The government launched the NEHEP program with a budget of USD 60 million, with the support of the World Bank.

The University Grants Commission, Ministry of Education, Science and Technology, and the World Bank jointly launched the five-year program.

The main objectives of the NEHEP are:

• Improving the quality and labor market relevance of Nepal’s higher education
• Enhancing collaborative research and online learning
• Expanding access to academic institutions for underprivileged and vulnerable students from disadvantaged areas
• Expanding targeted scholarships to disadvantaged students to pursue labor market-driven academic programs
• Offer equity grants to higher education institutions in disaster-affected areas

“Investing in human capital from early childhood to higher education is key to helping young people in Nepal realize their development potential,” said Education Secretary Ram Prasad Thapaliya during the inaugural ceremony.

“This program will help strengthen the higher education sector in collaboration with industries and ensure students across Nepal including those from disadvantaged groups have access to quality higher education”, he added.

Likewise, World Bank Country Director for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos said, “By improving access of students, especially those from disadvantaged communities, to quality higher education and skills that are in demand in the labor market, this program will support Nepal’s COVID-19 recovery.”

“This is critical as the country forges efforts towards green, resilient, and inclusive development, which the World Bank is committed to support”, he mentioned.

Stay Tuned to NepaliSansar for Latest Nepal Educational News!

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The concession loan to be provided by the international bank will help the Nepali Government to accelerate The Nurturing Excellence in Higher Education Program.

The Program aims at enhancing the quality of higher education, improving online learning, and expanding access to quality education for underprivileged and vulnerable students.

It is also intended to align the higher education sector with labor market needs, boost collaborative research and entrepreneurship.

The financing agreement was signed at the Finance Ministry, Kathmandu. Finance Secretary Madhu Kumar Marasini and World Bank’s Country Director Faris Hadad-Zervos signed the agreement.

“Investing in human capital was a key priority of the government to help young people realize their development potential,” said Finance Secretary Madhu.

“This project supports the government’s focus on recovery from the COVID-19 pandemic by strengthening the higher education sector and ensuring students all across Nepal including those from disadvantaged groups have access to quality education amid the pandemic’s challenges,” he added.

Likewise, WB Country Director Zervos said, “An important aspect of Nepal’s recovery efforts from the pandemic is to ensure that quality higher education was accessible, inclusive, and relevant to the demands of the labor market.”

“This is key to helping Nepal build back better and strengthen its resilience,” he added.

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Nepal’s Finance Secretary Sishir Kumar Dhungana and World Bank Country Director for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos, signed the agreement on Sunday.

The World Bank will provide the finance to the Nepali Government through budgetary support. This is the first credit under the Fiscal Policy for Growth, Recovery, and Resilience Development that supports reforms for protecting the most vulnerable and supporting business growth.

The project will help accelerate ongoing large development projects to create jobs, boost businesses, and support green recovery.

“The proposed budgetary support will be utilized in the physical infrastructural projects and economic recovery sectors as per the requirement and priorities of the Government of Nepal,” said Dhungana on occasion.

He added that the monetary support would accelerate Nepal’s recovery from the pandemic, protect the most vulnerable, and help the nation recuperate by reforming tax and customs systems, public investment management, and environmental regulations.

“The project will help Nepal achieve sustained growth post-pandemic that is inclusive, job-creating, and environmentally sustainable,” said WB Country Director Zervos.

“The World Bank is committed to supporting the government’s pandemic response to protect lives and stimulate economic recovery in Nepal.”

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“Amid the economic and social impacts of the pandemic, our priority is to provide immediate relief to the affected populations and support Nepal’s green, resilient, and inclusive recovery,” stated Faris Hadad-Zervos, World Bank Country Director for the Maldives, Nepal, and Sri Lanka.

Titled ‘The Nepal Programmatic Fiscal Policy for Growth, Recovery and Resilience’, the program aims to boost the institutions and revenue streams of Nepal.

It shall prop the health response of the country and help the social protection programs by easing access to digital solutions. It will propel the nation’s green recovery.

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Issuing a statement on October 29, the World Bank has said that it has approved a credit of NPR 9.36 billion (USD 80 million) for the Rural Enterprise and Economic Development (REED) project.

The project aims to foster market linkages to support the growth of rural enterprises, promote the agriculture sector while creating jobs to accelerate post-pandemic recovery.

