Share of on-budget support rising in ODA

KATHMANDU: On-budget official development assistance (ODA) to Nepal recorded a sharp 23.5% growth in fiscal year 2024/25.

According to the Development Cooperation Report, 2024/25, released by the Ministry of Finance, Nepal received $1.61 billion in ODA during the review year. Of this, $1.36 billion, or 84.94% of the total support, was provided as on-budget support, while $242 million, or 15.06%, came as off-budget assistance.

Nepal had received $1.11 billion on-budget ODA in the previous fiscal year, a 4.1% growth compared to  2023/24. In contrast, off-budget support declined by 15.1% in the review year from $285.1 million in 2023/24.

According to the finance ministry, rising on-budget support and falling off-budget support indicate a move toward using the national budget and treasury systems for DOA by development partners.

On-budget ODA refers to support provided by development partners that is included in the recipient country’s official national budget and financial management systems. This allows the recipient government greater oversight into its planning and allocation processes. The off-budget ODA, on the other hand, bypasses the recipient government’s budget and systems and is typically managed directly by donors, NGOs, or implementing agencies.

Within the on-budget envelope, $847.5 million was disbursed through the national treasury system. This accounted for 62.11% of the total on-budget ODA. On-treasury disbursements surged by 63.3% year-on-year, a sharp rise from the 21.2% growth recorded in the previous fiscal year.