Implementation rate of the Annual Development Programme (ADP) is yet to reach the pace of pre-Covid years mainly due to slower spending on foreign-funded projects.
With the improving pandemic situation, ADP spending from state funds has increased, while spending from foreign aid funds has dropped in comparison to previous years, reveals an analysis of Implementation Monitoring and Evaluation Division (IMED) data.
In the first five months (July-November) of the current fiscal, the ADP implementation rate was 18.61%, whereas, in 2017-18 and 2018-19 the rate was 20.11% and 20.15% respectively.
During the pre-Covid fiscal years of 2017-18 and 2018-19, spending from foreign funds in the first months were 22.59% and 21.62% respectively. In the first five months of the current fiscal it was 16.23%, and an almost similar rate in the previous fiscal year, according to the latest IMED report.
Spending from state funds during pre-Covid fiscal was over 18%, which has gone up to 20% after the pandemic situation improved.
In the wake of the Covid-19 pandemic, supply chains were hard hit on a global scale. After the first quarter of 2020, when the coronavirus started to wreak havoc across the world, many foreign experts and personnel, involved in multiple development projects in the country, were stranded in different countries. Later, when the Bangladesh government imposed a lockdown with the worsening Covid situation, the ADP implementation was hindered.
Experts think, in the interest of reviving the economy and creating employment the government has no other alternatives but to increase investment. Failing to spend in sectors including health, education and agriculture, the economic development will suffer.
Besides, private investment will not increase if government investment does not, they said, stressing that a planned and quality implementation of ADP in the post-Covid time is imperative.
"In the fight to recover from the pandemic and revive the economy, spending has not increased in sectors that need more investment. There was a need to increase the quality of expenditure in the health and education sectors," Towfiqul Islam Khan, Senior Research Fellow, Centre for Policy Dialogue (CPD) said.
According to the IMED report, the health sector is one of the priority sectors for the government, especially in the Covid situation.
The Health Service Division, through which the health sector funding is executed, was able to spend only 4.46% of the foreign aid allocation as of November of the current fiscal.
Average ADP implementation has also declined due to low spending from the foreign aid allocations to the health sector. In the first five months of the current fiscal, the health service division managed to spend 6.43% of the total allotment from both the government and foreign funds.
With this pace of implementation at the outset, there are concerns about whether a significant portion of the total allocation could be spent by the end of the fiscal year.
Despite the poor state of the health sector, which was apparent during the pandemic, the Health Service Division could not spend 42% of the allocation at the end of the last fiscal year 2020-21.
Health Service Division officials said there were complications in the implementation of some projects. Most involved in projects were doctors, who according to the officials, lack experience in expenditure or construction of physical infrastructure, affecting timely project implementation.
The Ministry of Shipping, one of the ministries with highest allocation, is lagging behind in implementing the ADP. With projects like infrastructure development of Payra port, capacity expansion of Mongla port and several projects at the Chattogram port, the ministry only 8% of the allotment. From foreign fund allocation it spent only 5.66%
Dr Sayema Haque Bidisha, research director, South Asian Network on Economic Modeling (SANEM) said the ministries and departments have failed to address the key problem, which is to ensure the implementation of ADP as per targets while maintaining quality from the beginning of a fiscal year.
To improve the ADP implementation pace, Dr Sayema suggested strengthening of the monitoring system and taking immediate steps for necessary reforms.