A massive 43% budget surge is coming to Ethiopia’s capital. From massive road projects to low-income subsidies, see where Addis Ababa plans to spend 502 billion birr next year.
The Cabinet of the Addis Ababa City Administration has officially approved a historic draft budget of 502.27 billion birr (over half a trillion) for the upcoming 2026/27 fiscal year.
Spearheaded by Mayor Adanech Abebe during the cabinet’s 12th regular meeting, the proposal marks a staggering 43.45% increase—or an additional 152.14 billion birr—over last year’s 350.13 billion birr budget.
The ambitious spending plan has now been forwarded to the City Council for final review.
Where is the Money Going?
The city administration is pivoting heavily toward urban development and social safety nets. Out of the total funds allocated to sub-cities and central sector institutions, a massive 71% (over 356 billion birr) is strictly earmarked for poverty reduction and sustainable development goals (SDGs). The remaining 29% will fund administrative expenses.
According to Mayor Abebe, the city is prioritizing infrastructure that doubles as job creation engines, alongside vital social services:
- Infrastructure & Jobs: Major investments in roads, water infrastructure, housing, public transport, and sanitation.
- Social Safety Nets: Enhanced funding for public education, healthcare, and direct subsidies targeted at low-income residents.
- Emergency Services: Scaling up fire and emergency accident prevention capabilities.
How it Compares: 2025/26 vs. 2026/27
To put this half-trillion birr budget into perspective, look at how the city distributed its 350.13 billion birr budget during the previous fiscal year:
| Expense Category (2025/26) | Allocated Amount |
| Capital Works (Infrastructure) | 246.3 billion birr |
| Regular Expenditures | 91.8 billion birr |
| Contingency Reserve | 12.0 billion birr |
Note: The final structural breakdown of capital vs. regular expenditure for the new 502.27 billion birr budget will be finalized during the upcoming City Council sessions.
Beyond the Budget: 4 Critical City Decisions
Alongside the budget approval, the Cabinet passed decisions on four other major agendas aiming to reshape the city’s operations:
- Boosting Revenue: The cabinet reviewed an independent study analyzing Addis Ababa’s capacity to generate its own revenue, noting that the strategy will expand after consultations with local stakeholders.
- Civil Service Reform: A new draft regulation from the Justice Bureau was reviewed to restructure practical training at the city’s Civil Servants Competency Assessment and Certification Institute.
- Municipal Fees: Officials held extensive discussions on a new draft regulation to enforce municipal holding service fees.
- National Projects: The cabinet evaluated and passed a land allocation proposal specifically reserved for incoming projects of national significance.
