First quarterly ADP execution rate hit a five-year high in the current fiscal year even after a sluggish start thanks to a higher spending rate for foreign resources.
The annual development programme (ADP) implementation figure rose to 10.21 percent with Tk 16,755 crore spending, up from 8.75 percent or Tk 10,789 crore in the first quarter (July-September) last year, latest data of Implementation, Monitoring & Evaluation Division (IMED) suggest.
In the previous three fiscals, the Q1 progress rate was 7 percent, 9 percent and 10 percent during the period respectively.
Project assistance’s contribution to this year’s ADP performance was Tk 7,772 crore or 12.86 percent of yearly allocation, which is also the highest in five years.
In the same period a year ago, project aid utilisation was only Tk 3,274 crore or 8.19 percent. In the previous three fiscal years, the rate was 5 percent, 6 percent and 8 percent respectively.
Local resource spending, on the other hand, slipped to 8.48 percent even though the Tk 8,104 crore figure was higher than the previous July-September period’s Tk 6,494 crore spending that helped achieve 9.19 percent progress. This was the second lowest performance in five years.
In July of current 2017-18 FY, ADP spending rate was only 0.58 percent that improved to 5.19 percent in the next month.
Economic analysts, however, think that it is very difficult to draw any conclusion about whether project aid utilisation rate actually improved by assessing only a quarter’s figures.
“It’s good news that project aid utilisation improved. But all the figures are still too small to resort to any observation that foreign resource spending actually improved,” commented Dr Jahid Hussain, lead economist at World Bank’s Dhaka office.
Sometimes a large fund disbursement against a small project can show a big figure at this point of time, he said, adding: “But we’ve to see whether the higher figure came from systematic improvement driven by some reforms or not.”
“We’ve to wait for some more quarters to get the real picture of project aid utilization,” the noted economic also said.
Recently, Economic Relations Division (ERD) has moved to spur project aid implementation in the current fiscal year with a close watch on 66 important foreign-funded projects of nearly $2 billion at the very outset of the year.
This allocation is 81.06 percent of total PA outlay for 307 projects under 2017-18 fiscal year’s ADP.
ERD for the first time has taken such initiative after foreign fund disbursement could not reach the expected level last year even though fund release improved in recent years.
In FY17, the government managed to get $3,396.1 million project aid released against $4,165 million yearly disbursement target.
A year earlier, PA disbursement performance was much better with $3563.6 million fund release figures.
Planning Minister AHM Mustafa Kamal on several occasions blamed the Gulshan attack on the very first day of last fiscal year for the poor PA utilization performance.
The incident also forced the government to drastically cut PA allocation in ADP by Tk 7,000 crore last year and compensate the same amount from local resources.
However, ERD has set a fund disbursement target higher of $5,555 million in the current fiscal year with a hope to make a turnaround.
Meanwhile, 15 top-allocated implementing agencies managed to post 11.58 percent overall implementation performance with Tk 15,359 crore total spending.
Of them, power division achieved the highest 29.07 percent execution performance followed by road transport and highways division’s 17.04 percent and local government division’s 14.36 percent.