Bangladesh had put forward a modest Annual Development Programme (ADP) for FY24, but austerity measures triggered by a persistent USD shortage have caused implementation to be the lowest in recent years.
The ADP implementation stood at Tk 1,46,375.50 crore in the 11-month period [July-May] of FY24, hitting 57.54 per cent of the total revised allocation, according to the latest data from the Implementation Monitoring and Evaluation Division (IMED) published on Wednesday.
It should be noted that the revised ADP allocation for FY24 was Tk 2,54,391.64 crore.
During the July-May period of FY20, ADP implementation stood at 57.37 per cent, which was the lowest in the last five years.
Current FY’s implementation ratio is the second lowest, an analysis of IMED data shows. Besides, the implementation rate in May alone was 8.28 per cent or Tk 21,060 crore, compared to Tk 26,957 crore recorded in May last year – 11.4 per cent of the total allocation.
Speaking to The Business Post, IMED Secretary Abul Kashem Md Mohiuddin said, “ADP implementation will go up in the last month of this FY, but there is a concern that the implementation will fall short compared to the last FY.
“The key reason is the ongoing USD shortage. We will identify the reasons behind this lacklustre implementation in the next few days.”
Discussing the government’s austerity measures, Kashem said, “The projects that had been completed 20 per cent – 30 per cent, are being delayed. However, efforts are on for speedy implementation of projects with 80 per cent or more completion.
“So, we are optimistic that the number of projects implemented this year will be bigger than that of last FY.”
Centre for Policy Dialogue (CPD) Senior Research Fellow Towfiqul Islam Khan said, “ADP implementation has been slow because the government lacks adequate financial capacity. The government first considers paying off salaries, wages and interests, and then comes ADP allocation.
“Even if the government plans to implement ADP through more borrowing, it is now unfeasible as the government lacks the capacity. A delayed ADP implementation will also delay project benefits, and trigger time extensions and cost overruns.”
Key ADP implementations
The Local Government Department, which received the highest allocation in FY24, implemented 64.13 per cent ADP during the July-May period, which amounts to Tk 42,956 crore. This department has around 263 projects in this financial year.
The Power Division received the second highest allocation and had an implementation rate of 77.01 per cent, which was Tk 30,063 crore.
Among the ten ministries, departments and divisions with the highest allocations, the health and primary education sector is lagging in terms of implementation.
The Primary and Mass Education Ministry implemented 64.86 per cent of the total allocation, which was Tk 8,121 crore. However, the Health Service Division implemented only 43.06 per cent or Tk 9,360 crore during the eleven months of FY24.
Towfiqul pointed out, “The underprivileged and impoverished are mostly the beneficiaries of government-provided healthcare. So a slower ADP implementation in the healthcare sector would impact them directly.
“Besides, even if the healthcare sector gets more allocation, slower implementations have become the norm. Even before, healthcare sector expenditure as a percentage of the GDP was less than 1 per cent, now it has dropped further from 0.6 per cent to 0.7 per cent. This trend is deprioritising this sector.”
The two departments involved in infrastructure development, and roads and bridges are far behind in terms of implementation. However, the two divisions are in the top ten in terms of allocation.
ADP implementation of Road Transport and Highways Division had been 52.78 per cent or Tk 27,803 crore. On the other hand, the Bridges Division implemented 49.42 per cent or Tk 7,670 crore during July-May of FY24.
ADP implementation of the agriculture ministry, which is crucial to food security, is better than others. It implemented more than 71 per cent, which was Tk 4,528 crore in the eleven-month period.
On the implementation side, the Financial Institutions Division was at the bottom, with an implementation rate of 28.48 per cent at Tk 386 crore.
The Department of Statistics and Informatics Division has a similar ratio, the implementation rate was 27.08 per cent, at Tk 329 crore during July-May of FY24.
Some other departments with slower implementations are the Public Service Commission and Internal Resources Division, which have implemented slightly over 30 per cent each during the same period of FY24.
