Foreign aid commitment falls 88% in July-November

Foreign aid commitments inflow has declined by 88 per cent to $461.31 million in the first five months of fiscal year 2022-23 (FY23) compared to the same period last year, according to the provisional data of the Economic Relations Division (ERD).

The disbursement of foreign aid has also witnessed a significant decline of 20.29 per cent year-on-year during the period.

According to ERD officials, the declines are owed to a slow implementation of the ongoing projects and delays in signing of loan agreements for several development projects.

ERD data shows that in the first five months of FY23, development partners made commitments to give Bangladesh $463.31 million in loans and grants, down from $3993.687 million in the same period of FY22.

In the meantime, the country’s major international development partners released a total of $2462.48 million in loans and grants, which was $3089.48 million in the same period a year ago.

Of the total foreign aid disbursement, Bangladesh received $2356.89 million in loans and $105.59 million in grants, said ERD.

The country received $3013.28 million in loans and $76.20 million in grants from the lenders during the same period in the last fiscal. In total, the government received a record over $10 billion foreign aid from the lenders in FY22.

A senior official of ERD told The Business Post (TBP) that the foreign aid disbursement has declined as a lot of funds are still in the pipeline. Once the implementation of the ongoing project gains pace, the loan disbursement will increase as well.

“We have received record foreign aid in the last fiscal year. The government is in a comfortable situation as development partners are disbursing funds for completing the ongoing development projects in the country,” he added. According to ERD, in the July-November period, the Asian Development Bank disbursed $319.40 million to Bangladesh, Japan disbursed $742.76 million and the World Bank released $425.42 million.

Besides, Russia released $198.29 million, China $468.70 million, Asian Infrastructure Investment Bank (AIIB) $15.41 million, India $149.11 million and others disbursed $143.39 million during the period.

Meanwhile, the government repaid a total of $880.46 million to the development partners in the first five months of FY23, up from $868.25 million during the corresponding period in last fiscal.

Of the total repayment made so far in the ongoing fiscal, the government repaid $642.79 million as principal of the outstanding loans while $237.67 million as interest. During the same period in the last fiscal, the government paid $642.98 million as the principal of outstanding loans and $225.27 million as interest.