Vol. 5 Num 159 Sun. October 31, 2004  
Front Page

Ministries hobble on foreign fund use
ADP review shows 5 key ministries could spend less than 10pc of their share

The Finance Division will not release domestic funds to ministries that do not utilise foreign aid after it was found that a number of key ministries performed poorly in utilising external assistance.

"We will stop releasing local components if they (ministries) do not spend the foreign components (funds), " he said.

According to statistics presented at the meeting at the planning ministry, only 10 percent of the total foreign components were released in the first quarter, with the Ministry of Post and Telecommunication failing to spend anything.

The Ministry of Industries could spend as low as less than 1 percent of the foreign component, the Ministry of Health 1 percent, the Ministry of Education 2 percent, the Ministry of Rural Development and Co-operatives 5 percent and the Ministry of Communications 8 percent.

Bangladesh saw a dip in foreign aid by 52 percent in the last fiscal year compared to the previous year because of poor capacity to utilise foreign aid.

"Many ministries exhaust local resources but fail to spend foreign aid as they are reluctant to fulfil conditions attached by donor agencies before releasing foreign aid," Saifur said.

"This does no good to the country given the trouble we have to take to get foreign aid, which gets lapsed on non-utilisation."

Saifur has asked the line ministries to come up with figures on their utilisation of foreign aid in the second quarter at the next meeting.

Yesterday's review meeting on the ADP implementation status in the first quarter of the current fiscal found that 15 ministries have been allocated Tk 18,181 crore in the Tk 22,000-crore ADP. The finance ministry has released some Tk 2,658 crore or 24 percent of the local component (11,154 crore) for the ministries.

The 15 ministries have utilised Tk 2,101 crore or only 12 percent of the total allocation between July and September this fiscal year. They spent Tk 1,417 crore or 13 percent of the domestic resources and Tk 684 crore or 10 percent of the foreign component.

On allegations that non-release of funds by the finance ministry has slowed down the rate of ADP implementation, the finance minister said no project implementation work has been stalled because of funds being unavailable. "We have released 24 percent (of local) funds but the ministries have utilised just 13 percent," he said.

Saifur said that as many as 775 of the 869 projects taken in the ADP have been approved and the ministries can spend 89 percent of the allocation without approval of the finance ministry.

The finance minister expressed dissatisfaction at the poor rate of project implementation in the first quarter by the ministries including communication and health, meeting sources said.

"You go around saying that you cannot spend money as the finance ministry does not release funds. (But) we have released about Tk 500 crore, you have spent only about Tk 200 crore," the sources quoted Saifur as telling the officials of the communications ministry.

"The implementation capacity of our line ministries has been poor since the Pakistan period, which needs to be raised," he told reporters. Asked why the capacity has not been improved despite a raft of measures taken by the government, he said, "You better ask the prime minister about that."

Meeting sources said the ministries blamed the July-August floods on the below-par project implementation rate when the finance minister asked them about it.

The health ministry was allocated Tk 1,954 crore in local and foreign components and the finance ministry released Tk 206 crore or 27 percent in local components. The ministry has spent about Tk 26 crore or 3 percent of the domestic resources and Tk 14.91 crore or 1 percent of the foreign funds in the first quarter.

The communications ministry received an allocation of Tk 2,967 crore in local and foreign components and the finance ministry released Tk 487 crore in local components. But it has spent Tk 191 crore of the local component and Tk 97 crore of the foreign funds.

The post and telecommunication ministry spent Tk 13 against a local component allocation of Tk 520 crore.