Dhaka receives big budgetary supports from overseas aid in Jul-Feb

The country received 6.62 per cent higher foreign assistance in the first eight months of the current fiscal year (FY2020-21) as compared to the corresponding period of the previous FY, officials said on Thursday.

The development partners have also made 22 per cent higher aid commitments through signing different loan and grant deals during the July-February period of this FY, Economic Relations Division (ERD) officials said.

According to the ERD's provisional data, the foreign development partners disbursed US$3.72 billion - $3.60 billion in loans and $108.92 million in grants -during the period under review.

The figure was $231 million more than $3.48 billion - $3.32 billion in loans and $168.43 million in grants - received in the same period of last FY from the development partners including Japan, the World Bank and the Asian Development Bank (ADB).

Besides, the development partners confirmed $3.96 billion worth of medium-and long-term (MLT) loans and grants during the July-February period of this FY through signing several deals with the government, according to the ERD.

In the same period of FY20, they made a fund commitment worth $3.25 billion.

When asked, a senior ERD official told the FE that as some big loans like the ADB's $500 million and Japan's $320 million budgetary supports were disbursed during that period, the overall receipts reached a comfortable zone.

Of the total $3.96 billion commitment for MLTs and grants by the donors during the first eight months of the current fiscal, $3.38 billion was in loans and remaining $580.91 million was in grants.

In the corresponding period of FY2020, the development partners confirmed $2.92 billion fund in loans and $336.28 million in grant, ERD statistics showed.

A senior ERD official told the FE that both the aid commitment and disbursement to Bangladesh could be boosted further if not the coronavirus pandemic continued in Bangladesh.

"The donors could not send their missions to Bangladesh for completing the formalities. Besides, the government agencies also took cautious approach in taking fresh projects," he added.

Similarly, the project implementing agencies had faced the hurdles for the COVID impact which slowed down the project executions over the months, he added.

Since the foreign aid in the pipeline was available, its disbursement would be boosted upon higher project execution performance by the implementing agencies under the Annual Development Programme (ADP), the ERD official added.

According to the Implementation Monitoring and Evaluation Division (IMED), the government ministries and agencies spent only 34.71 per cent of their foreign aid allocations in the ADP during the July-February period of FY2021.

Another ERD official said that it was a good news that the aid disbursement picked up over the last eight months compared to the same period last FY.

At the end of the year, he expected that the aid disbursement and commitment targets for the current FY would be achieved.

The government had taken a target to receive an $8.32 billion worth of foreign aid during this FY. The foreign development partners used to release their committed funds against different public sector projects and programmes in Bangladesh every year.

Meanwhile, the government made loan repayments of $1.18 billion during July-February period of FY2021, the ERD data showed. The amount of debt servicing in the corresponding period last FY was $1.10 billion.

Out of the $1.18 billion debt servicing in the current fiscal, the government repaid interest worth $319.93 million and principal worth $867.52 million.

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