More funds going to off-budget projects

KATHMANDU:

Although the proportion of funds made available by foreign donor agencies for off-budget projects has been increasing lately, the encouraging fact is that the government has received its details this time around.

“This has enabled us to get an insight into how, when and for what purpose the aid was used,” the Ministry of Finance (MoF) says in a statement. Previously, the government usually used to be unaware about utilisation of off-budget funds.

Of the total foreign aid that flowed into the country last fiscal year, 36 per cent went to off-budget projects, meaning the funds were not enrolled in the government’s account book, shows the Development Cooperation Report released today by MoF. In the previous fiscal, only 23 per cent of the foreign aid was used to finance off-budget programmes.

In the last fiscal, the government received foreign aid equivalent to $960 million, of which 49 per cent had come from multilateral donor agencies, like the World Bank and the Asian Development Bank, 41 per cent from bilateral donor agencies under the Organisation for Economic Cooperation and Development (OECD)’s Development Assistance Committee and the rest from neighbouring China and India.

The amount of foreign aid received by Nepal in the last fiscal was slightly lower than $1.04 billion of the previous fiscal. The inflow of foreign aid tapered last fiscal because of the government’s inability to introduce a full budget on time, gloomy economic scenario, and erosion in the capacity of project implementing agencies to utilise the budget, says the MoF statement.

Of the total aid received by Nepal last fiscal, 61 per cent was in the form of grants, 21 per cent in the form of technical support, and 18 per cent in the form of loans.

Among multilateral donor agencies, Nepal received the biggest aid of $231.40 million from the World Bank Group in the last fiscal, followed by the Asian Development Bank, United Nations, Global Fund and European Union. Among bilateral donor agencies, the United Kingdom topped the list with extension of $89.9 million in aid, followed by the United States, Japan, India and Switzerland.

Source: THT