According to authorities in the finance ministry, the Asian Development Bank (ADB) is anticipated to provide US $ 800 million to Bangladesh in the upcoming fiscal year 2024–2025 as budget support to guarantee the nation’s seamless removal from the least developed country (LDC) category.
The ministry representatives stated that the funding for budget support would be given out in two US $ 400 million sub-programs, subject to the execution of many policy changes, the majority of which deal with revenue policy.
To obtain the financial assistance required to reach these goals, the Government is also prepared to fulfil all requirements following those of the World Bank and International Monetary Fund (IMF).
To improve the nation’s economic structure and enable a seamless transition from LDC status, as well as to relieve strain on reserves and boost revenue, the administration has requested this help.
In an online Zoom meeting, the Government also approved the majority of the terms set forth by the Manila-based lender to obtain this loan. This was the Government team’s first meeting.
Leading the Government delegation during the meeting was Ziaul Abedin, additional secretary of the Finance Department’s Macroeconomics Division. He is in charge of a twelve-person team tasked with completing the program’s policy structure and accelerating the ADB’s recommendations for implementation.
The meeting was attended by representatives from the ADB Head Office, the Finance Department, the Prime Minister’s Office, the Economic Relations Department, Bangladesh Bank, the National Board of Revenue (NBR), the Ministry of Commerce, the Ministry of Industry, and other related departments.
According to representatives of the Ministry of Finance, the next ADB mission is set for 7th July; at that meeting, the timing of the budget support loan delivery may be decided.
Prior to this, Bangladesh was subject to requirements from the Washington-based financial institution to raise the tax-to-GDP ratio by 0.5 per cent for the years 2023–2024 as part of the US $ 4.7 billion loan agreement with the IMF. It must rise by 0.5 per cent and 0.7 per cent in the ensuing two fiscal years, respectively.
According to ADB data, it has provided an average of US $ 2 billion in aid annually since 2016. This includes budget support. So far, ADB has committed 726 public sector loans, grants, and technical assistance to Bangladesh, amounting to US $ 31.8 billion. ADB’s sovereign portfolio currently has 75 loans and four grants ongoing in Bangladesh. These loans and grants amount to US $ 13 billion.