To mobilise required foreign aid in an efficient and effective manner in order to finance development projects in the prioritised sector; enhance the ownership of Government of Nepal and people of Nepal in foreign aided projects; maximise the benefit of aid; and achieve the ultimate goal of self-reliance through sustainable high economic growth.
Strategic Goal 1. Channelling foreign aid with a demand driven approach towards the prioritised sectors.
Ranking development sectors with their priorities in achieving self-sustained economic growth and alleviation of poverty.
Deepening the interrelationships of priorities.
Separating the project identification from the potential funding source until final selection.
Mobilising aid resources systematically according to development approach.
Streamlining and limiting the task of project identification at the levels of beneficiaries, line agencies and the National Planning Commission.
Basing the project design on existing and potential strength of local institutional and administrative capabilities.
Informing the donors about the national priority sectors and projects/programs regularly
Forwarding request for project/program assistance to donors especially to bilateral donors for the ensuing years only after the due clearance from NPC and line ministries.
Allocative efficiency will be achieved by attempting to align foreign aid with national priority. That will ensure the delivery of outcome envisaged in preparing the project and programme. It will also help raising the return on investments and making development efforts more effective. Moreover, it will enhance the sustainability of the project by involving domestic stakeholders in the process of project cycle.
Strategic Goal 2. Promoting ownership in foreign aided projects
Enhancing participation of national stakeholders in project preparation and implementation.
Project Implementation through separate Project Implementations units (PIU) or Development Boards or committees will be discouraged.
Avoiding direct channelling of foreign aid by passing the Government Budget System.
Promoting the donor community's role as the facilitator rather than implementers.
Incorporating the program of raising the expertise, efficiency and utilisation of local human resources.
Using participation of the local human resource in each of the foreign aided projects.
Identifying the key areas where domestic expertise is scarce and be selective in technical assistance to only those key areas.
No loan will be opted for technical assistance.
Preparing and implementing the plan for each project to phase out technical assistance within the specified time period
Encouraging and ensuring transfer of essential knowledge and technical know-how by placing
Enhancing capacity in project identification, evaluation, selection and implementation
Making activities economically affordable and realistic in terms of budgetary support.
Increased domestic involvement in different stages of cycle of foreign aided projects.
Strategic Goal 3. Reducing burden of external debt
Prohibiting the use of loan amount for study visits.
Ensuring utilisation of foreign loan in projects and infrastructure development promising higher returns on investments.
Analysing the various implications of each new loan before accepting it.
Focusing on loan investment in the areas that help generate private sector activities and promote external sector transactions that enhance the foreign exchange earning capability.
Availing foreign loan facilities in ways that reduce the loan liability of GON occasioned by exchange rate changes and implications.
Minimising the expenditure on consultants and foreign experts out of the loan assistance.
Eliminating unproductive and redundant projects and focusing on key development areas.
Developing criteria for ensuring selection of only those projects that are in line with development priority and sustainable.
Establishing sector-wise and nation-wide merit order of projects and allotting aid resources according to the order to merit of projects
Linking new projects to utilise the stock of past investments
Matching donor's priority and excellence with development comparative advantages and programs in mobilising aid.
Making project activities cost-effective and environment-friendly.
Seeking grants first then only moving for highly concessional loans in searching for new borrowing.
Emphasising co-financing arrangements through grants for financing expenses of overheads and technical support of the projects.
Directing foreign aid toward the objective of increasing revenue mobilisation (such as increasing GDP and employment) and avoiding possibility of substituting revenue mobilisation efforts by foreign aid.
Effecting favourable improvements in the private sector investments through the channelling of foreign aid towards expanding private sector investments.
Utilising existing investment by the provision of adequate O & M expenses
Two outcomes have been envisaged
1. increase in share of grant in foreign aid
2. increased return on investments channelled through foreign loan. That will ultimately lead to relief in debt burden through decreased share of loan in foreign aid and increased capacity of debt servicing due to high returns in investments.
Strategic Goal 4. Improving disbursement ratios
Objective 1. Improving the processing of project documents
Reducing project agreement signing periods.
Improving co-ordination with line ministries in order for rapid finalisation of projects.
Improving communication network between the concern agencies within the Government.
Maintaining effective communication link with donors.
Making project management efficient, sound and scientific.
Making reimbursement function more effective by adopting wide reforms in the reimbursement procedure and practices.
Ensuring timely availability of counterpart funds.
Enhancing decentralised decision-making.
Objective 2. Removing obstacles due to aid conditionalities
Examining conditionalities with respect to critical goals of the project, development strategies, policies and country's realities.
Obtaining support and commitment of all stakeholders to fulfil proposed conditionalities.
Securing formal approval of the competent authority in the case of policy-related conditionalities.
Designing conditionalities in compatibility with the executing agency's institutional capacity.
The disbursement ratio especially for grant assistance will be raised that will result in more increase in net resources transfer and better mix of aid and loan in foreign aid.
Strategic Goal 5. Enhancing good governance in foreign aid coordination and management
Making information available in general about the cost and source of finance of each activity and component of foreign-aided programmes and projects.
Facilitating public flow of information on decisions made with respect to the selection of experts, consultants and key project staff, procurement, sale or auction, prequalification, contract awarding, and with respect to criteria used, individuals involved and processed followed in decision making.
To make available to the interested people pre-feasibility, feasibility, audit, evaluation, performance and other reports of aid-supported activities.
To reflect foreign aid resources in the budget and utilise them through the budgetary process.
To facilitate and assist in public inquiry and set specific time periods for handling requests, dissents and complaints.
Easy access to the information relating to foreign aid be maintained. That will enhance the broad based support in such projects. It will also help enhancing sound financial and managerial practices in foreign aided projects.
Strategic Goal 6. Enhancing the efficiency of the division
Aid coordination and management manual
Regular policy dialogue
Improved and integrated record keeping
Database creation and LAN connection
Rationalising tax exemptions and facilities
Assessing foreign aid effectiveness
Increasing field supervision of the foreign aided projects
Uniformity in the agreements
Establishment of project bank
Keeping up to date overall ODA status and find country's situation.
Finding out the policy and priorities of donors cooperation and communicate it to concerned authorities.
Participate in bilateral and multilateral aid related and seminars
Regular consultation meetings with donor/s on issue of foreign aid.
Availing sufficient space and document storage facility in the division
Establishing an account of foreign aid flow, and exemptions in the Division
Refreshment training on negotiation skills for Officers
Training on Project Analysis for officers
Training on Academic English for officers
English Language Training for Clerks
Establishing a coordination cell to coordinate the sectoral units within the Division.
Increasing field supervision of the foreign aided projects
The overall functioning of the division will be monitored by higher authorities in the Ministry.
The donor community will also evaluate the efficiency in the management of foreign aid. Such evaluative comments will appear in several forums such as NDF meeting. Bilateral and multilateral discussions with donor community, and in reports such as project appraisal mission's reports.
Civil society will also watch the Division's efficiency in doing its business. Their remarks in public forum and press will indicate the success/failure of the Division.