The REED project supports Nepal’s ‘Agriculture Development Strategy 2015–2035’ that aims at creating a competitive, sustainable, resilient, and inclusive agricultural sector that promotes economic growth with private sector participation.

As per the statement issued by the World Bank, the project will be implemented in Province 1, Province 2, Bagmati Province, Gandaki Province, Sudur Pashchim Province, and Lumbini that offer opportunities for successful linkage activities of the rural entrepreneurs.

“The project is an opportunity for the public and private sectors to work together in building the ‘Nepal’ brand in the agriculture sector and leverage the country’s global recognition,” said Faris Hadad-Zervos, World Bank Country Director for the Maldives, Nepal, and Sri Lanka.

“In doing so, the project can stimulate many niche sectors such as coffee, tea, fruit, and medicinal products, among others, to help them grow and to support post-COVID-19 recovery,” he added.

The project also supports agricultural production through investments in municipal agriculture centers and value chain infrastructures to ensure the availability of farming inputs as recovery actions from COVID-19.

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The coronavirus uproar in foreign countries has inflicted economic turmoil in Nepal.

Lockdowns, travel restrictions and social distancing have drastically interrupted global economic activities. This, in turn, has disrupted the inflow of remittances to small economies like Nepal that partially depend on their migrant workers.

According to the World Bank, Nepal received USD 8.64 billion in remittances (27.3% of GDP) in 2019, among the highest in South Asia.

However, a recent World Bank report has exclaimed that the remittances to Nepal could slump by around 14% or USD 1.2 billion in 2020.

[Also Read: WHO Assists Nepal in Fight Against COVID-19]

The World Bank warned that the remittances across south Asian countries could drop by 22% due to coronavirus pandemic.

“With the IMF projecting a contraction in economies of the Gulf countries in 2020, hundreds of Nepalis are expected to lose their jobs and return home. This will affect the inflow of remittance,” said Nepal Rastra Bank Spokesperson Gunakar Bhatta.

According to the Nepali Government, around 1.5 million Nepalis are living in Malaysia, Qatar, Saudi Arabia, the UAE, and Kuwait. Around 225,000 Nepalis are in the UAE alone. Moreover, 3-4 million Nepalis are in India.

In the need of the hour, the Nepali Government should introduce targeted schemes for the migrant workers to stabilize the economy.

So far, Nepal has reported 82 coronavirus infection cases. However, 16 patients have already recovered.

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In its latest South Asia economic outlook report on April 07, 2019, WB noted that Nepal is poised for a 6 percent economic growth rate in FY 2018-19.

“In Nepal, GDP growth is projected to average 6 percent over the medium term. The services sector is forecast to benefit from strong tourism and manufacturing will be supported by the opening of Nepal’s largest cement factory next year,” WB said in its release.

While the growth is expected to be strong in the mid-term, WB said the country will need to consider few risk factors in its way forward.

World Bank’s Risk Factors for Nepal Economy include:

• Constraints in Reform implementation
• Vulnerability to Natural Disasters
• Slow-paced reforms to rise private investment, especially foreign investment
• Resource availability
• Supporting federalism
• Hit to Remittance Inflows
• Sustaining Service delivery
• Credit constraints as banks limit lending to meet the Credit To Core Capital Plus Deposit (CCD) ratio regulatory limit
• Fiscal discipline at the local level

“The poverty outlook is especially sensitive to remittance inflows, natural disasters and local level implementation capacity constraints that may hamper service delivery…”

“The transfer of financial management staff over a year ago made it possible for local governments to prepare budgets and receive fiscal transfers of 8 percent of GDP in FY2018/19. However, under-spending of the budget persists,” WB said in its release.

However, WB economic growth projections for Nepal for FY 2019 are below ADB’s expectations of 6.5 percent, IMF’s 6. 5 percent and the government’s own target of 8 percent.

“In Nepal, GDP growth is projected to average 6 percent over the medium term. The services sector is forecast to benefit from strong tourism, and manufacturing will be supported by the opening of Nepal’s largest cement factory next year,” the report added.

Also Read:

• Foreign Aid to Nepal: World Bank Tops, Govt Eyes Capacity Development
• World Bank Predicts a 5.9% Growth Rate for Nepal in 2019

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#NIS2019: The Conclusion Day

The last day of the summit included a parallel session and three plenary sessions followed by a concluding session at the end.

The first session of ‘Day-2’ NIS 2019, chaired by the Nepal Minister for Physical Infrastructure and Transport Raghubir Mahaseth made emphasis on the investment potential of road, railway and waterways in Nepal.

