Private sector pins high hopes on Investment Summit

Kathmandu, Apr. 26: Preparations for the 3rd Nepal Investment Summit slated for April 28-29 in Kathmandu are almost over. 

On the eve of the Investment Summit, the government has also amended investment-related laws and regulations through an ordinance to facilitate investment. 

The private sector welcomed the amendments made in laws citing that they would spread a positive message in the international community about the investment environment in Nepal.

In addition to this, Prime Minister Pushpa Kamal Dahal ‘Prachanda’ has reiterated his commitment to boost the confidence of Nepal’s private sector to attract more domestic and foreign investments and convey a message to the international arena that an investment environment has been created in Nepal.  

The Office of the Investment Board Nepal (OIBN) has already prepared to showcase 148 projects of different sectors, including hydropower, tourism, agriculture, road transport, transmission lines and infrastructure in the two-day Summit.  

In the meantime, the 58th meeting of the Investment Board Nepal held under the chairmanship of the Prime Minister and Chairman of the IBN approved the list of various projects that will be called for letters of intent, showcased, and marketed properly at the Summit.

The private sector has drawn the attention of the government to realise the investment commitments as much as possible given the past examples where the commitments of foreign investors were poorly implemented.

 In the meantime, stakeholders are optimistic about the renewed prospects for investment and economic revitalisation in the country.

FDI-friendly laws

In a significant move aimed at revitalising Nepal’s investment landscape, the government has amended nine outdated laws and policies through ordinance, marking a pivotal moment for the country’s economic growth, said Chandra Prasad Dhakal, President of Federation of Nepalese Chambers of Commerce and Industry. 

He hailed the government’s proactive stance and said the amendments will help attract more foreign direct investment (FDI) and foster a conducive environment for business growth in the country.

“This is a momentous occasion for Nepal’s economic development. The amendments to these laws and policies signify a notable step towards removing longstanding barriers that have hindered investment inflows into our country,” Dhakal said.

The amendments target key areas identified as bottlenecks for investment, including simplifying bureaucratic procedures, enhancing investor protection mechanisms and streamlining regulatory frameworks across various sectors.

He said that on the eve of the investment summit, the amendment to the investment laws has created a ray of hope for domestic and foreign investors and has sent a message that the government wants to accelerate economic activities in cooperation with the private sector.

The government has also passed the Bilateral Investment Agreement (BIA) to create a suitable climate for investment. The FNCCI had been pushing the government for the BIA and legal reforms to make an environment to navigate investment, both domestic and foreign, he said.

Dhakal further elaborated on the implications of these reforms, stating, “By addressing these critical issues, the government has demonstrated its commitment to fostering a business-friendly environment that encourages both domestic and foreign investors to explore opportunities in Nepal. This initiative will not only stimulate economic growth but also create job opportunities and drive innovation across various sectors.”

The FNCCI reiterated its commitment to collaborating with the government and other stakeholders to ensure the effective implementation of these reforms, emphasizing the need for continued dialogue and cooperation to sustain momentum in Nepal’s journey towards becoming an attractive investment destination.

Attraction to investors 

Kamlesh Kumar Agrawal, president of the Nepal Chamber of Commerce, said that the investment conference, which is going to be held at a time when the economy is facing a sort of crisis, will encourage industrialists and foreign investors to invest in the country.

“Holding the conference also sent a message that the government was committed to accelerating economic activities by increasing domestic and foreign investment, so NCC is also cooperating with the government to make the conference a success,” he said.

He said that the government had accepted the suggestions given by the private sector to create an investment-friendly environment and the recent amendments to the investment laws and regulations are a testimony to this, he said.

However, he said that the present amendments to laws were not enough to attract investment as per the requirement.

He said, “Easy entry, easy exit and guarantee of repatriation of dividends or profit are the primary conditions for investors, so the government should ensure that it is ready to facilitate investors, especially foreign investors, in this matter.”

“The Summit is an effort to explore the area of potential investment sectors of the country. The recent amendment to the laws and regulations done by the government through the ordinance will definitely convey the message that the government of Nepal was in favour to bring more investment, both domestic and foreign, and also ready to amend regulations further if necessary for facilitating investors,” he said.

He said that the Investment Board Nepal should be made strong and it should work regularly to explore the area of investment and facilitate the investors. “It is not a big deal how many project Memorandum of Understanding is signed at the Summit. The important thing is that it is a big thing to convey the message that Nepal wants to welcome domestic and foreign investors and is ready to facilitate,” he said.

Follow-up mechanism essential  

Rajesh Kumar Agrawal, President of the Confederation of Nepalese Industries, said that the Summit would send a message that Nepal was ready to facilitate the investors in the projects which would be showcased among the investors.

“The Summit is an initiation effort to explore the area of potential investment sectors of the country. The recent amendment of laws and regulations showed that the government of Nepal is in favour of bringing more investment and is ready to amend regulations further if needed,” he said.

Stating that organising the conference was only the beginning of the work of bringing in investment, he said that the government and the private sector have to do many other necessary things after the conference to make the summit a success in terms of bringing in investment.

“Investors don’t invest immediately after showing interest in a project. So, they look at various other things, including laws, regulations, security and government facilitation. The government and the IBN should work to facilitate the investors,” he said.

He claimed that the first and second investment conferences could not be as fruitful as was expected because the concerned bodies did not follow up with the investors who were interested in investing in projects showcased in those summits.

The first edition of the summit was held in 2017 and the second edition took place in March 2019.

He said that the IBN could follow up with the investors who show interest for investment through the collaboration of the private sector’s umbrella organisations like CNI.

He further said that the private sector was ready to increase investment considering that the sluggish economic situation would not last for long.

The recent amendments to laws and regulations, decreasing bank interest rates, and government initiatives to boost the morale of the private sector have created a ray of hope among the investors, he said.