9 August 2018

Ethiopia, United Kingdom Sign 115 Mln Pound Grant Agreement

ADDIS ABABA- Ethiopia and United Kingdom, have signed a grant agreement worth of 115 million pound through the latter's Department for International Development (DfID) yesterday at the Ministry of Finance and Economic Development.

Penny Mordaunt, MP and Secretary of State for International Development said that 80 million pounds will be used to finance the Ethiopia Jobs Compact program which is expected to create up to 100, 000 job opportunities, including for 30, 000 refugees residing in Ethiopia.

The remaining 35 million pound will be used for Tax Systems Transformation Program for supporting Ethiopia's industrialization strategy to increase economic opportunities for Ethiopians and refugees, strengthening the domestic resource mobilization capacity focusing on increasing tax revenue, improving the business operating environment, ensuring tax does not overburden the poor and improving tax compliance, Mordaunt, who is also Minister for Women and Equalities said.

"Our department is now very focused on economic development, employment opportunities and technical aspects and our ambition is to strengthen infrastructure development," she added.

Abraham Tekeste, minister of Finance and Economic Cooperation for his part said that currently the two countries' relationship is ever increasingly anchored on mutual trust and common interest in development interventions.

There is government endeavors for setting an effective tax system in order to foster and reap the benefits of sustained growth, trade and investment, he said adding, the government of UK has been supporting the modernization effort and reform through various initiatives.

According to him, despite robust economic growth of the country, the share of tax revenue in GDP has not shown significant improvement. Tax revenue has remained low compared to the capacity of the economy.

The program will enable the government to equitably and responsibly reduce compliance and broaden the tax burden. The government will implement the fund for the intended purposes, he said.

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