Foreign aid in ADP continues to grow, reaches Tk100,000 crore
In the current fiscal, foreign aid accounted for 35.74% of the ADP fund, which was later reduced to 34.1% in the revised ADP
The amount of foreign aid in the government's Annual Development Programme (ADP) has been continuously growing over the years.
The amount of foreign aid stood at 37.7% in the approved ADP for the fiscal year 2024-25 (FY25), according to data released by the government. The remaining 62.3% will come from government financing.
In the current fiscal, foreign aid accounted for 35.74% of the ADP fund, which was later reduced to 34.1%.
Prime Minister Sheikh Hasina has instructed authorities concerned to speedily implement projects that are being financed by foreign aid partners to make sure that foreign aid in ADP does not decline in the upcoming fiscal.
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She also directed the Implementation, Monitoring and Evaluation Department (EMED) to give progress reports on foreign-financed projects every three months to speed up the implementation.
She gave the instructions while chairing the National Economic Council (NEC) meeting today (16 May), said Planning Division Secretary Satyajit Karmaker.
He said, "The government is prioritising the importance of foreign financing. Due to this, compared to the ADP of the current financial year, the allocation of government funds in the ADP of the next fiscal year has decreased by Tk4,000 crore. But at the same time, the share of foreign aid increased by Tk6,000 crore."
The secretary also said Bangladesh is set to graduate from the Least Development Country group in 2026.
"After graduation, the amount of flexible loans will decline. Hence, the more flexible loans we can use now, the better it is for the economy."
The foreign aid allocation proposed in the new ADP is Tk100,000 crore.
Besides, Foreign aid in the proposed ADP has increased by 6.38% and 19.76% as compared to the current fiscal year's ADP and revised ADP respectively.
Meanwhile, Secretary Karmaker said the increase foreign aid in the ADP over the years is largely owed to the increase in the ADP size.
According to experts, the total interest expense of the country will not increase if the proportion of foreign financing in the ADP increases and internal financing decreases.
"Because the foreign loans we are taking are very cheap. On the other hand internal financing has become very expensive," Zahid Hussain, former lead economist at the World Bank's Dhaka, told The Business Standard recently.
