Ethiopia 2010 federal budget:  Popular resistance educating lawless TPLF the limits of power

1 Sep

By Keffyalew Gebremedhin The Ethiopia Observatory (TEO)

“መለስ ዜናዊ … ‘ክልሎች ቢፈልጉ ገንዘቡን ያቃጥሉት‘ ብሎ ኦዲተር ለማ አርጋው ያዘጋጁትን ኦዲት ሪፖርት አንቋሾ ግለሰቡንም አዋርዶ፡ በጀት እስከዛሬ በአንደኛ ደረጃ ለሕወሃቶች፣ ቀጥሎም ለሙሰኛ ፖለቲከኞች/ትናንሽ ፖለቲካ ካድሬዎች እንደፈለጉ ለፈንጠዝያ እንዲሆን በር መክፈቱና ተጠያቂነትን አሳውሮ መሄዱ የአደባባይ ምሥጢር ነው።”

UNOFFICIAL TRANSLATION

“Meles Zenawi’s statement in parliament … ‘[T]he regions could burn their monies should they so wish’ has gone a long way in destroying official accountability thereby undermining the rule of law in Ethiopia. In disparaging former Auditor-General Lemma Argaw’s audit report, attacking his person in public not only has Meles Zenawi devalued the importance of national budget. But also with that as official authorisation, he has opened the gates of corruption primarily to TPLF bosses, other corrupt politicians and small time political cadres to utilise public funds as their fiesta paycheck.”

ትልቁ የኢትዮጵያ ‘ፌደራል’ በጀት ድክመቱ፣ገጽታዎቹና ውስብስብ ችግሮቹ


As a follow-up to a decision of the Council of Ministers, Finance Minister Abraham Tekeste had not long ago sent out to all federal offices an instruction that seemingly announces the party is over and the hitherto extravagance by TPLF-led Ethiopian offices within the small universe of Ethiopia’s national budget.

Such an instruction, according to The Reporter, came out less than two months after the federal budget was approved. Equally interesting is that the budget was approved less than a month before the draconian state of emergency that subjected Ethiopians to harsh martial law the ruling Tigray People’s Liberation Front (TPLF) had imposed, which was lifted on August 4, 2017 — only theoretically.

The protests were an expression of the opposition by Ethiopians of the boundless corruption of the ruling party and its allies. There are also the violence and misgovernance of the nation under the 26-year rule of the TPLF regime. It is public knowledge that citizens deeply resent the sources of TPLF members’ unearned wealths, first world lifestyles in a rather poor multinational state where dispossession has been a primary feature of life, and thus, the endless political, economic and social problems of the nation.

While on the surface the ten-month old state of emergency is credited to have quietened down the uprisings, the tremors continue to reverberate, certainly disruptively with strikes and tax revolts as their main features.

It is in this situation the finance minister has started instituting ‘responsible use’ of the nation’s budgetary resources for their intended purposes, presumably all federal offices to take cost-cutting measures. At the same time, the regime is blamed on social media by TPLF insiders about wastefulness continuing citing as an example the case of the ETB 26 million earmarked for musical shows on the ten days preceding the Ethiopian New Year.

Incidentally, TPLF regime at the highest level decided ten-day celebrations, governed by daily themes. Its overall theme would be “መጪው ዘመን የኢትዮጵያ ከፍታ ነው” (difficult to put into English, since in Amharic itself it does not make sense the way it is cast. Probably it was coined first in Tigringa tating the coming season is the Ethiopian height, possibly to sort of convey ETHIOPIA RISING).

The ten daily themes are shown hereunder, as decided by the regime itself at the highest level:

    ነሃሴ 26 2009 የፍቅር ቀን (Sept 1 2010፣ Day of Love)
    ነሃሴ 27 2009 የእናቶችና ሕጻናት ቀን(…Mothers & Children’s Day)
    ነሃሴ 28 2009 የአረጋውያን ቀን (…Day of the Elderly)
    ነሃሴ 29 2009 የሰላም ቀን (…Day of Peace)
    ነሃሴ 30 2009 የንባብ ቀን (…Reading Day)
    ጳጉሜ 1 2009 የአረንጓዴ ልማት ቀን (Pagumen 1, Green Day)
    ጳጉሜ 2 2009 መከባበር ቀን (…Day of Mutual Respect)
    ጳጉሜ 3 2009 የሀገር ፍቅር ቀን (…Nation’s Love Day)
    ጳጉሜ 4 2009 የአንድንት ቀን (…Day of National Unity)
    ጳጉሜ 5 2009 የኢትዮጵያ ቀን (…Ethiopia Day)

There is nothing more revealing clearly the sense of rejection by the Ethiopian people of the TPLF administration than the above, which it has been feeling for several years now. Actually, its problem is the fact of it being mixed with guilts of all sorts at this stage, too late as it is.

