Foreign aid utilisation to go up: Minister

The militant attack at a Gulshan café at the beginning of the current fiscal year slowed down the utilisation of foreign aid-funded projects, Planning Minister AHM Mustafa Kamal said yesterday.

Foreign aid utilisation will gain momentum soon as confidence is being restored, he said.

Many foreigners, especially those who were involved in mega projects like mass rapid transit and Padma bridge, had left the country after the attack in July last year, he added.

“So, the implementation of the projects was hampered. It's not that we do not have the capacity to utilise the funds,” Kamal said at a press meet at the planning ministry.

He was explaining the ministry's position after media reports on unused foreign aid in the pipeline that reached a new high of $36.54 billion.

The government has tightened the security system at every donor-funded project after the Gulshan attack, he said.

“They have come back after the situation has improved. Implementation of the projects has resumed, and so, the utilisation scenario will improve.”

In the first seven months of the current fiscal year, $14.67 billion was received in new commitments, while $1.47 billion was disbursed and $13.2 billion remained unused.

Unused foreign aid in the pipeline was $21.99 billion on June 30 last year.

“We did not fail to pay back the loan or the interest,” Kamal said.

On the requirement of 30,000 megawatts of electricity by 2030, the minister said the government is considering not to set up power plants with foreign loans, to reduce the country's dependency on aid.

He said huge investments are also needed in infrastructure, education and health to improve these sectors further.

“The investment to GDP ratio may cross 30 percent after this fiscal year, which was 29.65 percent at the end of last fiscal year,” Kamal said.

The planning ministry will place a revised annual development programme (ADP) at a meeting of the National Economic Council today for approval.The minister, however, did not disclose any number on the revised ADP.

This fiscal year's ADP size is Tk 123,546 crore and in the first seven months, the implementation rate was only 33 percent, which was still a record high.