By Staff Reporter
October 18, 2018 - Prime Minister Abiy Ahmed today disclosed the government will not increase salaries of civil servants this Ethiopian fiscal year due to recurring budget deficit.
Responding to questions of MPs on Thursday, Abiy said his government has been under extraordinary spending as millions of people were displaced, fleeing violence and conflicts in different parts of the country.
He said the unfolding drought and lower income from taxes have also aggravated government’s inability to raise salaries of the nation’s 1.5 civil servants.
“Civil servants, including the Prime Minister, earn inadequate salaries but security personnel particuraly members of the defence forces receive lower payments.” the premier added.
He said international lenders are also putting another pressure based previous agreement's with the government which had been borrowing lavishly for a long time.
“In a study conducted recently to increase salaries of public servants, three layers of salary scales have been identified and based on the study, the government needs to spend at least 37 billion birr to meet the lower salary scale and 100 billion to attain the higher one,” Abiy explained
According to the premier, inflation has seen a three percent decrease compared to 15 percent six months ago due government’s interventions.
He said government’s intervention also has proven to be successful in boosting foreign currency reserves which grew by 334% over the past few months.
As part of an effort to pay back loans, the government is trying to change what he said “commercial” agreements with lenders into concessional ones which will enable it to repay in longer period of time.
The premier noted that the government will increase salaries of civil servants after it stabilizes the nation’s macro economy and curtail inflation to a single digit.