The TPLF, thus, is trying to either delude Ethiopians once again, or is prostrating itself before them, its suffocation and the sense of its besiegement intolerable. It is like a trapped animal. If you ask me, forgive it now, but it would be back to its default!

Be that as it may for now, oddly enough the minister’s targeted cost-cutting measures seem for effects sake, among others, requesting economy on printer toners, tissue papers, cleaning stuff, notebooks, offers of scholarships and fellowships, purchases of scarves and hats for invited officials and guests to the frequent annual meetings hosted by federal offices under every pretext and the subsequent huge expenditures on foods and liquors, conference halls rentals, party rooms, etc.

In response to questions by parliamentarians during the approval of the budget regarding the country’s poor education quality and programs that are in the budget but never implemented, the finance minister’s response was non-committal, pointing out the institution henceforth of proper follow-up measures.

It is not clear if the minister had his circular in mind or any other, irrespective of which, his response has clearly failed to show he was on the same page as his questioners. Nor did he answer why in the first place budget and programmes are separated, i.e., leading to expenditures without programme delivery, as the Office of the Auditor-General (OFAG) has time and again over the years has brought the problem to the attention of parliament and the executive branch to no avail.

It does not come as surprise, therefore, the OFAG chief argues, there are a good number of offices with accounts that still have not been properly closed, owing to committed obligations and/or expenditures that are not properly settled. The auditor-general in his May 2009 report (2017) notified parliament the troubling extent of public funds that continue to hang in a number of offices remaining outstanding obligations and expenditures his office could hardly do anything about. Such is the magnitude of this problem, no legal entity is willing to take action, about which his report cites some extraordinary examples of violations of the nation’s financial regulations:

“በወቅቱ ያልተወራረደው ተሰብሳቢ ሂሳቡ በዕድሜ ወይም በቆይታ ጊዜው ሲተነተን፤ ከአንድ ወር እስከ አንድ ዓመት ብር 134,153,964.72፤ ከአንድ ዓመት በላይ እስከ አምስት ዓመት ብር 3,174,764,464.42፤ ከአምስት ዓመት በላይ እስከ አሥር ዓመት ብር 372,936,870.76 እና ከአሥር ዓመት በላይ ብር 196,565,227.12 ሲሆን፤ ቀሪው ሂሳብ ብር 1,442,465,210.85 የቆይታ ጊዜውን በግልጽ ለመለየት አልተቻለም፡፡”

Notwithstanding that, this circular now by the finance minister has landed on desks of federal offices, while short in its clarity and objectives, its overriding concern being savings the TPLF potentates are badly in need of and they see as remedial measures to problem(s) they have not fully appreciated nor actions they take are actionable.

For now, the primary goals of the Ministry of Finance and Economic Cooperation (MOFEC) are presumed to be: (a) saving money; (b) without explicit indication to serve as tool in containing corruption — the latest horse the TPLF has started riding in the wake of the protests to calm public anger and disapproval of it; and, (c) political motives coming on the back of the reform of the budget in the context of program budgeting.

Again, if one goes by the interpretation of The Reporter, savings may be the primary objective, as mentioned under (a), above. This writer cannot vouch for any one of them however. MOFEC has not made the document available to the public, save the mentioning of its title on the ministry’s webpage.

Even if one assumes savings is the purpose, it is also weak an argument, since it is unlikely any meaningful savings could be achieved because of this deficient instruction that does not appreciate the complexities of the nation’s political and economic problems.

A simple example of its failure is its lack of appreciation that no federal office would come up with significant savings. Why? When one thinks of how effective an across the board percentage cut could have been — as is done usually in such situations, instead of listing of purchase/expenditure items. In other words, Dr. Tekeste Abraham’s instruction leaves the question of what level of cuts are to be made to the discretion of each federal office.

In the circumstances, if that is the purpose of this exercise, it is my honest contention that not much should be expected out of it. This is simply because the way MOFEC has gone about it is unenforceable in many respects.

