Ethiopian Finance Minister Ahmed Shide told lawmakers on Tuesday, June 11th that the economy is expected to grow by 9% in 2019-2020 and that there are plans to increase spending in one of the fastest growing economies in Africa, Reuters has reported.
The draft budget gives an insight for investors keen to gain a foothold in Ethiopia, whose population makes it the continent’s second largest market.
Ahmed proposed government spending of 386.9 billion birr ($13.48 billion) for the fiscal year 2019-2020, which if approved will be 12% higher than 2018-2019’s 346.9-billion-birr figure.
Lawmakers from the ruling coalition, which controls parliament, are expected to approve the plans in the next few weeks.
William Davison, a senior analyst at Brussel’s-based Crisis Group said the growth targets were ambitious. The International Monetary Fund predicted in April that the Ethiopian economy would grow by 7.7% in 2019.
“This projection appears to be based on factors such as positive investor sentiment amid a more pro-business regulatory environment, which the authorities clearly hope will counteract reduced spending on infrastructure, a recent key growth driver,” he told Reuters.