The foreign investment commitment in Nepal has increased by a whopping 256 per cent in the first five months of fiscal year 2017-18, thanks to positive vibes in the country in ongoing fiscal, which has boosted the morale of investors.
The statistics maintained by the Department of Industry (DoI) — the government body authorised to approve foreign investments of up to Rs two billion — show that Nepal received investment commitment worth Rs 15.72 billion in the first five months of 2017-18 (mid-July to mid-December).
The country had received investment pledge worth only Rs 4.41 billion in same period of fiscal 2016-17.
“The recent political developments in the country seem to have boosted the morale of investors. Since a few investors have expressed commitment to inject investment in some huge projects, the overall investment commitment in the initial months of 2017-18 has surged substantially compared to the investment pledge in the early months of the previous fiscal,” said Shankar Aryal, director general of DoI.
As per Aryal, a majority of investment commitments has been made in cement, food and herbal sectors.
DoI statistics show that Nepal has received comparatively higher investment pledge in the manufacturing sector among others during the first five months of the ongoing fiscal. While the country’s manufacturing sector has received Rs 7.17 billion investment commitment, energy sector and tourism sector have received investment commitment worth Rs 2.12 billion and Rs 1.25 billion, respectively.
In the review period of last fiscal year, Nepal had received foreign investment pledge of only Rs 954 million in the manufacturing sector.
Though the foreign investment commitment in Nepal in the first five months of 2017-18 has increased in terms of monetary value compared to corresponding period of 2016-17, foreign investment in terms of number of projects has slipped this year, as per DoI.
Though foreign investors had pledged to invest in 170 projects in Nepal in first five months of fiscal 2016-17, only 142 projects have received investment commitment in the review period in this fiscal. While foreign investors have committed to invest in 46 projects each in tourism and service sector, they have pledged to invest in 26 projects in manufacturing sector.
Though Nepal has been receiving huge foreign investment commitment every year, the government has not been able to materialise the commitment. For example, Nepal received investment commitment worth more than $14 billion at the Nepal Investment Summit last year. However, the government has not been able to materialise even a negligible portion of the committed amount.
Meanwhile, the private sector has been saying that the government should prioritise materialising investment commitments rather than just bringing in commitments to invest in different sectors.
Source: The Himalayan Times