The Sole opposition member, Girma shared his skeptical views of the Government ‘s competence to Fortune.
Girma seifu, lone opposition member of parliament (Medrek) weighs the budget for the 2011/12 fiscal year , the rising inflation, a possible further devaluation of the birr, and the 12 month performance of the government ambitious Growth and transportation plan (GTP) . In an exclusive interview with fortune editor in chief, Samson Haileuesis.
Question: you have stated that the 117.8 billion Br Budget for the coming fiscal year is not significant compared to the just ended fiscal year despite an increase of 40% billion Br, why is that?
Girma: the difference lies in the face that the purchasing power of the Birr has declined. In an opinion, the increase in broad money does not bring about any fiscal change. Take for example, last year’s budget, which was around 6.4 billion dollar and compared in to the approved budget for the 2011/12 , it would be around seven billion dollars. The difference is about 500 million dollars. That is too small for the nation. If you want to go further and see what the per capital growth is , all you have to do is divide it with the population of 80 million . It comes 6.5 dollars, and that is insignificant.
Q: Are you saying that the budget should have significantly increased?
I am not saying that, but the case is that we should take the budget into perspective. Budgets should increase from year to year. What would be surprising would be if the budget was lower than the previous year. There are a number of factors that could cause the increase in budget .
A10 pc increment in the budget would mean that the nation is trying to cope with inflation. This would not mean a significant increase in budget due to inflation , and the Birr devaluation. But, from the Ethiopian context, having a budget increase of 40 % , would be explained as an attempt to close the gap brought about by inflation. That, I believe, is the root of the budget increase.
Other highlights of the interview
• Sofian Ahmed, Minster of Finance and economic development, during his report on the budget, 2011/12, said that there is room for devaluation the Birr a further five pc without affecting the Birr’s purchasing power……..for the benefit of Ethiopia’s export competitiveness etc …….. But According to Girma, if this argument was true, Eritrea and Somali would have a ‘growing economy’ as well
Girma still continues his argument, What more important is a strong economic competitiveness. If we say we are in the right path, then we should buy items at the right price. “There is no such thing as equal devaluation”.
China and Ethiopia devaluation strategy should be looked differently. China has a lot to export and can promote competitiveness in its part. What peculiar value-added export products do we have?
• Political motives drive the budget, not economic motives. For example, Girma [ the chair person of the budget committee………] donot know, what has been budgeted for the rail way sector expansion, to renaissance dam..The budget allocation for education is not cleared and properly monitored, according to Girma.
• The GTP and the budget don’t coincide together. The GTP out lined as a big moves a cement factory, a rail way sector, coal explorations, and a plan of metal industry, which are not at all included in the budget.
• Even Sofian(the MoFED) and the prime Minster don’t speak the same strategy in front of the parliament. Sofian declared that 15 billion Br. Budget earmarked to meet the millennium development goal, was for the regions’ The Prime Minster on contrary negated Sofian’s point, and declared that, the budget was not the regions’ but belongs to the Federal government.
• Talking about the inflation Girma donot liked government move. The price cap has caused more harm than good. It has eroded business confidence. If the business community told to sell on the price set by the government , at the end they will not avail those items to the market.
Quote of the day,[in relation to the interview]
“EPRDF is on it’s ‘job on training’/governance/ program for the GTP. Why don’t our executive bodies take further education as Birtukan, Siye and Lidetu are doing prior to their governance incompetence” One Neo-liberalist
For Full coverage of the interview, follow the link: