Stable policy key for private sector growth

Kathmandu, Sept. 14

President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Chandra Prasad Dhakal, stated that the private sector needs a stable policy environment to operate freely.

During a meeting with the mission of the International Monetary Fund (IMF) on Saturday, Dhakal urged the IMF to understand Nepal's economy and social structure and provide policy advice accordingly.

"Nepal's economic structure and characteristics are unique and different," he said, adding that delays in reforms would occur if policies were not tailored accordingly, informed the FNCCI in a statement.

Dhakal also pointed out that Nepal's banking system currently has high liquidity, and although interest rates have dropped, there is still low demand for investment from the private sector. According to him, the FNCCI has urged banks and financial institutions to provide flexibility in lending on their own terms, adding that excessive regulation could erode confidence in both the banking sector and private businesses.

Dhakal expressed confidence that the new generation of reforms announced by the government on the advice of the private sector could provide solutions.

He informed the mission that eight laws had been amended and a draft bilateral investment agreement had been prepared to attract and increase investment ahead of the recent investment summit. Similarly, Dhakal urged the IMF to assist in promoting Nepal as a destination for foreign investment. He said that even with high foreign exchange reserves and a positive balance of payments, the country had not been able to attract foreign investment.

During the meeting, IMF Mission Chief Dr. Sarwat Jahan said that the IMF had come to assist Nepal. She also stated that the IMF has always been positive about the need to give importance to the private sector.                                            

Published in The Rising Nepal daily on 15 September 2024.