ADP implementation drops to 84% in FY23

Infographic: TBS

The implementation of the Annual Development Programme (ADP) experienced a significant decline in the fiscal 2022-23.

According to the Implementation Monitoring and Evaluation Department (IMED) report released Thursday, only 84.16% of the revised ADP allocation was spent last financial year, compared to the previous year's rate of 92.74%.

Officials from the IMED of the planning ministry cited various reasons for the slowdown in ADP implementation.

The current economic situation has led to halts in many projects due to the rising cost of construction materials, they mentioned, adding that the government's austerity measures regarding project spending amid the present economic conditions limited funds for some projects, affecting the overall ADP implementation rate.

To tackle the economic crises, the government has categorised projects into A, B, and C categories based on their importance. Projects deemed less important have been placed in the C category, with temporary fund releases halted for them, said planning ministry officials.

Meanwhile, Category B projects can receive 75% of their allocated funds, while Category A projects can receive 100% of their allocation.

However, the challenges in ADP implementation are not solely attributed to financial constraints.

IMED officials highlighted various factors affecting the process, such as complexities in tendering, land acquisition, and foreign fund sourcing, as well as delays in administrative approval and the appointment of project directors. 

Insufficient feasibility studies and lack of coordination among implementing agencies in the field have also hampered progress.

Spending spree towards year-end

Like in previous years, the concerning tendency of implementing agencies to spend a significant portion of their budget towards the end of the fiscal year to boost the implementation rate was also observed in the just concluded FY23. 

In June alone – the last month of the fiscal year – 22.44% of the total ADP allocation for the fiscal year was spent, while 42.52% was implemented in the last three months of the fiscal. In contrast, the implementation rate during the remaining nine months ranged between 2%, 3%, or 5%.

Regarding the issue of ADP project implementation, Dr Mustafa K Mujeri, director general of the Bangladesh Institute of Development Research (BIDS), however, emphasised that the percentage of implementation should not be the primary focus. Instead, the success of ADP projects should be assessed based on whether they achieve their intended goals and objectives. 

Rushing to spend money near the end of the fiscal year compromises project quality and diminishes the desired benefits for the country, he observed. 

Mujeri also underscored the importance of increasing the implementation capacity of organisations to overcome these challenges.

Government fund utilisation

According to the IMED report, during FY23, ministries and divisions managed to spend 81.77% of the government fund allocated to the ADP, which was a slight decrease from the previous fiscal year's 92.11% spending rate.

Despite their ambitious efforts in using public funds, the foreign aid allocation was not reduced in the revised ADP. A total of Tk1.53 lakh crore was allocated from government funds in the ADP during the last financial year.

However, some implementing agencies, such as the Health Services Division, Secondary and Higher Education Division, Ministry of Land, Ministry of Water Resources, Ministry of Fisheries and Livestock, Local Government Division, and Ministry of Primary and Mass Education, failed to fully utilise the allocated government funds. 

In fact, a total of 30 agencies, including the mentioned ministries and divisions, managed to spend less than 80% of the allocated money.

On a positive note, certain ministries and divisions performed well in utilising the funds. Noteworthy examples include the Ministry of Liberation War Affairs with a spending rate of 97.79%, the Bridges Division at 96.87%, the Information and Communication Technology Division at 95.35%, and the Power Division at 94.67%.

Foreign debt usage

Ministries and divisions also fell short of utilising 100% of foreign loans, even after the foreign aid utilisation target was reduced in the revised ADP.

IMED data indicate that 90.40% of the allocation from foreign loans was used during the last financial year, compared to 92.66% in the previous year. 

To encourage greater utilisation of foreign loans, the government provided various instructions to the ministries and divisions.

Highest allocation recipient ministries, divisions lag

Among the 15 ministries and divisions receiving some 81.6% of the total allocation in the revised ADP, their implementation rates were lower than the national average at 82.73%. 

Notably, the Health Services Division had an implementation rate of 68.2%, the Secondary and Higher Education Division at 71.40%, the Shipping Ministry at 77.2%, the Water Resources Ministry at 75.88%, the Local Government Division at 81.99%, the Ministry of Primary and Mass Education at 82.45%, the Ministry of Civil Aviation and Tourism at 86.86%, and the Agriculture Ministry at 85.49%.

Among the highest allocation recipient ministries and divisions, only the Energy and Mineral Resources Division was able to spend 100% of its allocated money, with the Bridges Division following closely at a 96.67% implementation rate.