Wednesday, 29 September, 2021

PA release, commitments see modest fall in FY2021

  • Staff Correspondent
  • 1 August, 2021 12:00 AM
  • Print news

Both fund release and commitment for new funds from the development partners modestly declined in 2020-21 fiscal year on the back of foreign funded projects losing some steam amid corona pandemic.  

Foreign fund disbursement fell by 2.28 percent to $7,106.41 million in FY21 from $7,271.97 million a year earlier, suggest latest data compiled by Economic Relations Division (ERD).

Development committed for $9349.94 million new funds last fiscal year, including budget support aimed at helping the government meeting the widening budget deficit.

Commitment for project loans and grants amounted to $8676.33 million in the last fiscal year, down from $9554.42 total fund commitments made in the previous fiscal year.

Foreign fund disbursement was comparatively low in the last fiscal year as execution of ongoing aided projects faced disruption because of lockdowns and absence for foreign project experts and workers in some important project, ERD officials say.  

Despite the modest fall, ERD officials were upbeat that the overseas fund disbursements still crossed the $7 billion threshold amid the global Covid-19 pandemic.

However, the intensified fund disbursement could not stop the aid pipeline to grow further last fiscal year.

The aid pipeline stood at a record high of $51 billion in 2020-21 fiscal year amid the Covid crisis coupled with traditionally low project execution capacity of the implementing agencies.

At the outset of FY2021, the size of the aid pipeline was $48.8 billion.

Meanwhile, the government managed to mobilise a significant amount of budget support from some development partners to narrow budget deficit at a time when domestic resource mobilization faced some setback during the pandemic.

Unlike project loans, budget support is not tagged with specific terms and condition and the government enjoys freedom in spending the money.

The disbursement of project assistance is comparatively a lingering project as it depends on project implementation, but release of budget support is faster as it has nothing to deal with project implementation.

In FY2021, the World Bank, Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB) and European Union (EU) released their committed budget support to help Bangladesh in economic recovery and purchase Covid-19 vaccines.

The release of nearly $2 billion budget support actually helped fund release cross the $7 billion threshold, according to ERD officials.

The released funds in FY21 include $6772.17 million and $334.23 million grants. Meanwhile, the government has managed to repay over $1909 million loans, including interests

Although overall ADP implementation improved year-on-year during the first 11 months of FY2021, aided project implementation slipped to 30.10 percent from 30.82 percent a year earlier. The execution rate hit as high as 33.03 percent in 2017-18 fiscal year, official data suggest.