Donors
stall releasing aid
KATHMANDU, August 2
Despite an International Monetary Fund (IMF) agreement
to give about $10 million second tranche of aid to
Nepal as a support through Poverty Reduction Growth
Facility (PRGF) by April 2004, the amount has not
yet been disbursed, due to country’s unsatisfactory
macro-economic performance. IMF will only provide
aid to Nepal if it is satisfied with its reform initiatives.
It is to be disbursed in seven equal tranches over
2003-06. So far, only the first tranche of $10 million
has been released in last November.
If PRGF is continued, it will directly help expedite
the loan available under the $70 million loan under
the Poverty Reduction strategy Credit (PRSC) as
per the 10th Plan. The IMF mission has expressed
serious concerns about the low level of development
by the end of the fiscal 2003-04, totaling about
Rs 32 billion instead of targeted Rs 42 billion
and increased recurrent expenditures.
The donors however have expressed happiness over
revenue collection compared to last year which is
likely to exceed Rs 60 billion for 2003-04. They
were of the opinion that regular expenditures need
to be controlled and development expenses be expanded
to maintain macroeconomic stability.
GDP growth is 3.6 % for 2003-04 despite conflict
and low economic activities. However, growth achievements,
according to donors, is still not sufficient to
maintain macro-economic management on a sustained
basis.
