Half of allocated foreign assistance remained unspent in FY 2013/14

KATHMANDU, April 11: Commitment of foreign assistance is pouring in and surpassed what had been made in previous years. But expenditure, in percentage terms, against budget allocation has hit the lowest in last five fiscal years. Figures show that expenditure of the donors’ money is only a little over half of the allocated amount.

The Development Cooperation Report (DCR) 2013/14, unveiled on Friday, blames the incomplete reporting of direct payment, low pace of development project’s implementation and low level of capital expenditure for the widening gap between budget allocation of foreign aid and expenditure.

The overall budget expenditure progress of the country hovers between 80 and 90 percent. Though bunched in into the last quarter and the last month of the fiscal year, expenditure of foreign assistance remained at around 60 percent, however the percentage in the last fiscal year was only at 51.

Speaking at the report unveiling Finance Minister Ram Sharan Mahat said the figures of the foreign aid mobilization increased to Rs 111 billion in the last fiscal year, compared the previous fiscal years from Rs 96 billion.

The report compiles details of donor assistance in Nepal and also gives a comprehensive analysis focused on the projects run on foreign aid, sectoral expenditure based on data reported voluntarily to the ministry by donors through an Aid Management Platform (AMP) -- an online portal.

Mahat, however, expressed dissatisfaction with donor agencies saying that the agencies are engaged in too many projects and working with the too many ministries making the unitary costs of the implementation and administrative costs high.

There are 26 donors in total in both bilateral and multilateral ones but their aid has been mobilized for 443 development projects, clearly showing the fragmentation of the assistance and even raising issues about effective spending and delivering expected results. A donor agency in Nepal has, in average, engaged with the nine ministries and government agencies.

European agencies alone have 75 projects and work with 21 ministries and government agencies. The United Nations has 74 projects and is engaged with 23 ministries and government agencies. The Asian Development Bank has 69 projects and works with 17 ministries and government bodies. The World Bank and Norway have 40 and 33 projects respectively and work with 16 and 15 ministries and government agencies.

Mahat also said that the DCR publication has motivated donors to be more transparent. DCR has integrated data of donors’ aid both bilateral and multilateral as well as aid of INGO incorporated from this report.

Officials have also noted that donors have increased their assistance in the government’s budgetary system to 71 percent of the total foreign aids in Fiscal Year 2013/14 as a positive move from the previous year’s percentage of 64 percent only.

Donors implemented the remaining portion of their aid by themselves or through different non-government organizations.

The country received 52 percent of the Rs 111 billion from multilateral donors while donations by bilateral donors were 48 percent in the year.

The report for the first time also incorporated a different section for International Non-Government Organizations (INGOs). A total of 56 INGOs have spent Rs 76 million in 110 projects in the country, the DCR report says.