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ADB says its aid disbursement in Nepal poor

Xinhua, October 21, 2016 Adjust font size:

Asian Development Bank (ADB) has shown concern over low disbursement of its committed aid to Nepal as 66 percent of its total pledged aid has only been disbursed as of September 30.

ADB is one of the largest donors for Nepal and has an outstanding aid commitment of 1.73 billion U.S. dollar for 33 investment projects here.

"But, of the total outstanding aid, 1.15 billion has not been disbursed yet which is six percent of Nepal gross domestic product," said Kenichi Yokoyama, country director of ADB for Nepal, speaking at the tripartite meeting with Ministry of Finance and the government's implementing agencies in Kathmandu on Thursday.

For 2016, ADB has targeted to disburse 240 million U.S. dollar but only 131 million U.S. dollar has been released as of September end.

The multilateral donor described overall disbursement "satisfactory", but some sets of projects suffered usual problem of frequent transfer of project staffs, poor performance of contractor and non availability of construction materials contributing to low spending.

In Nepal, ministers are often blamed for transferring key project officials frequently for political and personal gains, which delays the implementation of development projects hitting public spending.

Yokoyama expressed concern that many committed actions in the previous tripartite meeting was not followed, which resulted in continued low disbursement of its aid.

In response, Nepal's Finance Secretary Shanta Raj Subedi said that the all the stakeholders should focus on accelerating the works in ADB-funded projects, adding that Nepal government was committed to do so.

Poor disbursement of ADB's aid corroborates with overall low capital spending (development budget spending) of Nepalese government.

In the last fiscal year 2015-16 that ended in mid-July, only 54 percent of the allocated capital budget was spent, according to Financial Comptroller General of Nepal (FCGO), which keeps records of Nepal government's accounts.

Foreign aid contributes to a significant part of Nepal's capital budget.

The poor performance in public expenditure has not changed much even in the current fiscal year 2016-17.

The capital budget expenditure has stood at 3.5 percent of allocated budget under the heading as of first quarter of the current fiscal too, according to FCGO. Enditem