KATHMANDU: Deputy Prime Minister and Minister for Finance, Bishnu Prasad Paudel, has said Nepal's sovereign credit rating indicates that Nepal has a favorable environment for investment.
During his meeting with the development partners at the Ministry today, the Minister claimed the political and policy stability in the country with the formation of a coalition government with the participation of two major political parties: the Nepali Congress and the CPN (UML).
He hoped that this situation would boost the morale of the private sector and investors, leading to the rise of foreign investment in the country.
"Since the formation of the incumbent government, the country's economic indicators are improving," he said.
Stating that the government is focused on creating an atmosphere for infrastructure development, human resource development, and private-sector investment, the Finance Minister said various factors such as the current account balance, encouraging growth in electricity exports, an increase in remittances, and the rising number of tourist arrivals have contributed to strengthening the nation's economy. "However, it is essential to diversify and expand our exports, which will help strengthen the external sector in the long run," he stressed.
Expected improvement in public investment is waited due to reduced capital expenditure in recent years, according to the Minister who said to address this, the government has prioritized efforts to improve the quality of projects.
He assured that there is no need to panic because of a load of public debt, adding that the government has realized the need to re-prioritisation of loan mobilization.
As he said, a process has been initiated to prepare a draft of the assistance mobilization policy and law relating to the new finance mobilization in the public sector, expecting constructive suggestions from the development partners towards that end.
Stating that the government has emphasized on improving the public finance management system as well, the Finance Minister said the government is ready to collaborate with development partners on contextual and burning issues as minimization of climate change impact and climate adaptation by forming a flexible and integrated perspective on public investment and building a green economy.
"We have been facing some strain on maintaining public finance balance. Our investment in infrastructure sector is contracting due to increasing in some of our dedicated expenditures. The ratio of capital expenditure has decreased due especially to our commitment towards social security programmes and the increased cost of debt payment," the Finance Minister said, adding that Nepal's economic system was not without challenges.
According to him, resource mobilization has to be managed at the province and local levels as there is big demand for the same there while at the same time the government also has the obligation of allocating budget for the strategic projects that have already gone into implementation.
Expressing commitment to executing a new revenue mobilization strategy aimed at making the revenue mobilization sustainable, Finance Minister Paudel said only internal efforts were not adequate to mobilize financial resources for all the development initiatives.
He stressed that development assistance is an important basis for Nepal's fiscal management, urging the development partners to pursue joint initiatives to achieve further effective and long-term results.
Representatives from development partner organizations on the occasion said that they were ready to provide further support in Nepal's economic development efforts, and thanked the government for forming the High-level Economic Sector Reform Recommendation Commission.
They opined that the results of the credit rating have further attracted the foreign direct investment in Nepal.
Representatives of the World Bank, the Asian Development Bank, the United Nations Development Agency, among other development organizations were present on the occasion.
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