In the initial nine months of the current fiscal year, foreign aid disbursements to Bangladesh experienced a slight 5% uptick from the previous year, contrasting sharply with a significant 155% surge in foreign aid commitments for the same period, according to the Economic Relations Division (ERD) of the Ministry of Finance.
The ERD report further indicates a 15.76% decline in net foreign aid disbursements during this period, attributed to a 48.61% increase in debt service costs for repaying previous loans and interest.
Analyzing the ERD data, it was found that all development partners committed foreign aid worth $7.24 billion in the July-March period of the current fiscal year, compared to $3.08 billion during the same period in the previous fiscal year.
The commitment increased by $4.17 billion, 135.39% higher than the first nine months of the previous fiscal year. However, development partners released $5.63 billion during the same period, compared to $5.36 billion in the last fiscal year.
The amount of disbursement increased by $268.57 million, which is 5% higher than the first nine months of the previous fiscal year.
Experts and economists have stated that foreign aid concessions are of great importance in advancing development work amid a crisis in foreign exchange reserves, pressure on currency exchange rates, and a slowdown in revenue collection.
They said that the lack of interest and inefficiency of those concerned in the implementation of the project hinder development activities by preventing the disbursement of foreign aid.
The ERD report revealed that the government has paid $2.57 billion as principal on loans and interest in the first nine months of the fiscal year.
Repayments during the same period of the last fiscal year were only $1.73 billion. Repayments in the current fiscal year increased by $841.18 million, about 49% higher than the first nine months of the last fiscal year.
Interest payments surpassed the $1 billion mark for the first time in the current fiscal year, reaching $1.05 billion in the first nine months. The interest payment during the same period of the previous fiscal year was $485.9 million, indicating a growth of 117%.
Repayment of loans amounted to Tk28,281.45 crore in terms of domestic currency in the last months, compared to Tk16,965.66 crore during the same period in the previous fiscal year. Loan repayment costs increased by 66.70% in terms of Taka.
Net disbursement, excluding loan repayments, stood at $3.06 billion in the July-March period of the current fiscal year, compared to $3.63 billion in the same period of the previous fiscal year.
The net disbursement dropped by $572.61 million in nine months, which is 15.76% lower than the previous year.
ERD officials said that the Asian Development Bank (ADB) has disbursed the highest amount, $1.43 billion, while Japan has released the second highest, $1.3 billion.
Among other partners, the World Bank ($967.3 million), Russia ($807.5 million), China ($361.7 million), and India ($199 million) disbursed significant amounts.