As part of the session, Joint Secretary at the Ministry Gopal Prasad Sigdel highlighted Nepal Government’s priority to mega physical infrastructure projects and informed that:

• Gautam Buddha International Airport project will be completed by 2019 end and Pokhara International Airport by 2020
• Cable cars were already successfully operated in Manakamana, Chandragiri and Kalinchowk areas

The session also stressed on water transportation potential of Koshi, Karnali and Gandaki rivers, and required investment on the same.

The panelists underscored the need for immediate formulation of plans and timely execution on physical infrastructure development for better economic development and prosperity.

As part of the session, Asian Development Bank (ADB) Vice-Chair Shixin Chen said Nepal needs to focus more on physical infrastructure. “The ADB has its investments in Nepal’s Gautam Buddha International Airport, Melamchi Drinking Water Project and various other projects including the rebuilding of earth-quake damaged schools,” said Chen, expressing their willingness for further investment in Nepal.

Speaking in another panel session on ‘Investment in Nepal: Exchanges of Experience’, investors lauded Nepal’s investment climate. @investinnepal19

“There is huge labor force, problem of load shedding is almost solved, and industrial atmosphere has been created. So, the foreign investors can make Nepal their destination,” said Confederation of Nepali Industries (CNI) Chairperson Bhawani Rana.

Non-Resident Nepali Association (NRNA) Founding Chairman Upendra Mahato also called on foreign community to invest in Nepal’s projects for its reliability and investment potential.

The Summit Outcomes

• Nepal Investment Summit 2019 (@investinnepal19) has reportedly witnessed signing of 15 new deals and MoUs for new projects in Nepal
• Besides, the country has also received proposals, 17 applications for 10 other projects presented as part of the Summit
• Transport, hydropower, hospital, airport, convention center and agriculture infrastructure were among areas that received investment proposals
• India, Vietnam, United States, South Korea, China, Britain were among countries that represented participating investors
• International Finance Corporation, World Bank Group, Asian Development Bank, Multilateral Investment Guarantee Agency, were among the key multilateral donor agencies entered into separate investment and cooperation deals during the summit
• One of the world’s largest solar development company SkyPower announced a new partnership with Nepal’s Chaudhary Group for a 600-MW capacity renewable solar energy projects #cleanenergy
• PM and Finance Minister Khatiwada held 30 side-line bilateral meetings with investors and delegates as part of the Summit
• More than 1300 participants and around 735 foreign delegates from more 300 companies attended the Summit

What Key Delegates Said on Nepal Investment Summit 2019?

Nepal values the FDI to embark on the high economic growth trajectory. – K P Sharma Oli, Right Honorable Prime Minister

Let us all join hands together to unlock Nepal’s Economic Potential.- Maha Prasad Adhikari, CEO, Office of the Investment Board

Affordable tax rates have been fixed and laws have been made targeting investors. There is a possibility for investors to have a big market in Nepal which lies between two big nations – China and India. I want to urge all investors to invest and get high returns on their investment. – Dr. Yuba Raj Khatiwada, Honorable Minister for Finance

Plans have been made to make long-term investments in Nepal. – Shixin Chen, Vice President of the Asian Development Bank

Nepal has been a rising star in South Asia with foreign direct investment flows reaching a record high in 2017, and likely to remain an important investment destination in the region. This confirms Nepal’s efforts to improve its investment climate and become a competitive investment destination for multinational companies that want to have an impact. We stand ready to work with investors and the government to make Nepal a hub for investment in infrastructure that improves lives, leads to sustainable growth and delivers opportunity for its citizens. –  Keiko Honda, CEO of Multilateral Investment Guarantee Agency (MIGA)

With 25 projects approaching USD 3 billion in financing, we are here for the long haul and will continue to support infrastructure development, policy reforms, skills development, and anything required. There is a clear acceptance by Nepal authorities that the country’s prosperity will rely on crowding in the investment from around the world. Not only financial resources, but also technical and managerial know-how, will be critical to realize Nepal’s vast potential. – Hartwig Schafer, Vice President of World Bank South Asia

IFC has played a role in creating markets and supporting investments for 60 years. In Nepal, we are looking to scale up significantly our investments in strategic sectors such as hydropower, agribusiness, tourism, and financial inclusion. We are encouraged by the government’s efforts to improve the enabling environment and IFC plans to increase its cumulative investment portfolio to around USD 1 billion over the next four years. – Hans Peter Lankes, Vice President, Economics and Private Sector Development, IFC

Province 2, Sudurpaschim Stand Special Attraction

Province 2 and Sudurpaschim emerged as the top investment destinations at the Summit.

