Slow disbursement of aid hits projects

Kathmandu, October 8 :

The National Planning Commission (NPC) has stated that disbursement of aid to donor-funded projects has been found to be slow, a fact that needs to be improved.

An assessment of the implementation of the Tenth Plan carried out by NPC in its 2006 report stated that after the escalation of conflict, there was low absorption of available

aid. NPC has categorically mentioned that the government is in need of assistance that is both flexible and quickly available especially for funding programmes that seek to produce quick results.

Disbursement of some project loans was stalled in 2005, said NPC which has put pressure on the fiscal side of the economy.

It observed that Nepal’s debt servicing obligations are also growing with maturity of

more loans. NPC has raised concerns over the ‘weak aid effectiveness’ and called for further improvement.

NPC has also stated that Nepal has made some progress in aid coordination and harmonisation of overall programmes, sectoral and financial management levels. The political situation after February 2005 resulted in disruptions in aid flows and management. The resulting unpredictability also affected development planning and execution, according to NPC.

NPC assessment has stated that Nepal has little choice but to continue the policy and development management reforms for enhancing development effectiveness because otherwise, the inequalities that are there in the Nepali society will continue to grow and fuel conflict.

It has warned that continued conflict could cause greater damages to development infrastructures depriving more people, mainly the poor, of basic services and further delaying the recovery and reconstruction of the economy.

It has been stated that there are gaps between what has been planned and the achievements.

The NPC survey has clearly stated that Nepal’s development partners can help reform the process by stepping back and letting the government take full charge of the development.

At the same time, donors can also help the process by finding ways to make aid flows more predictable and readily available for addressing the fast changing needs on the ground, while also moving towards aid harmonisation.