Kathmandu: Chandra Prasad Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), emphasized the need for a stable policy environment to foster private sector growth in Nepal. In a recent meeting with an International Monetary Fund (IMF) mission, Dhakal highlighted the importance of understanding Nepal’s unique economic and social characteristics when providing policy advice.
“Nepal’s economic structure and characteristics are somewhat different,” Dhakal noted, warning that delays in necessary reforms could arise if policies are not tailored to the country’s specific needs. He pointed out that while Nepal’s banking system currently enjoys high liquidity and reduced interest rates, there remains a low demand for private sector investment. To address this, Dhakal called on banks to offer more flexible lending terms and cautioned against excessive regulation, which he believes could undermine confidence in both the banking sector and private businesses.
Dhakal expressed optimism that recent government reforms, initiated based on private sector input, could offer potential solutions. He informed the IMF mission that eight laws had been amended and a draft bilateral investment agreement had been prepared following a recent investment summit aimed at boosting investment.
Despite high foreign exchange reserves and a favorable balance of payments, Dhakal pointed out that Nepal has struggled to attract foreign investment. He urged the IMF to help promote Nepal as a viable destination for foreign investors.
IMF Mission Chief Dr. Sarwat Jahan affirmed the IMF’s commitment to assisting Nepal, noting that the organization has consistently recognized the importance of prioritizing the private sector in economic policy.
The ongoing dialogue between the FNCCI and the IMF underscores the critical need for tailored policy solutions to enhance Nepal’s economic environment and investment appeal.