After all, serious nations know very well that budget implementing offices are never known to have good discretion on anything that tells them to cut their budgets; they are incapable of unbiased judgement.

Especially in Ethiopia, this is very typical under the TPLF potentates that have been drilled with their self-importance and primacy of their self-interests — not primacy of the collective, i.e., the nation and its people.
 

Why is the approved budget back on the drawing board less than two months after its approval?

For the Ethiopian fiscal year 2010, which began on July 8, 2017, the sum of ETB 320.8 billion ($14 billion) has been approved for fiscal year 2017-2018 fiscal year budget — hereafter referred to as 2010 budget in line with Ethiopian fiscal calendar. One of the concerns of the finance minister during his presentation to parliament of the proposed programme budget was sufficiency of present level of tax and other state revenues.

At the same time, this is the largest budget the finance minister has chaperoned effortlessly through a legislative body 100 percent hand-picked members of his TPLF ruling party and loyalists. Unfortunately, as deficient representation of the people, such parliament cannot be expected to serve the public interest. That is shown by the fact that the minister was hardly asked the tough questions for some of his ‘un-budget’-like proposals and the assumptions thereon.

Noticeable in those latter categories include the senseless inflation parameter during the budget implementation year, as the already high price hike consumers complain about has shown even before the fiscal year has begun in earnest.

As I recently stated elsewhere, even if the TPLF constantly sanitises data, it has hardly managed to disguise this facts about inflation. For instance, in April food inflation was 12.2 percent, until it crawled in May to 12.3 percent, In June, it retreated to 12.2%!

The inadequacy of state revenue, about which the finance minister severely complained, is another problem, which largely is political, especially how the state sought to solve it with violence against those complaining about the high increases, instead of engaging them in discussions.

Failure to anticipate this is a problem underlying the budget preparations, especially the simmering public anger against the regime’s corruption, its bad governance of the country, an early recognition of it could have saved the nation, which still has not found resolution. If I could foresee it, the state ought too. For the details, please refer to my analysis of the proposed programme budget, i.e., before it was approved, wherein I had noted about the societal distrust in the TPLF regime, as follows:

“…የዘንድሮውን ረቂቅ በጀት ለየት የሚያደርገው መንግሥታዊ ገቢ (State Revenue) ክፉኛ ባሽቆለቆለበት ሁኔታ ብቻ ሣይሆን: በሕዝባዊ አመጽ ማግሥትና ቀጣዩ አቅጣጫ የማይታወቅበት ወቅት መዘጋጀቱ ነው። በአንድ በኩል — ይህንን በቁጥር አስደግፎ መናገር ባይቻልም — ከተነሳው ሕዝባዊ ተቃውሞ አንጻር ሕወሃትና ተባባሪዎቹ በግፍ አያሌ ዜጎቻችን መጨፍጨፋቸውን ግንዛቤ ውስጥ ያስገባ በጀት ነው ቢባል ማገነን አይሆንም። ልቡ ያመረረ፣ ክፉኛ ሲፈራ የነበረ ሕዝብ ለአስተዳደሩ ድጋፉን መንሣቱን የሚያሳይ ለመሆኑ አንዳንድ ምልክቶች ይታያሉ።

ያ ሕዝባዊ አመጽ ባይከሰት እንኳ፡ ሕወሃቶች እያሳዩ ባሉት ‘የማን አለብን’ ባህሪ ምክንያት፡ ሕወሃት እየሠራበት ያለው ሌሎች ኢትዮጵያውያንን ሁለተኛ ዜጎች የማድረጉ ዓላማ ድምጽ የለሽ ሕዝባዊ አጸፋ እያጋጠመው ነው። ይህና የጥቂቶች ብቻ በዕድገቱ ተጠቃሚ መሆን፡ ሕዝቡ ይህን ሁኔታ እንዳላማቸው ይዘው ለተነሱት ያለውን ጥላቻ በማጠናከር ውስጥ ለውስጥ ውድቀታቸውን መሻቱ ታይቶ በማይታወቅ ደረጃ ለመንግሥታዊ ገቢ መቀነስ በምክንያትነት ሊቀመጥ ይችላል። ከላይ እንዳልኩት ይህንን በቁጥር መበታተን አስቸጋሪ ነው። ነገር ግን በንግድ ዙርያ ያሉትን ውዝግቦችና የ Value Added Tax ሁኔታ [ጭምር] መመልከት ይቻላል።!

