Yemen announces first budget since war began

Yemen’s cash-strapped government yesterday released its first official budget since Houthi rebels overran the capital, Sanaa, in 2014.

Ahmed bin Dagher, the prime minister, said spending in the 2018 budget was projected at 1.5 trillion Yemeni rials (Dh14.3 billion), with revenue estimated at 978bn rials.

The Aden-based government projected a deficit of US$1.3bn (Dh4.77bn), based on the official exchange rate of 380 rials to the dollar, which is higher than the market rate of about 450 rials to the dollar.

The budget was released on the same day the United Nations appealed for nearly $3bn in aid for Yemen, where the civil war, famine and cholera have killed thousands.

The prime minister painted a devastating picture of the economy, saying that oil and gas production – the main source of revenue before the war – had ground to a halt and that $5bn in foreign reserves and stocks of the local currency had been looted by rebels.

Mr Bin Dagher did not offer details on revenue sources but it comes on the heels of a bailout by Saudi Arabia, the main backer of the internationally recognised government.

The prime minister vowed “optimal use” of Saudi Arabia’s $2bn deposit to the central bank, which has buoyed the local currency in recent days, and said the “austerity budget” would guarantee wages for civil servants and the military.

Saudi Arabia leads a military coalition that intervened in the Yemen conflict in March 2015 to support the internationally recognised government of president Abdrabu Mansur Hadi.

For more than a year, the government has been unable to pay salaries and the rial dropped sharply against the dollar, leaving Yemenis unable to afford food staples and bottled water.

The UN aid agency Ocha said yesterday that 11.3 million Yemenis “urgently require assistance to survive”.

“A generation of children is growing up in suffering and deprivation,” Ocha said in its appeal, adding that “1.8 million children under five are acutely malnourished, including 400,000 who suffer from severe acute malnutrition”.

More than three quarters of Yemen’s population – 22.2 million people – are dependent on some form of aid, the UN says.