Foreign aid commitments rise, disbursement falls in Q1
Foreign aid disbursement from July to September stood at $1.34 billion
The government has been able to secure huge aid commitments from development partners from July to September, the first three months of the fiscal year, but foreign aid disbursements have decreased due to the lack of spending capacity of government agencies.
Foreign aid commitments increased by 331% during the July-September period amounting to $405.40 million, which was $94.03 million in the same period last fiscal, according to Economic Relations Department (ERD) data.
Foreign aid disbursement, on the other hand, stood at $1.34 billion, which is a 30% decrease compared to the same period last year, when the disbursement was $1.93 billion.
Although aid commitments have increased compared to the last fiscal year, no pledges came from major development aid organisations except the World Bank, according to ERD sources.
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Loan commitments from promising development partners like Asian Development Bank, Asian Infrastructure Investment Bank(AIIB), Japan and China have not been received.
A $300 million aid commitment was received from the World Bank while commitments of $105.40 million dollars came from Europe.
The government received a commitment of $8.18 billion from development agencies in the last fiscal, but the target for the current fiscal year has been reduced to $6.2 billion. However, in the current global situation, the government is negotiating with the World Bank, Asian Development Bank, and the International Monetary Fund for budget support. As a result, the commitment amount is not expected to decrease from last fiscal.
Explaining the decrease in disbursement, ERD officials said disbursement was about 39% more than the same period of the last fiscal year. However, many ministries and departments are still lagging behind in the disbursement of foreign aid due to lack of capacity.
During the same period of the last fiscal year, development partners had waived some funds for budget support and the purchase of vaccines in view of the Covid-19 situation. This is also a reason why foreign aid allowance in the current fiscal year is slightly less than the previous fiscal.
Japan released the most foreign aid in the first three months of the fiscal year amounting to $459 million while China accounted for the second highest $274.79 million. Besides, the World Bank disbursed $192 million and ADB disbursed $167.98 million.
Insiders say in the first three months of the current fiscal year, the government has paid $525.61 million dollars to the development agencies including interest and principal amount. The repaid amount was $593.86 million in the same period last fiscal.
