Out of the total grant of 659 million dollars mentioned in the 5-year strategic agreement between the government of Nepal and USAID, 71.7 million dollars are in the government budget and 587.3 million dollars are given to organizations.
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With the suspension of grants coming through the United States Agency for International Development (USAID), extra-budgetary programs have been most affected in Nepal. According to the Ministry of Finance, there are very few US grant programs in Nepal that are included in the budget.
USAID had last agreed on a 5-year strategic partnership with the government of Nepal on May 15, 2022, providing a grant of 659 million US dollars.
According to Mahesh Bhattarai, spokesperson of the Ministry of Finance, 71.7 million US dollars (about 10 percent) of the agreed amount is to be included in the Nepal government's budget. The remaining 587.3 million US dollars are spent without being included in the budget (off-budget of treasury). "USAID mobilizes support in Nepal in two ways, on-budget on treasury and off-budget of treasury," spokesperson Bhattarai said, "48 percent of on-budget grants have been used so far."
US grants are included in the annual budget under the program run by the government on agriculture, health, education and inclusive policy reforms. 25 million dollars have been allocated for health projects, 20 million dollars for agricultural projects, 25 million dollars for education and 7 million dollars for inclusive policy. Finance spokesperson Bhattarai said that 52 percent of the allocation grant has yet to be spent on that program.
USAID spends non-budgetary funds through various organizations. But the Ministry of Finance does not have the exact details. USAID must submit the details of its expenses through the organization annually to the Ministry of Finance. But now the complete details have not been received," said Bhattarai, spokesperson of Artha.
Ramprasad Ghimire, president of non-governmental organizations, said that 300 organizations were affected when the grant coming through USAID was stopped. He informed that the association is going to conduct an online survey regarding the evaluation of the program run by USAID and the questionnaire has been sent to all the related associations.
'If there is some information from the survey, it will be known, otherwise even the association does not have a certain information about how many programs under USAID have been affected,' he said, 'USAID should submit the details of expenses incurred through non-governmental organizations and companies to the Ministry of Finance every year, and it will be under that.'
In the US, Donald Trump issued an executive order suspending all foreign subsidies for 90 days after taking office as president. After that, USAID wrote a letter to the Ministry of Finance, non-governmental organizations and non-profit companies and informed them that all programs run with grants have been suspended for the time being. Based on the same letter, the Ministry of Finance has stated that all the programs through USAID will be affected except the Millennium Challenge Account (MCA) Nepal operated in Nepal.
The Ministry of Finance has asked everyone to postpone the programs run in four areas through the USAID grant, health, education, agriculture and inclusive policy. USAID Nepal has informed through a letter that out of the grant aid received by Nepal through the agreement signed on May 5, 2022 between USAID and the Government of Nepal, the grant received for the project of health, agriculture, education and inclusive policy, which is paid from the collective fund through the budget system, has been suspended for 90 days. According to the letter of the Ministry of Finance, "all related agencies have been informed not to create any liability towards USAID resources during this period." In 2023, 176 countries were provided with financial assistance equal to 68 billion US dollars. Nepal is on the 16th place in the list of countries that the US provides aid to.
