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Bangladesh - October 26, 2023

Foreign allocation decreasing in ADP

Revised ADP soon

Mahfuja Mukul: The upcoming 12th National Assembly elections could have an impact on the implementation of development projects. Due to this, foreign loan may also decrease with the snail pace. Money receipts have already begun to decline due to global conditions. Due to these reasons, there is a fear of reducing the large amount of foreign aid from the Annual Development Program (ADP) in the current financial year. In this context, the Economic Relations Department (ERD) has started the process of deducting the allocation of the foreign sector. The organization has written to the ministries and departments seeking information.
When asked about this, several officials of ERD said that information has been requested from the ministries and departments on an urgent basis. If they get them, a series of meetings will be held in December. ERD Secretary Sharifa Khan will preside over the meeting. Based on the calculations obtained from there, the information for the revised ADP will be sent to the Planning Commission. According to ERD sources, the information has been sought for determining the revised ADP for the current fiscal year 2023-24 and ADP estimates for the fiscal years 2024-25, 2025-26 and 2026-27 from October 22. In this case, information is being collected on how much allocation is required for ongoing and new foreign aided projects. According to the letter, the allocation for the revised ADP should be based on the expenditure or progress of implementation of foreign aid projects for the 4 months from July to October. Apart from this information should also be given for the preparation of MTBF (Medium Term Budget Framework) for the next three financial years. All information has been requested to be submitted to ERD by November 9.
According to a recent report of ERD, the foreign currency discount has decreased in the last 2 months (July-August). But the opposite picture prevails in the case of debt repayment. In these 2 months, $73.9 million have been disbursed against various projects, which was $83.28 million in the same period of the last financial year. According to this, $9.38 million have decreased. On the other hand, in the 2 months of the current financial year, the loan taken by the development partners has been paid $40.5 million, in the same period of the last financial year it was $28.27 million. According to this, the loan repayment has increased by $11.78 million. Stakeholders fear that the disbursements will be lower in September and the loan repayments may increase.
ERD’s former senior secretary Kazi Shafiqul Azam said that this period of the election fiscal year is called the transition period. Monitoring will not be proper at this time. Everyone will be busy with the election. Many parties, including development partners, will wait to see what happens. In such a situation, the speed of project implementation will slow down. As a result, there is a risk of a large reduction in the allocation in the revised ADP. In transition from this situation, preparations should be made keeping in mind the issue of the election period from now on.
The report of the Implementation Monitoring and Evaluation Department (IMED) has revealed a decrease in foreign exchange expenditure. It has been seen that in the current financial year, the foreign money allocated to ADP is Tk 94 thousand crores. Out of this, in the last 3 months (July-September), the ministries and departments have spent Tk 7.5 thousand crore, which is 7.98 percent of the total allocation. In the same period of the last financial year, the rate of foreign currency consumption was 8.8.54 percent. In this case, the cost is decreasing. Along with that, seven ministries and departments have yet to open their expenditure accounts. That is, 3 months of the financial year are passing but not a single rupee has been spent. The ministries and departments that are lagging behind are the Ministry of Water Resources, Ministry of Health Education and Family Welfare, Department of Internal Resources and Ministry of Lands. Besides, Ministry of Public Administration, Ministry of Industry and Ministry of Youth and Sports.

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