revenue-generating capacities of each region. This system employs the main tax revenue
sources of regional states, including agricultural income tax, land use fee, payroll tax, business income tax,
turnover tax, and value-added tax. The current grant allocation formula considers new developments in tax
rates, particularly for payroll tax. Improvements have also been made to the previous computation method
by using weighted averages, rather than simple average tax rates. Moreover, a new method is followed in
the calculation of business income tax and value added tax, which represents a major departure from the
method used in the previous formula.
According to the new grant allocation formula, the expenditure need of each regional state is calculated by
taking into consideration the unit of measurement (which is different across each expenditure category),
representative expenditure (per unit average expenditure for each expenditure category), and adjustment
index (constructed from factors explaining unit cost differentials across sub-national governments). The
current grant allocation formula employs a regression approach to estimate the adjustment index for each
expenditure category, which was not the case in the previous formula (previously, the adjustment index
was subjectively determined by an expert and then finally settled through consultation with the regional
governments). The expenditure categories incorporated in the calculation include general services and
administration, primary and secondary education, including Technical and Vocational Education and
Training (TVET), public health, agriculture and rural development, drinking water development, rural road
construction and maintenance, urban development, and
Re: Ethiopia budget 2018 EC
Tigray and Central Ethiopia have same budget. Why? Ethiopia 2018 budget $ 1.93 trillion Birr!
Re: Ethiopia budget 2018 EC
Because OLF loves Tigray more than Southern/ Central Ethiopia. Woyane/TPLF is the bed fellow of OLF-PP. It is a political se<xual affairs of OLF-PP and TPLF. Why are you asking this question? 
Huresawit, you know OLF-PP also scre>wed your oldie arse by stashing sacks of hyperinflated paper money
quote=Horus post_id=1587581 time=1761840143 user_id=41933]
Tigray and Central Ethiopia have same budget. Why? Ethiopia 2018 budget $ 1.93 trillion Birr!
[/quote]
Huresawit, you know OLF-PP also scre>wed your oldie arse by stashing sacks of hyperinflated paper money
quote=Horus post_id=1587581 time=1761840143 user_id=41933]
Tigray and Central Ethiopia have same budget. Why? Ethiopia 2018 budget $ 1.93 trillion Birr!
[/quote]
Re: Ethiopia budget 2018 EC
Budget divided by population 2024/2023 = $$$$ per person or capita
Tigrey, $3217per capita
Amara, $2928
Afar, $2833
Oromo, $2384
Gambella, $7974
Benishangul, $4604
Harar, $8453
Somali, $5067
Sidama, $2483
Southwest, $2273
South, $2916
Central, $1759
Tigrey, $3217per capita
Amara, $2928
Afar, $2833
Oromo, $2384
Gambella, $7974
Benishangul, $4604
Harar, $8453
Somali, $5067
Sidama, $2483
Southwest, $2273
South, $2916
Central, $1759