Saturday, July 22, 2017

Nepal expects FDI equal to 20 per cent of GDP every year till 2030

Nepal expects Foreign Direct Investment (FDI) equal to 20 per cent of its gross domestic product (GDP) every year till 2030 to achieve the Sustainable Development Goals (SDGs). Saying that it is not possible to achieve the SDGs through domestic investment alone, the government has pinned its hopes on FDI.
Presenting a report at the United Nations Economic and Social Council (UN-ECOSOC), National Planning Commission (NPC) vice chair Dr Min Bahadur Shrestha said that Nepal hopes to attract FDI equal to around 20 per cent of its GDP every year till 2030.
He said that the government expects huge FDI mainly in infrastructure development projects as the government alone cannot finance mega projects.
According to the data, Nepal was able to attract FDI equal to only 0.3 per cent of its GDP in 2016. Though the figure was only 0.24 per cent in 2015, the government has been claiming to have attracted FDI equal to three per cent of the GDP. Over the past few years, less than 50 per cent of the FDI pledges made by foreign investors has been entering the country, also due to bureaucratic dilemma.
Experts claim that the importance of FDI has increased further as the country has adopted the federal system of governance.
Nepal needs to spend about 11 per cent of its GDP on infrastructure development to achieve the SDGs related to the infrastructure development sector by 2030. Nepal has attached top priority to infrastructure development, followed by the development of the social sector.
At present, Nepal has been investing only about five per cent of its GDP or about $1 billion in infrastructure development which is far from being sufficient.
According to a projection, the size of Nepal’s GDP will reach Rs 3,445 billion by 2030.  Based on the data, Nepal will have to attract FDI worth R 689 billion in 2030 in its journey to achieve the SDGs.
However, going by the current FDI trend, the government needs to really work very hard to achieve the SDGs. Nepal began to attract FDI after implementing the sixth Five-year Plan (1980-1985) with the aim to establish big and mineral-based industries in the country.

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