Muhith proposes to set aside Tk 1 billion to better utilise foreign aid

Finance minister AMA Muhith has proposed an allocation of Tk 1 billion in the new budget for structural reforms to boost foreign aid utilisation.

This is for the first time any such allocation has been proposed in Bangladesh’s national budget.

Muhith presented a Tk 3.41 trillion budget for the next fiscal in Parliament on Thursday.

“Foreign aid utilisation rate is fairly low. In this setting, we are carrying out structural reforms in the project design and execution stages,” he said.

“We are setting aside Tk 1 billion in this year's budget for this purpose.”

He said the government was also working on preparing a project implementation manual and giving training to project workers.

“We have also decided that each project will have one project director (PD). No officer will be appointed as the project director of more than one project.

“Moreover, the PD will be appointed during a project’s preparatory stage. For this, a pool of project directors we planned long ago will be put in place within the next fiscal year,” he added.

The finance minister said, “Augmenting investment each year is crucial for capital accumulation. In this respect, both public and private investments have a vital role to play.”

The current total investment, in terms of GDP, stands at 29.4 percent, which is insufficient to take the GDP growth to 8 percent in the medium term.

“We are trying to raise public investment each year, but execution of the Annual Development Programme falls short of expectation due to lack of implementation capacity,” he said.