Foreign aid commitments, disbursements fall
Foreign aid commitments from development partners and disbursements have dropped in the first five months of the fiscal year due to slow implementation.
According to data from the Economic Relations Division (ERD), foreign aid commitments fell by 88.27% during the July-November period. Only $461.3 million was pledged this time. During the same period in the last fiscal year, commitments of $3.9 billion were made.
On the other hand, in the first five months of the fiscal year, foreign aid disbursements decreased by 20.29%. In the first five months, $2.46 billion was disbursed. The disbursement was $3.08 billion in the same period last fiscal year.
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According to ERD sources, due to a lack of loan agreements with development partners, demand decreased during July-November. However, several development project loans are in the process of being signed. For example, the Asian Development Bank signed a loan agreement of $628 million in December.
As of November, other than $300 million from the World Bank, no pledges came from major development partners, according to ERD data.
During July-November, no loan commitments were received from promising development partners like the Asian Development Bank, Asian Infrastructure Investment Bank(AIIB), Japan and China.
In the current fiscal year, the government expects to realise $8.5 billion in pledges from development partners.
According to ERD data, $2.5 billion in development assistance was disbursed in the first 5 months of the current fiscal year. The disbursement was $3.08 billion in the same period in the last fiscal year.
Explaining the reduction in the allowance, ERD officials said that many ministries and departments are still lagging behind in the allowance of foreign aid due to a lack of their capacity.
On the other hand, during the same period of the last fiscal year, development partners had waived some funds for budget support and purchase of vaccines in view of the Covid situation. Due to this, the foreign aid allowance for the current fiscal year is slightly less than in the previous fiscal year.
Japan has released the most foreign aid in the first five months of the fiscal year amounting to $742.76 million. China made the second highest assistance at $468.7 million. Besides, the World Bank disbursed $425 million and ADB disbursed $319.4 million.
In the first five months of the fiscal year, the government has paid $880.46 million to the development agencies, including interest and principal. This amount was $868.25 dollars in the same period last fiscal year.
