Dhaka Office: Before being ousted amid the mass uprising led by the anti-discrimination student movement, the Sheikh Hasina government left behind foreign loans amounting to 10 trillion taka.
This information was revealed in a report by Bangladesh Bank on Wednesday (September 18).
According to the report, as of the end of June this year, the total foreign debt in the country stood at 103.79 billion USD (10,379 billion). Calculated at an exchange rate of 120 taka per dollar, this loan amounts to 12.45 trillion taka in Bangladeshi currency. Of this, 83.21 billion USD, or approximately 9.98 trillion taka, was taken by the government. This includes loans from the government itself, the central bank, state-owned commercial banks, and government agencies. The remaining debt belongs to the private sector.
Economists believe that these loans, taken at high-interest rates and under strict conditions, are increasing the prices of goods and services provided by government agencies.
Key Stats:
Total Foreign Debt: $103.79 billion (Tk 12.45 lakh crore).
Government’s Share: $83.21 billion (Tk 9.98 lakh crore).
Debt Growth: Increased by $53.42 billion in the last 15 years.
Foreign Debt (March 2023): $99.30 billion.
3-Month Loan Increase: $4.48 billion between March and June 2023.
Foreign Debt in 2008-09: $50.36 billion at the end of the fiscal year.
On January 6, 2009, the Awami League formed the government under Sheikh Hasina’s leadership. At that time, i.e., at the end of the 2008-09 fiscal year, the government’s foreign debt stood at 50.36 billion USD. In other words, over the span of the last 15 years and 8 months, the country’s foreign debt increased by 53.42 billion USD.
According to Bangladesh Bank’s report, as of the end of March this year, the outstanding foreign debt for the government and private sector stood at 99.30 billion USD (9,930 billion). This means that in just three months, the former government took on nearly 4.48 billion USD in foreign loans.
Analysts argue that due to the lack of proper debt management by the former government, a larger amount of loans was taken from domestic sources. However, economists and experts always welcome taking foreign loans in foreign currency. Over the last 15 years, a lot of foreign loans were taken. But most of these loans were taken indiscriminately and without much negotiation, which has increased the pressure on the government’s debt situation.
Economists state that after the global financial crisis caused by the COVID-19 pandemic, U.S. interest rates increased, which in turn raised the interest rates on foreign loans. Additionally, the significant devaluation of the Bangladeshi taka put private sector businesses, who had taken foreign loans, in a bind. As a result, they focused more on repayment than on taking out new loans. However, with the stability of the dollar and rising domestic interest rates, businesses have started taking foreign loans again, even in the current situation.
It is worth noting that from 2009 to 2023, the Sheikh Hasina government implemented or is implementing several mega projects, including the Padma Multipurpose Bridge, Dhaka Metro Rail, the third terminal of Dhaka’s Shahjalal Airport, the Dhaka Elevated Expressway, the Rooppur Nuclear Power Plant, the Karnaphuli Tunnel, and the Matarbari Deep Sea Port. These mega projects are largely responsible for Bangladesh’s foreign debt exceeding 100 billion USD.
