Finance ministry rushes to get Rs 43b in reimbursements by fiscal-end
June 27, 2019 09:21 AM NPT
Officials hope reimbursements will help in easing pressure on a worsening balance of payment position
KATHMANDU, June 27: The government is yet to receive Rs 43 billion from development partners in reimbursements for spending made on various donor-funded projects and programs.
Reimbursements refer to the money that development partners transfer to the government coffers after the spending is made in any project or programs that they have financed.
As the delay in getting reimbursements from development partners is putting pressure on external sector of the country, the Ministry of Finance (MoF) is making focus to get due reimbursements from the development partners.
According to the finance ministry, the government has received a total of Rs 63 billion in reimbursements from development partners in the first 11 months of the current fiscal year – FY2018/19. While the fiscal year-end is just three weeks away, the possibility of the government receiving all outstanding reimbursements from the donors is very low.
Amid delay in obtaining funds for the expenses made on various projects financed by donor agencies, Minister for Finance, Yuba Raj Khatiwada, has instructed respective agencies and authorities to expedite the process of receiving reimbursements. The instruction comes in the wake of widening balance of payment (BoP) deficit of the country in recent months.
According to the Nepal Rastra Bank (NRB), the BOP – the account that records the total transactions of the country with the rest of the world – slipped into a deficit of Rs 68.2 billion over the first ten months of the current fiscal year compared to the deficit of Rs 18.93 billion in the corresponding period of the last fiscal year 2017/18.
While the widening trade deficit is blamed for the worsening BoP position of the country, the rise in the inflow of foreign aid could help balance the external sector to an extent, according to experts. The government seems to be focused on getting the reimbursements also with an aim to balance the payment position of the country at the fiscal year-end.
Uttar Kumar Khatri, a joint secretary at the MoF, told Republica that the government has been making efforts to get all reimbursements by mid-July i.e. the fiscal year-end. “The total reimbursements we have received under foreign assistance so far is better than the last fiscal year. However, there is still a huge amount that we have to get from the donors. The reimbursement dues get accumulated as many project works are carried out in the last months of the fiscal year,” said Khatri, who is also the spokesperson of the ministry.
“While some project executing agencies are preparing bills and invoices as well as reports of the physical and financial progress, others have already claimed reimbursements from donor agencies. The reimbursements are made after the due process is completed,” he added.