Bangladesh鈥檚 external debts skyrocketed to a staggering $103.78 billion by June 2024, a colossal leap from just $23.5 billion in 2009 when the Awami League-led government came to power.
This represents a staggering 341 per cent increase over the past 15 years, amounting to over $80 billion in new foreign loans.
Such an astronomical rise in external debts not only signals deepening financial mismanagement but also exposes the country鈥檚 alarming overdependence on foreign loans to finance its so-called development ambitions.
In Bangladeshi currency, these debts now stand at nearly Tk聽12.45 lakh crore, a devastating burden compounded by a rapidly devaluing local currency.
The shocking data has come to the fore after Sheikh Hasina resigned as prime minister and fled to India on August 5 amid a student-led mass uprising.
Experts warn that such an unprecedented surge in foreign debts is a glaring sign of mismanagement.
By comparison, the exchange rate in July 2021 was Tk聽84.80, underscoring the rapid depreciation of the taka in recent years.
The weakening currency exacerbates the debt crisis, as more takas are now required to service the dollar-denominated loans, further straining the national economy, experts said.
The most dramatic increase occurred between June 2020 and June 2023, when foreign debts skyrocketed by 51 per cent, rising from $65.27 billion to $98.93 billion in just three years 鈥� an alarming $33.6 billion increase in such a short period.
The accumulation of debts, driven by questionable fiscal policies and widespread inefficiency, has sent per capita debt soaring to $604 by June 2024 from $283 in June 2017, and ordinary citizens now bear the brunt of this financial misadventure, experts said.
The country鈥簊 external debt-to-GDP ratio hit 22.6 per cent by June 2024.
Bangladesh usually receives foreign loans from multilateral institutions such as the World Bank, the International Monetary Fund, the Asian Development Bank, the Islamic Development Bank, and major overseas commercial banks.
Of the $103.78 billion in external debts, $83.21 billion was borrowed by the public sector, with $71 billion borrowed directly by the government and the rest by government institutions.
The private sector鈥簊 short-term foreign loans also remained substantial, rising to $20.57 billion in June 2024, according to Bangladesh Bank data.
Meanwhile, buyers鈥� credit 鈥� an arrangement in which companies use foreign loans to finance imports 鈥� has also increased, with figures rising to $5.76 billion in June from $5.69 billion in March.
Experts have raised concerns about the sustainability of this debt load.
As external liabilities continue to mount, a growing portion of Bangladesh鈥簊 revenue must be allocated to service its debts, leaving fewer resources for critical social services, infrastructure, and development initiatives.
The crisis was compounded by allegations of massive corruptions and inefficiency in managing foreign loans during the Awami League regime.
Many of the large-scale development projects financed through foreign borrowing were marred by accusations of over-invoicing, project delays, and kickbacks to government officials and contractors.
Project returns continued to fall short, failing to justify the enormous cost.
Experts stressed the need for Bangladesh to carefully manage and prioritise its resources to ensure sustainable economic development, reducing excessive dependence on foreign borrowing.
The country鈥檚 foreign exchange reserves, already under immense pressure, plummeted to a dismal $20 billion as of mid-September, according to IMF guidelines.