Kathmandu, January 30

A recent study carried out by the World Bank (WB) has stressed on the need for a strategic approach by the government for capacity building for effective implementation of federalism.

The study titled ‘Federalism Capacity Needs Assessment (FCNA)’, which was released today has stressed on the need to enhance capacity at different levels for effective implementation of federalism, including the need to prioritise measures to strengthen the foundations for inter-governmental and inter-ministerial coordination and monitoring of the implementation of federalism. Moreover, the study has recommended a roadmap be set to help improve Nepal’s capacity readiness for federalism.

The report was unveiled among chief ministers of different provinces and other high-level government dignitaries on Wednesday.

“Nepal’s transition to federalism significantly increases the need to develop capacity at all levels of the government and to modernise the governance system and institutional framework as an ongoing process,” said Finance Minister Yubaraj Khatiwada. “This will help in taking on new service delivery responsibilities as required in the federal set-up, and also meet growing demand for better public services.”

The FCNA is an assessment of Nepal’s capacity needs in the provincial and local governments to implement federalism, along with a roadmap of priorities for all three levels of government over the short and medium terms.

The assessment covered the federal government, seven provincial governments and a representative sample of 115 local governments using informant interviews, desk reviews and questionnaires, and focused on three main elements of capacity: Organisational, institutional and regulatory, and physical infrastructure.

“Nepal has made a historic move from a unitary form of government to a federal system that builds accountability of three levels of the government,” stated Minister for Federal Affairs and General Administration Hridayesh Tripathi, adding that the success of federalism in Nepal implies success in all three levels of government which requires that they work together as one in meeting the aspirations of the people.

The FCNA has identified measurable progress since the adoption of the federal constitution in 2015, with the set up of key institutional structures, strengthening of the regulatory environment and strong initial progress in the adjustment of personnel in all levels of the government. Provincial and local governments account for about 34 per cent of total national expenditure, suggesting strong government acknowledgment of the importance of fiscal federalism.

However, the report notes that gaps still exist between the needs and existing capacity at all levels of government to manage new functions.

“The FCNA is a dynamic document that is intended to facilitate discussions on the way forward.

Identifying the capacity needs for federalism is just one part of the equation,” said Faris H Hadad-Zervos, World Bank country manager for Nepal.

“We are committed to support this process and the broader implementation of federalism in Nepal.”