ADP spending to miss targets by wide margin

The government is set to miss its development spending target as well as the goal of raising the use of foreign loans by a large margin in the outgoing financial year, official figures showed.

Owing to the sharp fall in the foreign exchange reserve and limited fiscal space, the government had planned to speed up the execution of foreign-funded projects. It also prioritised government-funded projects and cut allocation.

But data from the Implementation Monitoring and Evaluation Division (IMED) under the planning ministry showed that the government was able to spend Tk 52,788 crore in July-May of 2022-23, up only about 1 per cent from Tk 50,575 crore during the same period a year earlier.

But the target for the entire financial year is Tk 74,500 crore. This means the implementing agencies would have to go a long way in the last month of FY23 to reach the target.

The scenario is also the same in the case of the implementation of the overall annual development programme (ADP): overall development expenditure stood at Tk 146,021 crore in the first 11 months of FY23, down 3.11 per cent from a year ago.

The government was able to spend Tk 52,788 crore in July-May of 2022-23 though the target for the entire year is Tk 74,500 crore

"The situation has not changed," said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, a think tank.

Although the government was supposed to utilise foreign funds more this financial year, the performance has not improved, he said.

"It's definitely a failure for us. But this is not a new problem. Rather, the trend has continued for a long time."

Had the government been able to accelerate the use of foreign loans when it comes to project implementation, it would have created a scope for the country to introduce more projects to be bankrolled by external finances.

Expenditures under the government-funded development rose to Tk 87,877 crore in July-May, up 3.67 per cent from Tk 84,760 crore a year ago.

In the first 11 months, the overall implementation rate of the ADP decreased by 3.11 percentage points to 61.73 per cent compared to the last year.

Among the 15 highest recipients of the development budget, the Energy and Mineral Resources Division was the top performer in July-May as it spent Tk 3,705 crore, which accounted for 92.58 per cent of the fund it received.

The science and technology ministry came second as its ADP execution rate stood at 76.41 per cent while the Bridges Division was placed third with an outlay of 74.12 per cent.

On the contrary, the Health Services Division was the worst performer. Its outlay stood at Tk 3,738 crore, representing 38.17 per cent of the allocation.

Other low performers include the shipping ministry and the Secondary and Higher Education Division.