August 28: At a time when the budget and programmes brought by the government are being criticized for being more ambitious than implementation oriented, it has been found that the government has always set ambitious targets for foreign loans as well.

Looking at the goals set by the government and the status of achievement in recent years, the goals have been proven to be ambitious. When comparing the foreign loan target taken in the budget of the last five years with the actual realization, it seems that the government has not been able to meet the target even in a single fiscal year.

Compared to the target set by the budget in the last five fiscal years, only 51.63 percent of foreign loans have been received on an average. In the last fiscal year (FY) 2079/80, the government had set a target of taking foreign loans of Rs 242.26 billion. However, the government only received foreign loans of Rs 102.12 billion last year. This is just 42.15 percent of the target.

According to the Public Debt Management Office, looking at the situation from FY 2071/72 to FY 2079/80, Nepal’s foreign loan target was the lowest in FY 2073/74. It seems that only 29.64 percent of the target met in the review year.

Similarly, in the fiscal year 2072/73, the country received the maximum loan in proportion to the target. In that particular year, Nepal received foreign loans equivalent to 74.68 percent of the target. The foreign loan target realization was the lowest in FY 2079/80 after FY 2075/76.

It seems that the government is more reliant on bilateral relations while seeking grants while it relies more on multilateral donors (international banks and organizations) for loans.

The government did not receive loans as per the target even in the last fiscal year.

Meanwhile, the government has set a target of raising foreign aid equal to Rs 262 billion in the current fiscal year 2080/81. The government intends to acquire Rs 49.94 billion grants and Rs 212 billion loans from more than two dozen donors. Since such a target was not achieved in the previous years, it is clear that the government will not be able to collect the debt as stated this year too.

The latest report of the Public Debt Management Office has mentioned the underutilization of foreign loans and the inability to objectively determine the targets as the prime reasons for the government’s failure to acquire loans and grants as per the target.