Experts and economists urged ensuring accountability and transparency for grant-dependent projects to ensure the best value of foreign grants.

Grants coming for development projects in Bangladesh from several foreign agencies mostly goes for revenue expenditure for consultants, foreign trips, training and salaries, leaving little for real service delivery.

An analysis of five projects has revealed the state of foreign grant assistance provided for the country’s uplift in various sectors in need.

Analyzing the five projects – two ongoing, two are newly proposed and another completed – shows that a share of 76 per cent to 98 per cent of grant allocations are being spent for revenue expenditure, while a little amount of grants go for capital spending which helps create any asset.

Such five projects projected a combined spending worth Tk5.12 billion, while Tk4.74 billion, 92.59 per cent of the total, projected for revenue spending.

Officials from the Planning Commission and the Economic Relations Division (ERD) said that the development partners reduced grants for infrastructure projects following Bangladesh’s graduation from Lower- Income Countries (LIC) status to Lower Middle- Income Country (LMIC) in 2013.

They said that flow of grants got reduced significantly and continued only for technical -assistance projects that prioritize study, research and consultancy.

However, experts and economists urged ensuring accountability and transparency for grant-dependent projects to ensure the best value of foreign grants.

Some Examples

Officials of the Planning Commission said that the Ministry of Labour and Employment proposed a project worth Tk828.30 million to ensure social protection for additional 150,000 workers in the textiles and leather sectors. However, Tk815.50 million, or 98.45 per cent of the project cost, is proposed as revenue spending.

Some Tk 294.00 million, 35.49 percent of the project cost, is proposed for consultants, while over 18 per cent is proposed for training.

Germany-based GIZ would provide grants for the project. And Tk 12.60 million is proposed under the project for office rent for the GIZ.

Local government division proposed a project titled “GO4IMpact-Improved Climate Resilient Public Services Delivery through Local Government Institutions in Water and Solid Waste Management” with a support worth Tk 906.96 million from Swiss Agency for Development and Cooperation.

The project, aimed at supplying improved water for 50,000 people living in two Paurasavas and 40 Unions in two districts, offers 76.73 per cent as revenue cost.

Some Tk 155.43 million, or 17.14 per cent of the total cost, is earmarked as salaries, while Tk 99.15 million, 10.93 per cent, for seminar and conference. A foreign training for 30 people costs Tk 19.47 million.

“Adaptation to Climate Change into the National and Local Development Planning-II (ACCNLDP-II)” project, aimed at integrating climate-risk information into national planning, project evaluation, and enhancing the capacity of planning and evaluation processes to reduce disaster risks, spent Tk 393.39 million as revenue spending.

Development of Local Capacity

Some 96.32per cent of the project cost from a total of Tk 408.44 million went for salaries, wages and training.

The EU and the UNDP are providing Tk2.59 billion for a project titled “Activating Village Courts in Bangladesh Phase III Project” undertaken by the local government division.

Some Tk2.46 billion, or 95.17 per cent of the total, is being spent for revenue purpose and Tk 1.22 billion, 47.10 per cent of total grants, spent for consultants from home and abroad.

Targeting skills building for out-of-school adolescents, this Tk395.77-million project spends 96.02 per cent of its funds on revenue. Management costs for institution-based courses account for Tk 266.33 million, representing 67.29 per cent of the total.

Dr Mustafa K Mujeri, former DG at the BIDS, says the overwhelming focus on revenue expenditures such as consultancy, salaries, and foreign tours may undermine the sustainability of these projects.

“While consultancy ensures access to expertise, excessive reliance could limit the development of local capacity and infrastructure. Similarly, high salaries for international staff and training expenditures abroad might reduce the funds available for direct service delivery,” he adds.

Representational Image from Wikimedia