Foreign aid disbursements rise in July

Foreign aid disbursements increased by 48.5% in the first month of the fiscal year, but the government could not manage any commitments for fresh loans from development partners.

Bangladesh, however, received a commitment for a donation of $1.53 million from the United Nations, according to data from the Economic Relations Division (ERD).

In the first month of fiscal 2022-23, development partners disbursed $488 million. It was $328.66 million in the same period of the last fiscal year.

ERD officials said there was room to increase the disbursement further, adding that 36 ministries and departments could not get any foreign loans disbursed in July.

If the pace of disbursement from the beginning is high, then the annual target can be achieved easily by the end of the fiscal year, they added.

The government has a target of $12.38 billion in foreign aid utilisation for the current fiscal year and the July disbursement is just 3.9% of the target.

The government will receive $1.86 billion as budget support in the current fiscal year from various development partners.

In addition, the government is in discussions to get $1.5 billion from the International Monetary Fund (IMF) and $1 billion each from the World Bank and the Asian Development Bank this fiscal year in budget and fiscal support.  

Foreign aid disbursements exceeded $10 billion for the first time in the just-ended fiscal year, thanks to the fast utilisation of external loans in some megaprojects nearing completion, more budget support from development lenders and funds for Covid-19 vaccines.

ERD officials said usually loan promises do not come from development partners at the beginning of fiscal years. However, the division has already started negotiations with development partners for various loans.

It is expected that the fulfilment of commitments in the current financial year will surpass that of the last financial year, they added.

Officials said, so far discussions have started on $5.77 billion loans for various development projects, which will increase gradually.

In fiscal 2021-22, Bangladesh received commitments for $8.20 billion in loans from its development partners.

According to the ERD report, 74% of the July disbursements came from bilateral development partners.

Japan topped the list, with disbursing $200 million, followed by China at $102 million and India at $58.52 million.

Among multilateral development agencies, the Asian Development Bank and the World Bank have provided $63.79 million and $22 million respectively.