June 6, 2023, Tuesday
Nepal 1:37:26 pm

FNCCI, IFC to study private sector’s contribution to economy

The Nepal Weekly
October 18, 2022

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the International Finance Corporation (IFC) – a member of the World Band Group – have agreed to collaborate on examining the state of the private sector in Nepal to find out the latter’s contribution to the economy. 

The study is expected to help inform policymaking for private sector development, the two organisations said issuing a joint statement on Saturday.

“The collaboration will take the form of a joint report, which will generate data, insights, analysis, and policy recommendations on the development impact of private investments in the country,” according to the statement. 

In doing so, it aims to inform policy dialogues on private sector development issues among government, private sector, development partners and other stakeholders.

Nepal’s private sector has grown exponentially since the 1990s. Over 99 per cent of formal firms are privately-owned, with private ownership significantly present even in social sectors such as education and health. Accordingly, the private sector has an increasingly large share of capital formation and job creation. However, Nepal still has one of the lowest aggregate labour productivities in manufacturing in South Asia, according to the FNCCI. 

“For Nepal to achieve its development goals, the private sector needs to be further developed and strong,” pointed out Shekhar Golchha, President of FNCCI. “This is possible only through greater and well-informed policy reforms and dialogue between the public and private sectors. Therefore, this report will have a big role in help in this regard, particularly given that it will also be using government data.” 

As the largest global development institution focused on the private sector in emerging markets, IFC is committed to help develop markets and opportunities in Nepal, which will require further improvement to the investment climate for both entrepreneurs, and domestic and foreign investors, it said. 

“A periodic well-researched analytical report on the state of private sector will be critical in further informing the public-private policy dialogue, and help the private sector maximize its development impact for the benefit of the people of Nepal,” said Babacar S. Faye, IFC’s Resident Representative in Nepal.