Weekly Economic Bulletin: 11th September 2022 to 17th September 2022

Remittance grows while net FDI remains negative

Nepal Rastra Bank , the central bank of Nepal has recently issued a survey report on the Current Macroeconomic and Financial Situation (based on One month data of 2022/23). The report shows a positive growth in remittance both in NPR and dollar terms and decrease in trade deficit owing to decrease in imports. The report also indicated that the capital transfer increased 17.7 percent to Rs.800.34 million and net foreign direct investment (FDI) remained a negative of Rs.1.40 billion. In the same period of the previous year, capital transfer and net FDI amounted to Rs.679.72 million and Rs.480.57 million respectively.

世界银行 back to Arun River after 27 years

After it shelved its plan to invest in the Arun III Hydropower Project on the Arun river, the World Bank will be the lead international financial institution to finance the construction of the 1061 MW Upper Arun Hydroelectric Project along with European Investment Bank (EIB) Bank and other international institutions.

Nepal Electricity Authority is the lead equity investor in the project with total costs estimated to be Rs. 214 Billion (USD 1.75 Billion) and this is for the first time that the World Bank is funding a NEA led hydroelectric project.

In August 1995, the World Bank had pulled out from the Arun III Hydropower Project amidst huge controversy over high construction cost and environmental concerns which experts claim as the main reason behind several years of prolonged power cuts. SJVN LIMITED , India’s state owned company is now developing the 900 MW Arun III project with 62% of the work already complete.

Sigh of relief for loan shark victims?

The Ministry of Home Affairs (MoHA) and the Farm Workers Struggle Committee against loan sharks and fraud have reached five point agreements. After the agreement, the struggle committee will suspend the protest program that has been held for more than a month and a half in Maitighar, Kathmandu. The Government has agreed to probe the properties of the loan sharks and the government has also pledged to make arrangements for compensating the victims who died due to the torture meted out by the lenders.

The government had earlier formed a six-member task force on August 12 after the loan shark victims started their sit-in at Maitighar. The task force on August 13 issued a notice for the victims to register complaints along with evidence by August 21.

So far, the task force has received 2,289 complaints out of which the local administration is already looking into 56 cases. The task force has also made some important recommendations to control the crime related to loan sharking which include provisioning of ?concessional loans to those going abroad for jobs as most of the loan shark victims had taken the loans for foreign employment. The task force has also recommended that the political parties not accept donations or any financial assistance from the loan sharks and not provide political protection to them, besides not fielding them in the polls.

NOC in no mood to revise fuel prices

Nepal Oil Corporation Limited has been very proactive in revising the prices when the fuel price in the international market was rising but it seems in no mood to revise the fuel prices after it has received new reduced price lists from the Indian Oil Corporation Limited for the fourth time in a row.?During the period, the price of petrol alone has dropped by more than Rs 40 per liter.

To understand more on how the monopoly of NOC and IOC in the oil trade of the country is rendering consumers, taxpayers and the economy extremely vulnerable, and how liberalizing the oil trade would eliminate such vulnerabilities, read our article: The Case for Liberalizing the oil trade in Nepal

MDMS finally goes online!

After years of wait, Nepal Telecommunications Authority (NTA) has finally implemented MDMS (Mobile Device Management System) in Nepal from Bhadra 30, 2079.

The sale of smartphones through the grey market has been a major problem in Nepal for a long time. This system is expected to effectively solve the burning issue of illegal smartphone imports and track lost or stolen handsets.

“The basic idea is to eliminate mobile imports from the grey market. The system will prevent phone sales without a bill and warranty,” said Purushottam Khanal, chairman of Nepal Telecommunications Authority.

Buying a four wheeler? Get a PAN first.

The Inland Revenue Department has issued a notice requiring PAN (Permanent Account Number) mandatory in case of four wheeler vehicle purchase. The buyer must submit his/her PAN number and the seller must mention the same in the sales invoice.

Nepal exports plywood worth Rs. 500 Million in 3 months!

Nepal has become self-reliant in plywood production and also has started exporting to various countries including India. Out of 79 registered plywood industries, 63 industries are currently exporting their products and during the last 3 months, Rs. 500 Million worth of plywood have already been exported.

ADB approves financing of USD 70 million to support horticulture in Nepal’s hilly areas

The Asian Development Bank (ADB) on Tuesday approved US $70 million of financing to improve the livelihood and climate resilience of horticulture farmers in the hilly areas of five provinces in Nepal.

As a part of ADB’s overall efforts to address potential risks on food insecurity, the project will boost the productivity of 30,000 farmer households in Bagmati, Gandaki, Karnali, Province 1, and Sudurpashchim, mainly through the development of around 10,000 hectares of climate-resilient fruits and nut orchard. Citing an increasing demand for fruits and nuts amid an increasing urbanization and rising awareness for the nutritious foods in the country, the ADB has come up with the funding in the segment.