KATHMANDU, June 5: Nepal has received significantly less foreign aid than projected in the current fiscal year, reflecting weaker revenue mobilisation and a shortfall in external assistance commitments, according to government data.
The government had targeted foreign aid inflows of Rs 53.44 billion in fiscal year 2025/26. However, as the fiscal year draws to its end, actual disbursements have remained well below expectations.
As of Wednesday, Nepal had received only Rs 20.91 billion in foreign aid, amounting to around 39 percent of the annual target. Officials say the widening gap between projected and actual inflows reflects both implementation delays and slower-than-expected disbursements from development partners.
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The Ministry of Finance has acknowledged growing pressure on resource management, as both revenue collection and external assistance have underperformed. Consequently, several development projects dependent on foreign aid have been affected.
Officials attribute the shortfall to multiple factors, including weak project implementation capacity, delays in expenditure execution, and slower disbursement cycles from development partners. Global uncertainties, including ongoing geopolitical tensions in various regions, have also contributed to the slowdown in aid flows.
Despite the decline, Nepal continues to receive assistance from several bilateral and multilateral partners, including the World Bank, Asian Development Bank, USAID, and the European Union. However, officials note that the pace of disbursement remains slower compared to previous years.
By the end of the reporting period, Nepal had also received Rs 56.80 billion in foreign loans, while total foreign assistance stood at Rs 63.14 billion. Overall foreign assistance has declined by about 15.4 percent compared to the previous fiscal year.
Officials further said limited capital expenditure and delays in project preparedness have compelled the government to rely more heavily on domestic borrowing and tighter budget management.
Authorities say efforts are underway to improve coordination with development partners and accelerate project implementation to ensure more effective utilisation of available foreign assistance in the remaining months of the fiscal year.
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