This article explores the nexus between foreign aid and Nepal's primary education in order to understand how aid agencies affect national educational development. It argues that after 1990, when global education targets provided the basic framework for all donor agency funding to primary education and the subsequent use of a sector-wide approach to achieve them, "national" education policy-making has become relatively unimportant if not meaningless because the documents produced within the parameters of global education targets have become the de facto policies. Moreover, the traditional policy-making function of the Ministry of Education (MOE) has "transcended" to a higher donor--MOE level, relegating the role of the Ministry to "managing" aid and aid agencies. This increased donor-ministry nexus has narrowed the avenues for broader participation by other relevant national stakeholders. Ironically, all this is happening amidst calls for decentralisation of educational planning. (Contains 7 notes.)