While the Summit highlighted potentiality of different projects belonging to different provinces, Province 2 and Sudurpaschim have reportedly stood unique in attracting investors.

Despite number of projects, the province 2 attracted investors by showcasing its geographical importance, tax-related incentives and other special initiatives by provincial government.

It is noteworthy that majority districts of province 2 share borders with India, giving scope for trade and business opportunities.

Sudurpaschim also wooed investors in its way by showcasing its 7 seven projects identified by the Investment Board Nepal and 9 other projects of the region.

“There must be some positive competition among the provinces when it comes to wooing investors and develop provinces. Only if we try to develop on our own can federalism be stronger,” said Bijaya Kumar Yadav, Minister For Economic Affairs And Planning, Province 2 Government.

“It is difficult for provinces to organize such large-scale events. So, we sought to use the Investment Summit platform at best we can,” says Jhapat Bohora, Minister For Economic Affairs And Planning, Government of Sudurpaschim Province.

Responding on the Province 2 potential, CG Chairman Chaudhary said, “During our survey, we saw a very good investment opportunity in solar plant in Province 2. When we went to hold talks with Chief Minister Raut and his team, we were impressed by their professionalism and their commitment to support us. That boosted our confidence; our talks resulted in the signing of the memorandum of understanding during the summit.”

In this regard, Chaudhary explained that CG Infrastructure is planning to set up various solar plants in all 8 districts of the Province 2.

“Competition among provinces to attract investment can be described as the benefit of adopting federalism. It is good that provinces engaged in a healthy competition to attract investment,” says former Chief Secretary Som Lal Subedi.

The Conclusion

The Nepal Investment Summit 2019 worked out as a big platform for the Himalayan nation in showcasing to the world, its investment and development potential across sectors. Hope the Summit outcomes will add to the country’s portfolio in the days to come.

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In a meeting on January 17, 2019, Nepal Council of Ministers decided to purchase additional shares of 309 units taking the total count to 1714 in the World Bank.

The Government of Nepal said in a weekly briefing with press held to inform about key government decisions.

Speaking on the occasion, the Minister for Information and Communications Gokul Prasad Baskota expressed happiness that the new decision secures Nepal’s voting rights in the World Bank.

In another decision to enhance the capacity of 15 local municipalities, the government has also decided to accept a technical aid worth EUR 1.996 million from the EU delegation in Nepal.

Besides, the government has also planned to seek loan assistance from the Saudi Fund for Reconstruction.

Towards this end, a special team led by the Joint Secretary at the International Financial Aid Coordination Division under the Ministry of Finance has also been constituted to seek loan assistance.

The Fund is to ensure loan worth USD 20 million for 25 years in a concessional interest rate of one percent.

What is IBRD?

IBRD is an international finance institution that supports middle-income countries by giving them loans for regional development. It also promotes and supplements private foreign investment. IBRD is the first of the five member institutions that make the World Bank Group.

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FNCCI President Bhawani Rana and Revenue Secretary Shishir Kumar Dhungana inaugurated the center on November 20, 2018. This unit will receive & address the business community’s tax-related complaints.

In case of inability to solve issues on its own, TTC will forward them to related government agencies including Inland Revenue Department and Nepal Finance Ministry.

“The unit will address complaints on its own or will forward them to the government agencies. This is our effort to make tax administration more practical, effective and friendly,” read FNCCI’s press statement post TTC’s inauguration.

Additionally, the center will offer all its services at ‘no cost’ and will have a lead legal advisor, charter accountants and other staff.

FNCCI Officiating Director General Gopal Prasad Tiwari informed that the government will soon recruit a tax officer for settling tax-related concerns.

“The unit is of great significance considering the worsening doing business environment on the country,” added Tiwari.

According to the World Bank’s Doing Business Report for 2019, Nepal slipped five points down to the 110^th rank compared to last year. Nepal’s time-consuming tax filing process was attributed to the low rank.

“There is a pressing need to ease the process of filing taxes,” said Rana at the inauguration ceremony while adding that the tax-process should be business friendly.

FNCCI Senior President Shekhar Golchha added that the Nepal business community has been suffering at the hands of contradictory legal provisions on tax matters.

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