The Primacy of Domestic Resource Mobilization in Ethiopia
The publication “The Primacy of Domestic Resource Mobilization in Ethiopia” delves into Ethiopia's steadfast belief in the power of domestic revenues as the cornerstone for sustainable development and the realization of the Sustainable Development Goals (SDGs). At the heart of Ethiopia’s fiscal policy lies a robust commitment to bolstering domestic revenue streams, ensuring the judicious allocation and utilization of resources, and upholding a fiscal deficit in harmony with macroeconomic aims. Despite a number of challenges, including the COVID-19 pandemic and internal conflicts, Ethiopia experienced strong economic growth, underpinned by a focus on Domestic Revenue Mobilization (DRM) reforms aimed at fortifying tax administration.
The country worked on initiatives including granting autonomy to the Ethiopian Revenue and Customs Authority, digitizing revenue collection through innovative platforms, and recalibrating Value Added Tax (VAT) policies. In parallel, Ethiopia has also revolutionized its budgetary expenditure management, introducing mechanisms like the Integrated Financial Management Information system and digital payment platforms for government procurement. These transformations highlight the country's drive towards transparent and efficient public spending. The publication also outlines challenges that impede revenue generation, such as tax law enforcement inefficiencies, unchecked tax incentives, and logistical shortcomings. With a clear-eyed recognition of the work that lies ahead, the country remains unwavering in its pursuit of continuous tax policy reforms, tailored to its unique economic landscape.