Fiscal federalism in ethnically divided Ethiopia

Ethiopia, one of the most dynamically developing states on the African continent and one with which Russia has a long history of political and economic cooperation, became a BRICS state in 2024. On the political map, Ethiopia stands out for, among other things, its unique model of ethnic federalism. This provides subjects of the federation (regions) with a wide range of rights, including the right to secession. The 1994 Constitution of Ethiopia pays special attention to consolidating the original model of government, built on the principle of national sovereignty, which has obvious ethnic overtones. The Constitution proclaims “nations, nationalities and peoples” to be bearers of state sovereignty and grants them the right to self-determination including secession from the federal state. The constitutional regulation of fiscal federalism in Ethiopia has two successive stages. The first is a general scheme for the division of powers between the federation and its subjects, including in the sphere of economics and finance. Then a separate chapter details the distribution of rights in the fiscal sphere and creates financial guarantees for ethnic federalism. The principle of distribution of powers in the field of taxation between federation and regions, enshrined at the constitutional level, is important for any federal state. For modern Ethiopia, with its original model of ethnic federalism, the study of financial, economic and legal guarantees of decentralized public power is of particular importance. The formula of fiscal federalism enshrined in the 1994 Constitution establishes the exclusive powers of the federation and of the regions as well as their joint powers in the field of taxation. In addition, there is a procedure for the use of so-called unspecified powers, according to which both houses of the Ethiopian parliament acquire the right to adjust the formula of fiscal federalism in the event of the introduction of new taxes and fiscal regimes. The simultaneous presence of both centrifugal and centripetal tendencies in the state and political life of Ethiopia requires additional guarantees for the uninterrupted functioning of fiscal federalism. One such guarantee could be the application of preliminary constitutional control to decision-making procedures for the distribution of public finances.

About the author: Alexandr Kozyrin – Doctor of Sciences in Law, Professor, Administrative and Financial Law Department, RUDN University, Moscow.

Citation: Kozyrin A. (2024) Fiskal'nyy federalizm v etnicheski razdelyonnoy Efiopii [Fiscal federalism in ethnically divided Ethiopia]. Sravnitel'noe konstitutsionnoe obozrenie, vol.33, no.3, pp.97–114. (In Russian).

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