Wednesday, January 16, 2019

22 per cent foreign aid disbursement out of budget

Though the foreign aid disbursement increased by 16 per cent to $1.62 billion in the last fiscal year, spending out of the budgetary system has not seen remarkable progress.
Of the total disbursement, some 78 per cent of the foreign aid has been received under on-budget headings, which means 22 per cent of the aid did not reflect in the government’s annual budget book.
According to thte Development Cooperation Report (DCR 2018) released by the Finance Ministry today majority of the development partners increased their aid to Nepal after devastating earthquake of April 2015. "Of the total disbursement, 50.5 per cent was loan, 35.1 per cent grant and 14.4 per cent technical assistance," the report reads, adding that the World Bank (WB) continues to be the largest development partner (DP) contributing the most in development aid to Nepal in the last fiscal year. "The WB contributed $533.51 million, up by 54 per cent aid compared to a fiscal year ago."
The World Bank’s financial support to Nepal significantly increased after the earthquake of April, 2015. During that year, the World Bank disbursement stood $188.12 million, and of the total disbursed amount, some 97.8 percent was on-budget.
Likewise, the Asian Development Bank (ADB) remained the second highest multilateral lending agency to Nepal, disbursing $291.69 million in aid last fiscal year, up by 14.88 per cent. "Out of the total disbursement, some 95 per cent was on-budget," it further notes.
The United Kingdom emerged as the third largest development partner with a total aid disbursement of $123.87 million. But the aid disbursement from the UK has dropped by 3.46 per cent in the last fiscal year compared to a fiscal year ago.
Under the bilateral development partner, Nepal’s northern and southern – India and China – neighbours stands at 8th and 9th position, respectively. "Though the aid from China jumped by 42.38 per cent to $58.72 million, the aid from India dropped by .2 per cent to $56.76 million in the last fiscal year compared to a fiscal year ago," the report adds.
"As Nepal has been receiving more than one-third of the development partners' money in the form of grants," finance minister Dr Yubaraj Khatiwada said adding that the grants will drop in the coming years as Nepal has made a number of institutional reforms, increasing its capacity to pack back its loans. "Drop in grant means Nepal's loan will grow."
"As Nepal aims to graduate to the league of developing nations by 2022, we will have to focus on mobilising the loans received under the low interest rate more prudently and in a transparent manner," he added.

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