Health sector largest single recipient of foreign assistance

Published On: April 25, 2016 12:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 25: Health sector became the largest recipient of Official Development Assistance (ODA) in Fiscal Year 2014/15, replacing education sector, according to the Development Cooperation Report (DCR) 2016.

The report, which was released in Kathmandu on Sunday by Minister for Finance Bishnu Poudel, shows health sector received US$ 177.74 million (17.41 percent), followed by education sector with $113.68 million (11.13 percent), road transportation which received $86.57 million (8.48 percent) and energy (including hydro/electricity) which received development aid of $78.55 million (7.69 percent). Next in the list are drinking water with foreign aid of $71 million (6.95 percent), agriculture which received $50.70 million (4.96 percent), home affairs with development assistance of $43.71 million (4.28 percent) and economic reform which received $39.40 million (3.85 percent).

"The top five sectors received approximately 60 percent of the total ODA disbursements in the last fiscal year, which is slightly higher than a fiscal year ago," the report states.

It further revealed that the overall ODA disbursement has been constant in 2014/15. "The volume of aid disbursement in 2014/15 reached a total of $1.13 billion of which ODA contribution was $1.02 billion million (90 percent) and INGO contribution was $116.89 million (10 percent)," it stated.

Despite the devastating earthquakes in 2015, the level of ODA disbursement stands at almost the similar level compared to the previous fiscal year when the country had received total ODA of $1.03 billion. Of the total ODA disbursement, about 45 percent was provided by multilateral donors, while approximately 55 percent came from bilateral donors. The overall trend of ODA flows with regard to disbursement remained constant (around one billion dollar annually) over the period of five years, according to the report.

The World Bank Group remained the top ODA provider (based on disbursement) among multilateral Development Partners (DPs) in the 2014/15. The top five multilateral development partners in 2014/15 have were the World Bank Group ($188.122 million), Asian Development Bank ($147.89 million), the United Nations Country Team ($44.24 million), the European Union ($31.38 million), and the Global Fund to Fight AIDS, Tuberculosis and Malaria ($ 22.06 million).

"The top five multilateral development partners contributed approximately 43 percent of the total ODA disbursements," the report shows.

Similarly, the United Kingdom remained the top ODA provider, based on disbursements, among bilateral development partners in the last fiscal year. The top five bilateral development partners for 2014/15 were the United Kingdom ($168.07 million), USAID ($132.37 million), Japan ($39.87 million), China ($37.95 million) and Switzerland ($32.47 million). The top five bilateral development partners contributed approximately 40 percent of the total ODA disbursements.

However, the trend of ODA flows disbursed over the last five years from top development partners indicates that the disbursement from the World Bank Group, ADB, India, Japan and EU has declined from the level 2010/11 while disbursements from United Kingdom and USAID have increased.

The finance ministry has been publishing the report for the past five years to make foreign assistance flow more transparent and make development partners more accountable as well as create pressure at home.

The report has also started tracking contribution of INGOs too which has increased over the years. The volume of aid disbursement from INGOs core funding has increased from $76.08 million in 2013/14 to $116.89 million in 2014/15, it added.

ODA represents, in average, about 20 percent of the national budget over the last five years.

The report also mentioned that grants continued to dominate the total ODA disbursement in 2014/15, although there was a slight decline compared to the previous year. Out of the total ODA disbursed in 2014/15, 58 percent or $587.971 million came as grants, 24 percent or $247.96 million came as loans and remaining 18 percent or $184.82 million as technical assistance.

While flow of loan assistance has increased, disbursement of grants has declined compared to the previous fiscal year, according to the report.

Central Development Region continues to receive the largest amount of ODA disbursement. The region received total ODA of $262.43 million, followed by the Eastern Development Region ($122.93 million), the Mid-Western Development Region with ($107.78 million), the Far-Western Development Region ($ 96.70 million) and the Western Development Region ($95.95 million). There is a sharp rise in ODA disbursement in the Central Development Region compared to last fiscal year. However, there is visible decline in disbursement in the Mid-Western and Western Development Region. "The figure excludes the amount attributed to nationwide projects," the report states.

Likewise, channeling of ODA through on-budget mechanism declined slightly in 2014/15 compared to last fiscal year. "Of the total ODA disbursed ($663.44 million), 65 percent was delivered through on-budget and 35 percent ($357.31 million) through off budget mechanism," the report said, adding that there was a slight decline in channeling aid through the government budgetary system when compared to a fiscal year ago, which was 71 percent and 29 percent, respectively.

The report has also highlighted that the engagement of development partners continues in multiple line ministries. Each development partner on average was found to have been engaged with eight different ministries/agencies in 2014/15 which is an improvement over nine in the previous fiscal year. "However, some development partners are still associated with more than 10 counterpart ministry/agencies," it said, adding that aid portfolios still remain reasonably fragmented even after five years of continuous tracking.

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