The Financial Express

Dhaka's foreign aid receipt up by about 20pc in July-Oct

Evaly and Fianancial Express Evaly and Fianancial Express
Illustrative photo Illustrative photo

Bangladesh's foreign aid inflow boosted in the first four months of the current fiscal year (FY), 2020-21, as the development partners disbursed 19 per cent higher funds than the corresponding period of last FY, officials said on Friday.

The external aid has gone up due to release of a record high assistance, worth US$647.11 million, by the Japan International Cooperation Agency (JICA) during July-October period of this fiscal, they added.

The country's bilateral and multilateral development partners released $1.72 billion worth of medium- and long-term (MLTs) loans and grants during July-October period of this FY, the Economic Relations Division (ERD) provisional statistics showed.

During the corresponding period of last FY, the foreign development partners released $1.43 billion worth of assistance, the ERD figure showed.

"The JICA alone disbursed $647.11 million worth of assistance. Release of its $320 million budgetary support in August for tackling Covid-19 pandemic increased the overall foreign aid inflow to the country," a senior official told the FE.

Besides, the MLT and grant disbursements by other major development partners, including the World Bank (WB), the Asian Development Bank (ADB) and China, were also remarkable, the ERD official added.

The Washington-based WB disbursed $348.05 million worth of assistance, the ADB $246.67 million, and China $246.38 million during this July-Oct period.

Out of the total $1.71 billion worth of foreign aid, the development partners released loans worth $1.65 billion and grants worth $60.3 million during the first four months of FY 21, the ERD data showed.

Meanwhile, the commitment of foreign aid was recorded lower during July-October period of current FY.

The foreign development partners confirmed assistance worth $1.23 billion during the first four months of this fiscal.

Out of the total aid commitment, they confirmed $1.04 billion in loans and $192.6 million in grants during July-Oct period of this fiscal.

In the same period of last FY, the foreign donors and lenders confirmed $2.22 billion worth of aid.

The senior ERD official said: "Since a big Chinese loan deal (involving nearly $1.0 billion) was signed in early last fiscal, the commitment was showing higher in FY 20 compared to the same period of FY 21."

But no such big chunk of foreign aid deal has been signed yet during this FY, resulting in a weaker balance sheet in MLT loans and grant commitments in the government accounts, he added.

According to the ERD, the project aid expenditure by the implementing agencies and ministries have been showing a good trend over the last few months, which would pick up the overall aid receipt at the end of the year.

Meanwhile, the government served debt worth $649.96 million against the total MLT loans during the July-October period of this fiscal.

It repaid $469.64 million as principal amount and $156.77 million as interest against the outstanding external MLT loans during the period under review, the ERD data showed.

In the same period of last FY, it served debt worth $631.2 million, of which $463.27 million was principal, and the remaining $143.58 million was interest.

Various development partners, including the WB, the ADB, the JICA, the UKAID, the Islamic Development Bank (IDB) and China, disburse concessional and non-concessional loans and grants every year for development of Bangladesh.

In FY 2020, the government received total foreign aid worth $7.3 billion from the partners for developing its infrastructure and eradicating poverty.

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