House of Federation to revise regional budget subsidy allocation formula
Addis Abeba –The House of Federation has announced a plan to revise the regional state budget allocation formula based on empirical data.
During its first regular session of the fourth working year, held on 08 October, 2024, the House of Federation approved a plan presented by the Standing Committee on Budget Subsidies and Shared Revenues for the current fiscal year.
The Speaker of the House of Federation, Agegnehu Teshager, outlined the plan, which includes provisions for adjusting budget subsidies to regional states and shared revenues.
Agegnehu emphasized the intent to revise the regional budget allocation formula based on data-driven analysis.
The Speaker further indicated that extensive discussions on this matter would be conducted involving the Ministry of Finance, the Statistics Service, and other pertinent stakeholders.
Moreover, he mentioned that regions, including Sidama, Southwest Ethiopia, South Ethiopia, and Central Ethiopia, have been instructed to organize their respective data for this purpose.
A July 2024 report by Addis Standard highlighted concerns raised by Ethiopian lawmakers during a June 2024 parliamentary session regarding the newly established regions’ challenges in meeting employee salary obligations.
Minister Ahmed Shide responded by clarifying that the three new regions, formed from the Southern Nations, Nationalities, and Peoples’ Region (SNNPR), had received their proportionate share of the SNNPR’s budget subsidy at the time of the regional division.
Regarding the future allocation of funds, Minister Ahmed explained that the newly established regions would temporarily divide the budget allocated to the former SNNPR among themselves based on the existing budget formula until the House of Federation promulgates a new budget allocation formula. AS
