Nepal Development Cooperation Report 2019/20: Key Highlights

This blog summarizes the key highlights from the latest Development Cooperation Report 2019/20.

The Development Cooperation Report is a comprehensive documentation of the foreign aid allocation through Official Development Assistance (ODA) and International Non-Government Organizations (INGOs) drawn from the Aid Information Management System (AIMS). AIMS is an improved system of Ministry of Finance (launched from September 2019), which is upgraded from the previous system, Aid Management Platform (AMP).

Here are some of the highlights from the latest report covering fiscal year 2019/20.

  • ODA received: Total Development Assistance received was 1793 million USD. The majority of ODA was provided as loans.
  • Share of the total budget: In FY 2018/19, ODA made up 24% of the national budget, increasing slightly from the previous year (22%). Despite an overall increase in the amount of development cooperation provided to Nepal, its share of the total budget remained low due to Government efforts in domestic resource mobilization.
  • ODA disbursement: The ODA disbursed in FY 2018/19 was made up of 60% (944 million USD) loans, 27% (424 million USD) grants and 13% (211 million USD) technical assistance (TA).
  • Highest disbursing development partners: The highest disbursing development partners as per type of assistance are: China for Grants (105, 971, 037 USD), World Bank for Loans (502,702,220), UK for technical assistance (65, 311, 584).
  • Aid Fragmentation: Education sector received the largest volume of support (15% of total support), followed closely by energy (14%) and then peace and reconstruction (10%), local development (8%) and financial sector reform (7%). Sectors receiving the lowest volume of support are supply (0.005%), land reform & survey (0.01%), youth, sports & culture (0.02%), industry (0.02%), revenue & financial administration (0.05%) and population (0.09%).
  • Local Disbursement: 66% of total ODA was disbursed at the national level and 34% at the district level in FY 2018/19. In terms of provincial comparison, Province 3 has the highest disbursement in part, to its inclusion of the country’s capital city and several large post-earthquake reconstruction projects.
  • Top 5 bilateral partners: China, the United Kingdom, Japan, the United States of America and India, collectively contributing 33% of total ODA disbursements.
  • Development aid through INGOs: Volume of disbursement from INGOs’ core funding increasing significantly to 215 million USD in FY 2018/19 from 110 million USD in FY 2017/18. Save the Children was the highest disbursing INGO in FY 2018/19, with annual disbursement reaching 33 million USD. Other high disbursing INGOs were the German Nepalese Help Association (19 million USD), World Vision International (13 million USD), Good Neighbors International Nepal (12 million USD) and Oxfam Great Britain (12 million USD).
  • Gender Analysis: 39% of total ODA disbursements (612 million USD) made either a direct or indirect contribution to gender equality in FY 2018/2019, representing a decrease from 45% in FY 2017/18.

Key Recommendations from the report:

  • Strengthening the linkages between development planning and the management of development cooperation.
  • Addressing fragmentation through stronger Government leadership.
  • Promoting increased use of country Public Financial Management (PFM) systems.
  • Promoting increased use of data for decision making.
  • Exploring ways in which development cooperation resources can be used to leverage new sources of finance.

Access the full report here.

Cover Image Courtesy: ADB

Blog Contributor: NIRC team

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