The amount of money the federal government is spending on the road construction sector is growing considerably, with the Ethiopian Roads Authority (ERA) projecting an expenditure of 8.8 billion Br during the 2007/2008 fiscal year. The Authority hopes that the federal government would cover close to 73pc of the total spending. This is almost twice the amount of the budget ERA has during the current fiscal year.
 

ERA is planning to finance the construction of 172 roads to be undertaken during the next budget year close to 83 of them require the repairing and upgrading of existing roads, building 26 new roads, as well as construction of two major bridges on the rivers of Omo and Gibe. Paying for new designs of 30 existing and 17 new roads is incorporated in the budget.
 

Some of the roads to be built during this period include a second road between Addis Abeba and Adama (Nazareth) at a cost of 230 million Br, and from Jimma to Mizan, at a cost of nearly 200 million Br. Upgrading the road from Addis-Debre Brehan-Tarmaber, at a projected cost of 130.6 million Br, is planned for the fiscal year.
 

ERA is the lead agency of the federal government responsible to see the successful accomplishment of the 10-year road sector development programme began in 1997. The programme has two phases where the first was completed in 2002, with the Authority claiming a success rate of 88pc of its target. This is the final year of the programme; and the total size of the road network in the country has reached over 40,000Km. This has helped the country narrow the average distance to road networks from 21.4Km in 1997 to 14Km in 2006.
 

The federal government has paid a high price to achieve this. Although 9.5 billion Br was budgeted for the first four years of the second programme, the Authority ended up spending close to 12 billion Br. The latest budget request made to the Ministry of Finance and Economic Development (MoFED) is double what the government was prepared to avail during the next fiscal year, according to sources at the Ministry.
 

“We’re amazed at ERA’s request,” an official from the Ministry told Fortune.
 

MoFED had given ERA a three billion Birr ceiling for the fund it could expect from the federal treasury. The 3.4 billion Br extra was not what it had in mind.
 

In addition to the 6.4 billion Br that it is expecting from the government, ERA plans to receive 879.6 million Br in aid from Ethiopia’s development partners and 1.5 billion in loans. The Authority needs to acquire one billion of the total 8.8 billion Br in dollars.
 

Sources at MoFED told Fortune Sufian Ahmed, minister of Finance and Economic Development, has plans to meet members of ERA’s top management before a decision is to be made.
 

ERA’s largest budget request to date would give it a high share of the total budget of the federal government.
 

“This would create budgetary imbalance with so much allocated to a single institution,” said a macroeconomic expert.
 

Such unexpected pressure on the federal budget will not be new. The Authority had requested, in a letter to the Ministry dated February 7, 2007, for a 1.5 billion Br budgetary supplement. This was something that was not expected by Ministry officials, according to the source. MoFED had the Authority’s and other public enterprises nine-month performance audited by its auditors, who recommended that ERA be granted half a billion Birr in supplementary budget, a third of what it has requested. The fund is expected to be disbursed before the end of this month.
 

Next to the national defence, ERA received the largest share of the federal budget for 2006/2007, taking 2.6 billion Br of the total 35 billion Br. The Ministry of Education (MoE)received 2.4 billion Br and the Ethiopian Electric Power Corporation (EEPCo) 1.2 billion Br, respectively.
 

“ERA will probably end up geting the most of any agency again for the next budget year,” said the expert. “This should not be surprising considering that this government focuses so much on infrastructural investments.”