Foreign aid to Nepal up 26.9pc in fiscal 2019/20

The International Economic Cooperation Coordination of the Ministry of Finance has launched the Development Cooperation Report, 2020.

DCR, 2020 is a detailed account of development cooperation, both in the form of Official Development Assistance from various bilateral and multilateral development partners and cooperation received from International Non-Governmental Organisations (INGOs) in fiscal year 2019/20, the period from July 16, 2019 to July 15, 2020.

The report presents the composition and analysis of development cooperation received from various bilateral and multilateral development partners during the period and their engagement in various sectors, types and modalities of disbursement.

As per the report, an ODA of $2,003 million was disbursed in 2019/20 compared to $1,578 million in the previous year, an increase of 26.9 per cent. On the other hand, there has been a notable decline in INGO contributions from $215.3 million in 2018/19 to $131.8 million in fiscal 2019/20. Of the total ODA disbursed in Nepal in 2019/20, $512.9 million (25.6 per cent) was disbursed specifically for COVID-19 response and recovery.

The report highlights that of the total ODA, 69.9 per cent was provided as loans, 18.7 per cent as grants and 11.3 per cent as technical assistance in fiscal 2019/20. The increasing share of loans in ODA reflects the result of Nepal’s eligibility in concessional loans from multilateral development banks and institutions. There has been an important shift in the form of an increase in the portion of budgetary support by development partners. The portion of budgetary support has reached 36.9 per cent of total ODA in 2019/20 from 15.2 per cent in 2018/19.

The report also highlights the significant improvement in on-budget channelling of assistance. Of the total ODA, $1,672.9 million (83.5 per cent) was channelled through on-budget in the review period compared to that of fiscal year 2018/19 where 78.4 per cent of ODA was channelled as on-budget funding.

The report emphasises the importance of more integrated cooperation based on the country results framework and use of national systems as well as the possible areas of improvement to enhance the effectiveness of development cooperation in Nepal.

Issuing a press statement on Thursday, the Ministry of Finance said it is thankful to all the development partners, including INGOs, for their continued cooperation in regular reporting and validating their development cooperation information in the AMIS.