FNCCI President’s Economic Address Nepal: Growth, Challenges, Private Sector

10th April 2025, Kathmandu

On the occasion of the 59th Annual General Meeting and Industry and Commerce Day 2081, Nepal Industry and Commerce Federation (FNCCI) President, Shri Chandra Prasad Dhakal, warmly welcomed all attendees.

FNCCI President’s Economic Address Nepal

Reflecting on the past two years of the current executive committee, he acknowledged the numerous challenges faced, which were turned into opportunities for growth. He emphasized the continuous efforts to search for new opportunities, overcome setbacks, and drive reforms, which are still ongoing.

Economic Crisis Discussion and Optimism

Dhakal recalled that during the 57th Annual General Meeting two years ago, many experts warned of Nepal possibly facing an economic crisis similar to Sri Lanka.

At that time, he had confidently stated that Nepal would not fall into such a situation. He provided several reasons, including the country’s manageable foreign debt and sufficient foreign exchange reserves to cover import needs for over six months.

Despite taking extreme precautionary measures, the economy did face setbacks, such as a decrease in revenue and a rise in informal trade. However, he pointed out that recent data from the National Statistics Office showed a 5% economic growth, a positive sign amidst continued challenges.

Youth Employment and Economic Development

Dhakal shared concerns about the unemployment situation, particularly among the youth. While the government provides jobs to about 500,000 people, the private sector employs 86% of the workforce. However, it is unable to absorb the 500,000 young people entering the job market each year. He noted the comparison between Nepal and South Korea’s economic growth, with South Korea’s per capita income increasing drastically over the past few decades while Nepal’s progress, though substantial, has not been at the same scale.

Private Sector’s Crucial Role

In his address, Dhakal emphasized the importance of a thriving private sector for Nepal’s economic growth. He noted that private sector contributions account for 81% of the country’s economy. For the country to prosper, he urged the government to allow businesses to operate freely without unnecessary interference. Additionally, he called for a collaborative approach between the government, media, civil society, and all stakeholders to support the private sector.

Investment and Economic Reforms

Shri Dhakal pointed out that foreign investment in Nepal remains low at just 0.2% of GDP, which amounts to approximately NPR 8 billion annually. He proposed that this could be increased fivefold, targeting one billion dollars annually by 2030. He also cited the example of Cambodia, which has seen much higher foreign direct investment, suggesting Nepal could do the same with the right policies.

To foster domestic investment, FNCCI has worked on setting up the Nepal Development Company, aimed at pooling small investments from across the country and creating large-scale investment opportunities. This initiative aims to increase the capacity for capital mobilization and investment in Nepal’s development.

The Path Forward: Reforms and Improvements

The president concluded his speech by urging all stakeholders to work together for economic reform. He highlighted that improving governance, creating jobs, and ensuring stability would be crucial for Nepal’s progress. He emphasized that economic growth requires the active participation of both the private sector and the government.

Finally, Dhakal expressed optimism for the future, believing that with continued collaboration, Nepal could overcome its current challenges and build a prosperous future for its people. He wished everyone a prosperous New Year 2082, filled with hope and new opportunities.

Conclusion

In his closing remarks, Dhakal reinforced the need for political consensus on economic issues. He called for shared strategies among all political parties, stressing the importance of a stable environment for business. With the right reforms and improvements, he believes Nepal can move forward into a prosperous future.

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