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NGO funding faces sharp decline

Saif Uddin | August 25, 2023 00:00:00

The flow of foreign funds to non-governmental organisations (NGOs) in the country experienced a substantial contraction during the previous fiscal year, coinciding with Bangladesh's graduation into a developing country.

The latest available data by the NGO Affairs Bureau reveals a nearly 30-per-cent reduction, with commitments for NGO funding decreasing to $720 million in FY23 - down from $1.03 billion during the preceding fiscal year.

Experts and stakeholders point to several factors contributing to this decline, including Bangladesh's current advancement to a middle-income country, donors diverting their attention to other least-developed countries (LDCs) requiring aid, and a shift towards assisting refugees displaced by the Ukraine-Russia conflict.

This reversal marks a departure from the prior trend, which had witnessed a sudden surge in foreign funds since FY18 when the nation provided shelter to nearly a million Rohingya refugees displaced from Myanmar.

Accompanying the decline in funding commitments, disbursements to NGOs also experienced a downturn of around 10 per cent over the last fiscal year.

The aggregate funds received by NGOs amounted to $741 million in the fiscal year 2022-23, a decrease from the $821 million received in the previous year.

The inflow of grants from foreign entities, excluding United Nations (UN) organisations, requires approval from the NGO Affairs Bureau - a regulatory body operating under the jurisdiction of the Prime Minister's office.

Since the independence of Bangladesh, various NGOs have been working for the country's socio-economic development along with the government. The role of these organisations in rural socio-economic development is remarkable.

However, after 50 years of independence, there has been a great change in the socio-economic sector of the country.

Contact, Muhammad Abul Hossain, senior market specialist of WorldFish in Bangladesh, explained that as Bangladesh advances its economic standing, NGO funding is dwindling due to the country's aspiration for increased self-reliance on various fronts.

"The donors are well aware that Bangladesh is in a course to graduate as a middle-income country in 2026," he said.

Bangladeshi NGOs are currently securing funds primarily for technical assistance rather than humanitarian aid, commented Hossain.

"The grant amount allocated for technical projects remains as low as 25 per cent of a humanitarian assistance programme," he noted.

Hossain suggested that local NGOs should now focus on bolstering their social enterprises to sustain their developmental efforts for the country.

In the past fiscal year, the NGO bureau approved 2,007 projects, marking a decline from 2,061 in the preceding year. Data  available as of July this year indicates that nearly 2,500 NGOs, including 267 foreign entities, are contributing to the socio-economic progress of the country.

According to Nur Hossain Siddique, a development activist, donors are increasingly directing their attention towards LDCs in Africa, while Bangladesh is being branded as an economic success story.

"Besides, numerous nations are grappling with urgent humanitarian needs, such as the refugees stemming from the Russia-Ukraine conflict," he observed, noting that Bangladesh used to receive substantial funds from European donors.

Siddique added that developed countries - the homelands of major donors - are also contending with economic sluggishness, naturally leading to curtailed charitable activities.

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