ተሻሻለ ሲባል በግብርና ታክስ ክፍያ ላይ እንደሚታየው የአስተዳደሩ ገቢ ማዝቀጥ — ሕዝቡ ባመቸው መንገድ ሕወሃትን ገቢ ለመንፈግ የተቻለውን እንደሚሞክር ያሳያል። በዲያስፖራ በኩልም ይህንን ተመሳሳይ ሁኔታ አይተናል። ብሔራዊ ባንክ ባለፈው ሁለተኛው የሩብ ዓመት ሪፖርት ውስጥ እንደዘገበው — የ14.8% በውጭ ምንዛሪ ቅናሽ (Net private transfers — መንግሥታዊ ያልሆኑ ድርጅቶችን 55.7% ቅናሽ ሳይጨምር) መፈጠሩ ዶላር በቀጥታ በባንኮች ባለመላክ የተፈጠረ ሁኔታ ጭምር መሆኑን ማንም አይስተውም።

በሌላ በኩል ደግሞ፥ አስተዳደሩ ተደፈርኩ የሚለው ስሜት በአማጺው ሕዝብ በኩል እንዳይፈጠር፡ የሕዝቡ ተቃውሞ ኤኮኖሚው ላይ ተጽዕኖ አላሳደረም ብሎ ደጋግሞ ቢከራከርም፡ የቱሪስቶች ወደ ኢትዮጵያ ላለመምጣት መወሰናቸው ኤኮኖሚውን ብሎም የሕወሃትን የውጭ ምንዛሪ አቋም ክፉኛ ሰለመታው፣ የውጭ ግዥውን ማዳከም ብቻ ሳይሆን፡ የዓለም ኤኮኖሚ መዳከምና የሃገር ውስጥ የማምረት አቅም መዳከም ጋር ተዳምሮ የምንዛሪ ካዝናውን አራቁቶታል።

በታሪክ እንደምናየው ከሆነ፣ አንድ ሕዝብ በላቀ መጠን የግብርና የታክስ ክፍያውን ከቀኑ መንግሥት ሲይዝ፡ በሕዝብና በመንግሥት መካከል መተማመን የመሟጠጥ ምልክት መሆኑን ሕውሃትም እንደሚያምን አልጠራጠርም። ልዩነቱ ግን ሕወሃት ችግሩንና ስህተቱን ተገንዝቦ ያርማል ወይንስ ተጻራሪ ብሎ የሚገምታቸውን ወንጀለኛ አድርጎ ትጥቅ ይዞ ስለተነሳ ችግሩን የፈታ ይመስለዋል ላይ ነው!”

 

Conclusion

It is possible inadequacy of state revenue may have compelled the administration and the finance minister to instruct all federal offices (not sure if this is inclusive of the security & defense bodies) to indicate by early September their ‘plan of action’ reflecting the obligatory savings from their respective allocations under the current budget, the allocation of which was sent out less than two months ago.

I am not party to the official perspective on the internal situation of the nation and their plan. However, in the face of the pervasive Ethiopian uncertainty, it is reasonable to assume going forward that the savings may be required, not for economic growth and improving the lives of citizens, but to cover the rising/expanding costs of the security institutions, their personnel in constant deployment to quell the anger against the TPLF regime.

True, Ethiopia’s tax burden disproportionately on small proportion of the population, the tax base being the narrowest even by Sub-Saharan Africa’s standard. If the regime’s problem is financing its programs, including the security apparatuses, it ought to tax the well to do, instead of persecuting and manhandling small entrepreneurs.

What raises doubts about the intentions of the regime is in 2009, according to an August 22 the Ethiopian Revenues and Customs Authority (ERCA) report, it has collected ETB 135.5 billion birr for 2016/17, which was about 22% less than its target.

Assuming that the regime was truthful in achieving that level of collection, especially relative to any one previous fiscal period, on one hand its noise and the consequent the revenue shudder and on the other its heavy-handed response is unexplainable, unless it is a tightly-kept TPLF secret the treasury at present is empty, coming as it does out of the 2016 popular protests and ten months of the state of emergency from October 2016 to August 2017.

What is troubling is the fact that the regime has been aware about 40 percent of new taxes levied on small businesses is guesswork and wrong, according to the prime minister. Why all this heavy-handedness then?

Why should tax protests, the return of businesses licences and joining businesspersons strikes against TPLF regime’s onerous tax burden be wrong, when citizens cannot be listened as they seek solutions from the state?
 

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