Dev partners spending more money outside govt system: Report

Published On: April 17, 2017 01:10 AM NPT By: Rudra Pangeni  | @rudrapang

KATHMANDU, April 17: Money disbursed by development agencies outside the government system increased significantly in fiscal year 2015/16, despite the government's effort to bring such spending into the government channel.

Development partners spent a record US$ 395 million out of the government system in the last fiscal year, Development Cooperation Report 2015/16 unveiled by the government on Sunday states.
The amount is the highest in four years.

This happened partly because the development partners have mobilized their own mechanism to spend, according to government officials.

Development partners channeled a total of $678 million through the government system in 2015/16.
Unveiling Development Cooperation Policy in 2014, the government had said that it would use the country system to mobilize development partners' spending in order to graduate to the league of 'Development Countries' from the 'Least Developed Country' category by 2022.

According to officials, 23 major development partners - both bilateral and multilateral - are operating in the country.

Development partners had spent $345 million through their local partners in 2012/13. The share of foreign aid spending in off-budget program increased to 37 percent in the last fiscal year, compared to 29 percent - the lowest in four years -- in 2013/14.

While Denmark, Australia, USAID, Korea and the Netherlands spent all their resources through their own system, South Asian Association for Regional Cooperation (SAARC), Saudi Fund, and Kuwait Fund for Arab Economic Development (KFAED) channeled all their support through the government system. Similarly, China, India, Finland, Germany, World Bank and ADB spent more than 90 percent of their assistance through the government treasury, according to the report. 

Unveiling the report, Finance Minister Krishna Bahadur Mahara said disbursement by development agencies through their own system increased in the last fiscal year as development partners spent reconstruction fund their own system. “However, we have made attempts to keep the figures low, and also control their engagement with too many ministries,” added Mahara. 

Finance Secretary Shanta Raj Subedi said use of donors' money in too many projects has worsened quality of projects. 

The report shows that development partners are engaged in an average of eight projects for each government entities. USIAD, which spent all its money through its own mechanism or through local partner organizations in 2015/16, worked with 20 government agencies in 2015/16. Asian Development Bank worked with 17 different government agencies, while UN agencies were engaged in 73 different projects. ADB has funded 48 projects, while USAID supported 41 projects.

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