Housing development, road construction and water
supply, the three areas Addis Abeba’s city
government says are its top priorities, remain
dominant in this year’s budget. Plans for brand new
mega projects have been incorporated into the city’s
draft plan for the coming fiscal year.
The agencies responsible for implementing the
proposal–the Housing Development Project Office, the
City Roads Authority (AACRA) and the Water and
Sewerage Authority (AAWSA) – are also the ones
taking the largest slice of the draft budget pie for
the next Ethiopian fiscal year which starts this
week. Jointly, the agencies, take approximately half
of the 6.6 billion Birr proposed budget. The budget,
authored by the City’s Finance and Economic
Development Bureau, is to be debated by the City
According to the draft plan document authored by the
Performance Supervision Department under the Mayor’s
Office, the Housing Development Project Office plans
to construct 29,250 new houses, including 2,044 in
Lideta District under its Local Development Plan
(LDP) pilot project.
The administration under Mayor Kuma Demeksa intends
to spend 236 million Br to develop the Lideta area
neighbourhood and to finance the construction of
2,044 condominium houses designed to accommodate
middle class families.
When the plan becomes a reality, the city government
will develop a 25hct plot on Tesema Aba Kemaw
Street; an area otherwise known as Goma Kuteba,
and another 25hct of land behind Hotel De’
The construction of 21,446 regular condominium
houses and finalization of an additional 20,750
houses, began during the previous fiscal year and
are 20pc complete, are also part of the plan for the
The office plans to procure 500,000tns of cement
from both local and foreign companies and to import
40,200tns of reinforcement bars into the country for
Historically, condominium construction has struggled
to meet expectations. In 2005, Arkebe Oqubay’s
Provisional Administration planned to construct
50,000 houses within three consecutive years
spending 1.5 billion Br. This period was considered
a boom period of construction, especially for condos
in Addis and major regional towns.
Arkebe’s administration actually only managed to
construct 9,958 houses at a cost of 302.6 million Br
during the 2005/06 fiscal year. This occurred
despite technical assistance from the Deutsche
Gesellschaft fur Technische Zusmmenarbeit (GTZ), a
German technical cooperation agency.
That same year, construction of 30,719 houses was
launched by the administration. However, over half
of the plan was not completed, according to annual
report for the year.
The Caretaker Administration of Berhane Deressa,
which was in office for two years, planned to build
19,361 houses during their first six months in
office. However, the administration was able to
complete only 6,766.
The incumbent administration under Kuma approved an
8.7 billion Br budget for the previous fiscal year.
However, it slashed the 5.5 billion Br budget
request from the Housing Development Project Office
to 2.5 billion Br.
The project office sought to build 55,000
condominium houses during the 2008/09 fiscal year
but was told by the City Council to complete 33,000
condos remaining from the previous administration.
Along with the Project Office, the two major
infrastructure development agencies – the Addis
Abeba Water and Sewerage Authority (AAWSA) and the
Addis Abeba City Roads Authority (AACRA) – also have
ambitious plans this fiscal year.
The Performance Supervision Department compiles the
activities required to implement the plans submitted
by each of the agencies as it has to compact and
organize the plan for discussions by the City
The AACRA has proposed constructing 71.6Km of new
asphalt roads; 10Km of detour roads and upgrading
14Km of existing roads.
It also plans to undertake design works primarily
for a 9.1Km road, (stretching from Tor Hailoch to
Adwa Square) and a 27Km road (from Shiromeda via the
Long Distance Bus Terminal, Merkato [Abenet] to
Meskel Square and then to Kality). These projects
are continuations of projects the Authority is
working on as part of a goal to achieve a city-wide
network of roads.
The City Government of Addis Abeba hopes to expand
road networks from, the current seven per cent, to
12.8pc by 2011, according to its five-year strategic
For the 2008/2009 budget year, AACRA plans to
increase the road coverage from 2,537km to 2,657Km.
Kuma’s administration has allocated 1.6 billion Br
for the Authority.
AACRA’s plan for the next year also includes the
construction of five bridges.
However, the Roads Authority is currently revising
its plans. The revision is expected to be finalized
within this week, according to Fekade Haile (Eng.),
general manager of AACRA.
“After the revision, the budget we will request may
go down from what we have already requested in our
earlier budget request,” he told Fortune.
The other priorities of the administration down the
list are the six key areas: capacity building;
housing development; potable water supply; expanding
small-scale enterprises; road construction; as well
as the expansion of social services like health and
education,” Fekade said.
Addis Abeba, one of the two chartered
administrations in the country (the other being
Dire Dawa) is not a beneficiary from the Federal
Government’s 20.9 billion Br budget subsidies to
The city has to finance itself from its own
revenues. The Finance and Economic Development
Bureau is in charge of these assignments. The City
Cabinet discussed the budget weeks after the
Minister of Finance and Economic Development (MoFED)
Sufian Ahmed announced federal government’s proposed
54.6 billion Br budget.
The city’s proposed budget is morethan eight times
smaller than the Federal Government has proposed to
spend during the same period.
Out of the total 6.6 billion Br, 70pc (4.62 billion
Br) would go to capital spending and 30pc to
recurrent budget; an amount reserved to pay
operational costs and salaries.
The Housing Project Office will take the highest
amount of the proposed budget for the next fiscal
year, although it is requesting even more than its
upper limit of 1.2 billion Br.
AACRA plans to spend 3.8 billion Br, according to
the draft plan. Of this, 3.3 billion Br is to be
spent on projects to be undertaken by contractors
while half a billion Br is slated for projects it
will construct independently.
This fiscal year, AACRA plans to undertake a 43
construction projects, creating new roads and
upgrading existing roads; 28 of them will be
undertaken by the Authority itself.
Eight of the road construction projects the
Authority planned to finalize during the previous
fiscal year are being transferred to this fiscal
year. These include major facelift work on the road
running from Meskel Square to the Bole Bulbula
Bridge near the Airport section of the Ring Road.
The Addis Ababa City Water and Sewerage Authority
hopes to enhance its capacity to deliver potable
water and to increase the supply from the current
68pc to 85pc during the coming fiscal year.
The activities scheduled on the draft plan document
include construction of 43 shallow wells with a
capacity to generate 60 litres of water per second.
In addition, 39 similar wells are also part of the
plan. The Authority would also connect the five
shallow wells whose construction has already been
finalized to the water distribution system of the
The Legedady Water Refinery Station is also expected
to be finalized within the coming two years and
would generate an additional 30,000 Cubic metres of
water daily. This will allow an additional 272,727
beneficiaries to utilize potable water.
The Authority plans to conclude the ongoing water
projects in Burayu, and Gelan towns, under the newly
established Special Zone of the Oromia Regional
State, which consists of eight towns encircling the
city and six weredas. New water projects would also
be constructed in the localities at the vicinity of
the city which includes the Akaki area and Sebeta
Addis Abeba’s water supply institution has been
working with the Oromia Regional State Water Bureau
to supply water for the towns around the city, the
water supplied to Addis is either sourced or flows
through these towns.
However, after the eight towns around the city
formed a special zone, the zone and AAWSA began
working on a proposal to use the water supply
facilities to serve both the city and the respective
town of the special zone.
Just two months ago, the proposal was submitted to
AAWSA. It is expected implement these plans by the
next fiscal year, according to sources in the
authority. The construction of the modern landfill
in Bole Aramsa area is also part of the plan.