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A counterpart fund is a technique for turning foreign aid into reserves of domestic currency. They were used by the UNRRA, and the Marshall Plan in the rebuilding of Western Europe after the Second World War,[1] and today remain a common technique for delivering developmental assistance.

One method of setting up a counterpart fund is to have businesses in the country receiving aid that want to import a commodity place an order with their government and pays for the import in their local currency. The government then uses some of their foreign assistance, still in the foreign currency, to pay for the goods. This makes importing far easier as the unstable currencies in developing nations are often of little international value. Agreements are also usually signed so that these imports can only come from the nation that gave the aid, benefiting the donor's export industry. Another method is for goods to be donated to a developing nation's government and for them to then sell the goods to the population, and use the proceeds to set up a fund.

The recipient government is also then left with the original payment in its domestic currency. These payments are amalgamated into a fund that is used to further fund development. This can take the form of investments in infrastructure or industry, paying down the debt or deficit, or stabilizing the currency. The investment of these funds can take the form of loans rather than grants, creating a permanent pool of investment capital. For instance, Germany's Marshall Plan counterpart funds were used to set up such an investment fund, and it is still in operation today.


  1. ^ Greg Behrman, The Marshal Plan, Aurum Press Ltd., 2008, pp. 178,179,232.

Original courtesy of Wikipedia: http://en.wikipedia.org/wiki/Counterpart_fund — Please support Wikipedia.
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1306 news items

Sun, 30 Aug 2015 09:52:30 -0700

Katsina — The United Nations Children Fund (UNICEF) has appealed to Katsina State government to pay its counterpart fund of N130 million for this year's programme. The Chief of Office, UNICEF Field office in Katsina, Padmavathi Yedla, made the appeal ...


Thu, 20 Aug 2015 12:32:18 -0700

WorldStage Newsonline—Nigeria's Bank of Industry (BoI) has called on Gombe Sate Government to release its outstanding counterpart contribution of N250 million to the matching fund to enable it release loans to businesses that will jobs. The Managing ...


Fri, 14 Aug 2015 04:37:30 -0700

The State Governor, Ibrahim Gaidam, who received the Country Representative in Nigeria, Ms Jean Gough, said the State government would pay its 30 per cent counterpart fund between the months of September and October, to enable the take-off of the ...

The Guardian Nigeria

Sun, 16 Aug 2015 17:11:15 -0700

The state governor, who received the country representative in Nigeria Ms. Jean Gough says the state government will pay its counterpart fund between the months of September and October to enable the take-off of the various programme in the state.

Daily Times Nigeria

Daily Times Nigeria
Sun, 23 Aug 2015 14:06:58 -0700

Good fortune has smiled on the erosion troubled people of Amuda community in Abia State as construction of their major road is now under construction; but delay by the state government in remitting the counterpart fund to the World Bank assisted ...
Daily Trust
Fri, 06 Mar 2015 04:00:00 -0800

Lagos — Construction of the planned new harbour at the Lekki Free Trade Zone (LFTZ) would have started but for the failure of the federal government to make available its $117 million counterpart funding, the Lagos State Governor Babatunde Fashola ...

Daily Trust

Daily Trust
Wed, 02 Sep 2015 21:52:30 -0700

However we are yet to fulfill our own 15% counterpart funding just like the one with Czech. That 15% counterpart fund is what will be used in developing infrastructure here in Nigeria. What the agreement is like with the company that would be mass ...
Sun, 16 Aug 2015 21:30:00 -0700

The Executive Secretary Universal Basic Education Commission (UBEC) Dr Suleiman Dikko has decried the failure of state governments to access over 40 per cent of the federal government's matching grant allocated for the implementation of Universal Basic ...

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