The use of foreign aid in the first four months of the fiscal year dropped 8.80 percent in spite of the ambitious utilisation target set by the government.
The government had set about mobilising $7.5 billion of foreign aid at the start of the fiscal year, which would be the highest in the country's history.
But, as of October, the government managed to put to use only $1.33 billion, according to data from the Economic Relations Division.
The development can be viewed as the ministries and divisions reverting to type: last fiscal year they expended a record amount of $6.1 billion, which was double of what they managed each year between fiscal years 2012-13 and 2016-17.
The reason for the decline in foreign aid utilisation is the slowdown in implementation of the annual development programme (ADP), said an official of the finance ministry.
He said the pace of ADP implementation would pick up in the second half of the fiscal year.
“We are hopeful that we will be close to the target by the end of the fiscal year,” he added. Russia committed $11.38 billion for the Rooppur nuclear power plant project, the work on which is on schedule.
Of the amount $1 billion has been spent in fiscal 2017-18; the rest will be spent by fiscal 2023-24, when the project is supposed to be completed.
This year, disbursement for the project will be more than last fiscal year's, according to the finance ministry official.
Of the amount used in the first four months of the fiscal year, the World Bank provided $305 million, the Asian Development Bank $315 million, Japan International Cooperation Agency $273 million and Russia $63 million.
Other than utilisation, foreign aid commitment from the development partners also slumped during the period: by 36 percent.
Foreign aid commitment was $3.61 billion, most of which came from the WB and the ADB. The WB committed $1.11 billion and ADB $2.18 billion.
The reason for the decline is that in the last couple of years big amounts were committed by two bilateral partners for a number of mega projects, which bloated the figures, said an ERD official.
It is unlikely that the foreign aid commitment this year would be the same as in the previous two years.
“We are now laying more emphasis on implementation of the aid that is already piled up in the pipeline,” he added.
Before fiscal 2009-10, Bangladesh used to receive aid commitment of $1 billion to $2 billion every year. From fiscal 2009-10 the amount jumped to $5 billion and it went on to hit $7 billion in fiscal 2015-16.
But in fiscal 2016-17 the amount more than doubled thanks to Russia's commitment to Rooppur nuclear power plant project. In fiscal 2016-17, foreign aid commitment stood at $17.96 billion.
Last fiscal year the country received foreign aid commitment of $14.86 billion, with China and India accounting for $4.35 billion and $4.5 billion respectively.
Thanks to the huge amount of aid commitment, unused foreign aid in the pipeline stood at $46.79 billion at the end of October. On June 30 it was $44.51 billion.
