Donor commitments‚ foreign aid up due to timely budget announcement
KATHMANDU:
The flow of foreign aid into the country and commitments by international donor agencies to pump money into the economy are going up in an impressive manner this fiscal year, with the timely announcement of the budget and the confidence that the political situation will gradually improve.
Yesterday alone, the government signed deals worth Rs 22.1 billion with the United Kingdom and Denmark
on projects ranging from strengthening local governance and community development to private sector development, and peace, human rights and governance.
In the deal signed with the UK government, the Department for International Development — a British government agency — has pledged to provide a grant of 70 million pounds sterling (approximately Rs 11.3 billion) to support the second phase of the Local Governance and Community Development Programme.
The agreement was signed by finance secretary Shanta Raj Subedi and head of DFID Nepal Gail Marzetti, said joint secretary at the Ministry of Finance Krishna Prasad Devkota.
The four-year programme, to be implemented by the Ministry of Federal Affairs and Local Development through local bodies, aims to improve local governance, enhance public service delivery, empower citizens and contribute to socio-economic and infrastructure development.
In another deal signed yesterday between finance secretary Subedi and Danish ambassador to Nepal Kirsten Geelan, the Danish government has pledged to provide a grant of 600 million Danish kroner (approximately Rs 10.8 billion) to support two projects.
Of the two projects, ‘Unnati’ will receive a grant of 400 million Danish kroner (approximately Rs 7.2 billion) and the project on peace, human rights and governance will get a grant assistance of 200 million Danish kroner (approximately Rs 3.6 billion), Devkota informed.
The five-year-long ‘Unnati’ programme will focus on commercialisation of orthodox tea, ginger and dairy farming, strengthening of rural transport network and creation of an enabling environment for the private sector through advocacy and public-private dialogue.
On the other hand, the project on peace, human rights and governance will work towards strengthening democracy in the country, ensuring sustainable peace and enhancing capacity of local bodies and judiciary, among others.
“We are happy that our development partners are continuing to support us in achieving various development targets which will ultimately help us reduce poverty and raise living standards of people,” Devkota said.
Along with commitments from donor agencies to help support various projects, actual flow of foreign aid has also gone up this fiscal year.
The government received Rs 13.26 billion in grants and Rs 8.91 billion in loans from various bilateral and multilateral donor agencies in the first four months of the current fiscal. In the same period last fiscal, the government had received only Rs 4.59 billion in grants and Rs 700 million in loans.
“Most of the money channelled so far this year was to compensate project developers who undertook various government projects in the past,” Ministry of Finance spokesperson Ram Saran Pudasaini said. It is a common practice in the country for the contractors to make payments in advance on behalf of the government and claim the amount after completion of the work.
Source: THT
