Nearly one-sixth of all the foreign assistance that comes to Nepal is received through international non-governmental organizations (INGOs), a government report said.
Development Cooperation Report 2013-14, which was released by the Finance Ministry on Friday, states that 16.7 percent of the aid Nepal received during the year was routed through INGOs.
Out of the total aid of $1.24 billion provided to Nepal in the last fiscal, $208 million (around Rs 20 billion) was funnelled through INGOs.
The amount includes funds received by the INGOs from local donor agencies and those generated directly from donors abroad. They received $132 million through residential donor agencies and $76 million directly from donor headquarters abroad, according to the report.
This is the first time that the report has incorporated resources received by the INGOs from donors based locally and abroad. The Finance Ministry said that the move was aimed at bringing transparency in the financing the country receives for its development through government agencies and INGOs.
The financing through INGOs came to light after they started reporting the status of funding at the Aid Management Platform (AMP), a software system that collects information about the status of foreign aid and its utilization in Nepal.
Of around 200 registered INGOs, 131 INGOs registered under the Association of International NGOs in Nepal (AIN) submitted information to the system which the ministry believes covers 80 percent of the total aid flow through INGOs.
“As a huge amount of resources are being spent through INGOs, there should be transparency in the funding they receive and the spending they make,” said Shankar Sharma, former vice-chairman of the National Planning Commission.
Although Development Cooperation Policy 2014 has sought to encourage routing of foreign aid through government agencies, Sharma believes that INGOs and NGOs will continue to be important stakeholders in aid utilization in Nepal.
“As government agencies are failing to spend the available resources, donors will continue to be attracted to NGOs to implement the projects,” said Sharma. “The increasing number of private sector foundations for charity will also boost the flow of aid through INGOs and NGOs.”
As far as the impact of the spending by INGOs and NGOs is concerned, Sharma believes that it has been very good as long as they operate in certain areas. “But when they leave, the impact has not been sustainable in many places,” he said.
Jamie McGoldrick, United Nations resident representative in Nepal has a good impression about the work of INGOs and NGOs.
“The INGOs and NGOs working in government prioritized areas such as health, education and social service are doing a great job as they are operating in areas where the government is not functioning. They are working closely with community based organizations at the local level,” he said.
“The donor agencies have also scrutinized them about their performance and my impression is that the donor agencies are quite happy with the NGO community here.”
Among the INGOs, Save the Children is the largest fund provider which alone disbursed $10.19 million through 21 projects in the last fiscal year, according to the report. The highest amount disbursed through INGOs has gone to education followed by health and women, children and social welfare.
The highest number of INGOs, 26, are engaged in Kathmandu district followed by 18 in Sindhupalchok and 17 each in Kailali and Kapilvastu.
Top 5 sectors to get fund through INGOs
Women, Children& Social welfare $9.26m
Note: Based on resources received from donors’ headquarters excluding the amount received from local donors