The road sector continues to enjoy the largest share of the budget from the Addis Ababa City Administration. For almost five years now, the sector has been allotted a large amount of money, surpassing investments in other sectors.
The road sector took the lion’s share of this fiscal year’s budget, with 5.5 billion Br out of the total 35.4 billion Br budget. The figure, though large, has seen a decline in comparison with the previous two fiscal years’ budget for roads – 5.7 billion and 5.8 billion Br.
The city’s budget, which comes after the city endorsed a new master plan, focuses on mass transportation schemes, housing and socio-economic development, and industrialisation, with the road sector getting the biggest portion.
For the last five consecutive years, the city has allocated 1.4 billion, 1.5 billion, 3.9 billion, 5.7 billion and 5.8 billion Br on road projects.
The city has been heavily investing in its road networks over the last six years, with coverage of the city reportedly reaching 22.16pc during the recently concluded fiscal year.
Established 18 years ago, the Addis Ababa City Roads Authority (AACRA) has been the custodian of the city’s drive to improve its road networks. The Authority is responsible for 16pc of the city’s current road coverage.
The city currently has a road network of 5,915km, which grew from 2014/15’s 5,365km. Large investments have resulted in pushing the proportion of asphalt roads to 44pc in the last fiscal year, with 2,616km.
“The road sector is among the top priorities of the budget and so takes a huge sum,” Belete Moges, policy study and analysis sub-process owner at the Addis Abeba Bureau of Finance and Economic Development (AAB0FED), told Fortune.
In the current fiscal year, the city government has allocated 15.5pc of its budget to road infrastructure development.
Though the road sector boasts the biggest share of the budget, it is very closely followed by the budget allocated for water and sewerage development. In 2016/17, 15.4pc of the budget is allocated to the development of water infrastructure, which is 22.7pc higher in comparison to the previous fiscal year.
Housing stands in third position, taking 1.6 billion Br of the budget – 11pc lower than the previous fiscal year.
The city’s economy is growing at a rate greater than the national average of around 10pc. Over the last five years, the city’s economy has been growing at 14.5pc. The growth rate is 10 times faster than the rate of neighbouring Kenya’s capital, Nairobi. The three sectors- industry, services and urban agriculture – are behind this steady growth. All three sectors grew by 17pc in the 2014/15 fiscal year.
Driving the city’s investment in infrastructure is its improving capacity to collect taxes. In the 2014/15 fiscal year, the Ethiopian Revenue & Customs Authority’s Addis Abeba Branch collected over 22 billion Br in taxes. Though falling short of its target for the year by two billion birr, it recorded a four billion birr increment compared with the previous year. [Addis Fortune]