Ethiopia Reinforces its PFM Reform Agenda
In Addis Ababa on November 19, 2025, the Ministry of Finance underscored a steadfast national policy: strengthening transparency, accountability, and fiscal governance across the public sector. This renewed pledge comes as part of an ongoing Public Financial Management (PFM) reform program aimed at boosting efficiency, reducing waste, and improving service delivery for Ethiopian citizens.
The Core Pillars: Transparency, Accountability, and Fiscal Governance
The Ministry highlighted three intertwined pillars guiding reforms:
- Transparency: opening budget processes and procurement activities to public scrutiny, improving access to budget data, and promoting clear, timely disclosure of fiscal information.
- Accountability: strengthening oversight mechanisms, performance reporting, and consequence management to ensure public resources are used as intended.
- Fiscal Governance: enhancing revenue administration, expenditure controls, debt management, and macro-fiscal analysis to sustain long-term fiscal stability.
Officials stated that these pillars are not isolated steps but an integrated framework designed to build trust between citizens, lawmakers, and the administration. The approach seeks to align budgetary decisions with national development priorities, including infrastructure, health, education, and social protection programs.
Public Financial Management as a Vehicle for Inclusive Growth
PFM reforms are framed as a conduit for inclusive growth. By modernizing budgeting, financial reporting, and internal control systems, the government aims to:
- Improve the efficiency and effectiveness of public spending
- Strengthen risk management and fraud prevention
- Expand citizen access to reliable fiscal data
- Support evidence-based policymaking through enhanced data analytics
Recent engagements with international partners and development banks have helped Ethiopia advance digitalization of financial processes, automate routine tasks, and standardize reporting formats. This modernization not only reduces delays but also provides a clearer picture of how resources are allocated and utilized at federal, regional, and woreda (district) levels.
Governance, Oversight, and Anti-Corruption Efforts
Strengthening governance remains central to the reform agenda. The Ministry outlined enhanced oversight through independent fiscal councils, audit mechanisms, and transparent procurement practices. Anti-corruption vigilance is being reinforced with whistleblower protections, stronger penalties for misuse of funds, and stricter conflict-of-interest rules for public officials involved in procurement and budgeting processes.
These measures are complemented by capacity-building initiatives across ministries and regional administrations. Training in financial management, auditing, and data reporting is expanding to ensure that regional offices can implement reforms consistently and with accountability.
Citizen-Centric Reporting and Public Engagement
A key element of the reform program is making budgetary information accessible and comprehensible to the public. The Ministry emphasized the importance of user-friendly financial reports, open-data portals, and regular public briefings. By demystifying fiscal data, the government aims to empower citizens to participate in budget debates, monitor project outcomes, and hold authorities accountable for results.
Looking Ahead: Milestones and Collaboration
Authorities indicated a clear roadmap with milestones tied to data quality improvements, timely budget execution updates, and expanded coverage of fiscal indicators. Collaboration with international partners remains critical, not only for technical assistance but also for sharing best practices in public sector reform. The overarching objective is to sustain momentum, scale successful pilots, and institutionalize reforms across all levels of government.
Conclusion
As Ethiopia advances its Public Financial Management reforms, the emphasis on transparency, accountability, and fiscal governance signals a long-term commitment to accountable governance and inclusive development. With ongoing reforms, robust oversight, and citizen engagement, the country aims to improve fiscal outcomes, strengthen public trust, and deliver more effective public services for its people.
