Nepal’s ODA Landscape Shifts: Development cooperation report unveils 15.7% reduction in FY2021/22

Press Release

18 January 2024
Kathmandu, Nepal

The new Development Cooperation Report (DCR) for the fiscal year 2021/22, released by the Ministry of Finance has revealed a substantial 15.7% reduction in Official Development Assistance (ODA).

The report notes a marked decrease in ODA as a proportion of Nepal’s GDP, finding that the ODA to GDP ratio, which averaged 5.8% over the past decade, fell by 2.2 percentage points to 3.5% in FY2021/22. This decline in total ODA disbursements, from USD 1.7 billion to USD 1.4 billion, signals an important shift in Nepal’s development financing environment, reflecting the changing dynamics of international assistance. It captures both on-budget and off-budget disbursement of ODA through the Aid Management Information System as reported voluntarily by Development partners. Issued by the International Economic Cooperation Coordination Division, Ministry of Finance, the report is a collaboration between the Ministry of Finance and the United Nations Development Programme.

The health sector emerged as the largest beneficiary of ODA, receiving USD 241.5 million. This allocation underscores the heightened focus on health amidst the global pandemic. Furthermore, the report highlighted significant investments in other key sectors, including education, financial services, reconstruction, and energy, aligning with Nepal’s strategic development priorities.

In response to the pandemic, funding specifically earmarked for COVID-19 relief and recovery surged, totalling USD 239.8 million. This represents a significant increase from the previous fiscal year, demonstrating the international community’s commitment to supporting Nepal during these challenging times.

The report also noted a revival in ODA targeting gender equality, reaching approximately USD 505 million in FY2021/22.

“This annual publication aims to provide an insightful analysis of Nepal’s international development assistance landscape, leveraging data primarily collected through Aid Management Information System and verified by respective development partners,” said Joint Secretary at MoF Shreekrishna Nepal. “As always, our goal in publishing this report is to strengthen aid transparency and mutual accountability between the Government of Nepal and our valued development partners.”

The findings of this report, derived from the Aid Management Information System (AMIS) and verified by respective development partners, offer valuable insights for resource allocation and for shaping evidence-based policies and strategic decision-making. The publication of this report was supported by the Effective Development Financing and Coordination II (EDFC-II) project, funded by the UK Foreign, Commonwealth and Development Office (FCDO) and the United Nations Development Programme.

The full text of the report is available for download at: Ministry Of Finance (mof.gov.np)