Disbursement of foreign loan rises by over 100pc
FE Report | Thursday, 5 June 2008
Disbursement of loan by the donor agencies has risen by more than 100 per cent rise in the outgoing fiscal compared to the last fiscal, but the amount is still about 50 percent of the commitment, said an economic relations division report.
According to the ERD report, the amount that has already been disbursed until April of the outgoing fiscal is higher by $612 million over the last fiscal when the disbursed figure was $512 million.
Some 24 donor agencies disbursed loans worth US$ 1127 million until February although the total commitments were worth $2158 million for 2007-08 fiscal.
From July 2007 to April 2008, the country has signed deals with the donor agencies for loans worth $2056.00 million.
Last fiscal, the amount was $1191.00 million.
The big gap between commitment and disbursement has been attributed to tough conditions by the donor agencies and slow implementation of the projects.
"Both the reasons have long been persisting and are making the big gap," said a senior economic relations division (ERD) official.
Apart from few loans such as development support credit by the World Bank that are directly linked with the annual budget, most are project based and their disbursement depends on the rate of implementation and quality.
"The donor agencies often bring allegations about poor quality and slow implementation rate," he said, adding that such situation resulted in slow pace of loan disbursement.
Until June of the outgoing fiscal, there is a possibility for signing deals between the country and the donor agencies for $300 million loans, said the study.
Focusing on the debt service liability, the report said the country had to repay $353 million, including $87 million as interest until the first eight months of the outgoing fiscal.
The net foreign loans until February stood at $769.32 million, it added.
Last fiscal, the net foreign loan received was $402 million.
A finance ministry official said loan disbursement by the donor agencies has remained static in the last one decade although the size of annual budget and development programme have been going up significantly.
Due to static growth in foreign loans, the government has to rely on domestic borrowing heavily to finance budget deficits, said the official.
In the outgoing fiscal, it had to borrow some Tk 140 billion from domestic sources for deficit financing. The additional subsidies on food, fertiliser and fuel pushed up the budget deficit to 4.8 per cent from projected 4.2 per cent.
According to the ERD report, the amount that has already been disbursed until April of the outgoing fiscal is higher by $612 million over the last fiscal when the disbursed figure was $512 million.
Some 24 donor agencies disbursed loans worth US$ 1127 million until February although the total commitments were worth $2158 million for 2007-08 fiscal.
From July 2007 to April 2008, the country has signed deals with the donor agencies for loans worth $2056.00 million.
Last fiscal, the amount was $1191.00 million.
The big gap between commitment and disbursement has been attributed to tough conditions by the donor agencies and slow implementation of the projects.
"Both the reasons have long been persisting and are making the big gap," said a senior economic relations division (ERD) official.
Apart from few loans such as development support credit by the World Bank that are directly linked with the annual budget, most are project based and their disbursement depends on the rate of implementation and quality.
"The donor agencies often bring allegations about poor quality and slow implementation rate," he said, adding that such situation resulted in slow pace of loan disbursement.
Until June of the outgoing fiscal, there is a possibility for signing deals between the country and the donor agencies for $300 million loans, said the study.
Focusing on the debt service liability, the report said the country had to repay $353 million, including $87 million as interest until the first eight months of the outgoing fiscal.
The net foreign loans until February stood at $769.32 million, it added.
Last fiscal, the net foreign loan received was $402 million.
A finance ministry official said loan disbursement by the donor agencies has remained static in the last one decade although the size of annual budget and development programme have been going up significantly.
Due to static growth in foreign loans, the government has to rely on domestic borrowing heavily to finance budget deficits, said the official.
In the outgoing fiscal, it had to borrow some Tk 140 billion from domestic sources for deficit financing. The additional subsidies on food, fertiliser and fuel pushed up the budget deficit to 4.8 per cent from projected 4.2 per cent.