Kathmandu, September 11
Finance Minister Yubaraj Khatiwada has said that Nepal has developed conducive environment for doing business and investment. Citing that all foreign firms in the country have been making up to 25 per cent return on equity against the global average of 10 per cent, Khatiwada said that Nepal is a better option for investors.
Speaking at a session at the Nepal Infrastructure Summit 2019, Khatiwada also informed that the government is in the process of conducting sovereign credit rating to facilitate businesses in the country. However, Khatiwada acknowledged that the government has not been able to give due priority to the infrastructure sector in the lack of enough resources as the present government also has bigger responsibility of ensuring social security of citizens.
“The Constitution has guaranteed more than 30 fundamental rights to the people and majority of them are related to social security. Along with this, the government also has to ensure availability of resources (administrative) to all 761 governments across the country,” explained Khatiwada.
He said that the government is, therefore, promoting the support and investment from the private sector for desired economic goals and development aspirations of the country.
As per him, ample investment in the infrastructure, including roadways, railways, airways and the tourism infrastructure, will ensure easy entry of the private sector in the development process. Along with this, the government is seeking private sector’s support also to diversify and minimise risks.
Khatiwada said that a few infrastructure projects could also be operated in business model to attract private sector’s investment.
Radesh Panta, former chief executive officer of Investment Board Nepal (IBN), said that the country today needs quality investment for which the government should ensure necessary subsidy packages and coordination with investors.
World Bank Vice President Jingdong Huo said that the World Bank has been contributing the private sector-oriented economic development in Nepal. As per him, the World Bank has been operating 25 projects in Nepal at present, while $2.6 billion worth of new projects have been initiated in Nepal recently. Moreover, Huo said that majority of economic indicators of Nepal today are satisfactory.
Sunil KC, chief executive officer of NMB Bank, informed that banks have been investing almost 20 per cent of their loan portfolio in the infrastructure sector of the country. Of this, majority of the investment of the banks is in hydropower and renewable energy, he mentioned.
Though Nepal needs huge investment to achieve targeted economic growth rate, KC lamented that the financial sector is often witnessing the crunch of loanable funds. In such a context, he urged the government to facilitate banks to bring in funds from offshore markets.
Krishna Acharya, president of Institute of Chartered Accountants of Nepal, said that ‘accountability’ is the primary challenge facing the country at present. He also highlighted the necessity of effective coordination between the government, private sector and the financial sector for development of infrastructure in Nepal.
A version of this article appears in print on September 12, 2019 of The Himalayan Times.