Govt plans utilizing a large amount of aid for development projects


The government plans to utilize foreign aid worth Tk 88,024 crore for development projects in the next fiscal year. The amount is equivalent to $10.35 billion and up 39.72 per cent from the annual development programme (ADP) in the outgoing fiscal year.

The total size of the ADP may be fixed at Tk 225,124 crore in the next fiscal year of 2021-22, up from the revised ADP of Tk 197,643 crore.

The next ADP would be finalised by the first week of May, and it would be placed before the National Economic Council for approval.

An official at the finance ministry said the government was looking to increase the allocation of foreign aid in the upcoming ADP as the country was sitting on a huge amount of unused foreign aid.

He said the government could use as much foreign aid as possible as borrowing costs were very low.

Development lenders have granted Bangladesh a higher flow of budget support since last year. 

At the beginning of the current fiscal year, $50.39 billion in foreign aid was available for the government, the highest on record to ride out of the pandemic and the amount kept increasing.  

Meanwhile, the Asian Development Bank (ADB) has already provided $650 million in loans and $7.23 million in grants to manage the socio-economic impacts of the pandemic and support quick recovery. 

The ADB is also processing two programme loans of $500 million each and a $940 million loan for the government’s Covid-19 vaccination programme.

For 2021-2023, the ADB has programmed a $5.9 billion firm and $5.2 billion standby project assistance for Bangladesh, it added.

The World Bank may provide around $6 billion in the current and next fiscal years for vaccine purchase, the health sector, and the economy’s recovery.

Other lenders such as Japan and the Asian Infrastructure Investment Bank have also committed to providing foreign aids.

Again, aid disbursement surged more than 28 per cent to $8 billion in 2019-20, the highest in the country’s history.

The government’s own contribution in the next ADP may be increased to Tk 137,100 crore from Tk 134,643 crore in FY21.

The local government division is likely to get an allocation of Tk 34,204.04 crore and the road transport and highways division Tk 28,131.67 crore.

The power division may be allocated Tk 25,553.76 crore, the science and technology ministry Tk 20,723.86 crore, and the railways ministry Tk 13,619.64 crore.

The health services division is to get Tk 13,125.19 crore from the ADP.

The health services division received Tk 6,447.78 crore as project aid from the ADP and used Tk 664.94 crore, which is 10.31 per cent of the allocated fund.

The division was given Tk 5,531.56 crore from the state treasury. But it managed to spend Tk 1,850 crore, which is 33.45 per cent of the allocation, one of the lowest among the ministries and divisions.




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