Provincial leaders commit to implement findings of federalism stocktaking report

The Chief Ministers of five provinces expressed appreciation of the process and agreement of the findings and recommendations of the Federalism Capacity Needs Assessment (FCNA) at a special briefing event on the FCNA held today.
The briefing – jointly organised by the finance ministry amd ministry of Federal Affairs and General Administration – was delivered by the country manager of the World Bank in collaboration with the United Nations Development Programme (UNDP) in Nepal and in the presence of international development partners.
“Nepal’s transition to federalism significantly increases the need to develop capacity at all levels of the government and to modernise the governance system and institutional framework as an ongoing process,” stated finance minister Dr Yuba Raj Khatiwada, on the occasion.
“This will help in taking on new service delivery responsibilities as required in the federal set-up, and also meet growing demand for better public services,” he said, adding that the FCNA is an assessment of Nepal’s capacity needs in the provincial and local governments to implement federalism, along with a roadmap of priorities for all three levels of government over the short and medium terms.
Led by the government with the support of the World Bank and UNDP, the FCNA was jointly undertaken by the Georgia State University and Nepal Administrative Staff College, which was initiated in September 2018 and completed in December 2019. The assessment covered the federal government, seven provincial governments and a representative sample of 115 local governments using informant interviews, desk reviews and questionnaires, and focused on three main elements of capacity: organisational, institutional and regulatory, and physical infrastructure.
“Nepal has made a historic move from a unitary form of government to a federal system that builds accountability of three levels of the government,” minister of Federal Affairs and General Administration Hridayesh Tripathi said, adding that the success of federalism in Nepal implies success in all three levels of government which requires that they work together as one in meeting the aspirations of the people.
The FCNA identifies measurable progress since the adoption of the federal constitution in 2015 with the set up of key institutional structures, strengthening of the regulatory environment and strong initial progress in the adjustment of personnel in all levels of the government. Provincial and local governments account for about 34 per cent of total national expenditure, suggesting strong government acknowledgment of the importance of fiscal federalism. However, the FCNA notes that gaps still exist between the needs and existing capacity at all levels of government to manage new functions.
During the interaction, chief ministers, who attended the meeting expressed their views that relate to the need for infrastructure building, technical support in better planning and execution of projects, capacity building of human resources both at the provincial and local levels, and better coordination within provincial governments and with the federal government. They also appreciated the cooperation from development partners to support the implementation of federalism and welcomed the plan of dissemination of the FCNA in two provinces.
The assessment calls for a strategic approach to capacity building for federalism, including the need to prioritize measures to strengthen the foundations for intergovernmental and inter-ministerial coordination and monitoring of the implementation of federalism. The FCNA recommends a roadmap essential to help improve Nepal’s capacity readiness for federalism.
The FCNA was first disseminated at the federal level in December 2019. The report dissemination process, which seeks to mainstream findings and recommendations in all three levels of the government, will be completed by disseminations organised for provincial and local government officials and other stakeholders within the first quarter of 2020.
“The FCNA is a dynamic document that is intended to facilitate discussions on the way forward,” World Bank country manager for Nepal Faris H Hadad-Zervos said, adding that identifying the capacity needs for federalism is just one part of the equation. “The other and important part is to operationalise the FCNA findings and recommendations.”
“We are committed to support this process and the broader implementation of federalism in Nepal,” he added.
“It is all about bringing basic facilities and services like education, drinking water, food, basic health and roads faster to those really in isolated places,” UNDP resident representative Ayshanie Medagangoda-Labé said, adding that it is also about having the will and expertise to work in a different way. “We hope the FCNA will give the evidences for a strong foundation on which we the partners can rally to complement each other and deliver on the commitment.”

Roadmap recommended improvement in Nepal’s capacity readiness for federalism

Federalism is taking root in Nepal with measurable progress in institutional and regulatory environments for federalism, according to a government report.
The Federalism Capacity Needs Assessment (FCNA) – an assessment of Nepal’s capacity needs focusing on the provincial and local governments to implement federalism – is released by Finance Ministry and Federal Affairs Ministry.
The report – conducted by the Georgia State University and Nepal Administrative Staff College in 2018 and 2019 – is led by the government with the support of the World Bank (WB) and United Nations Development Programme (UNDP).
The assessment report covers the federal government, seven provincial governments and 115 local governments using informant interviews, desk reviews and questionnaires, and focused on three main elements of capacity: organisational, institutional and regulatory, and physical infrastructure.
“The transition to federalism is profound and requires years to unfold,”finance secretary Dr Rajan Khanal said, addressing the report launching ceremony.
“The report, in this regard, provides an important baseline in Nepal’s federalism implementation and capacity requirements to guide the success of federalism for the benefit of the people of Nepal,” he added.
The report also identifies measurable progress since the adoption of the federal constitution in 2015 with the set up of key institutional structures, strengthening of the regulatory environment and strong initial progress in the adjustment of personnel in all levels of the government. Within the first two years of the operation, provincial and local governments have accounted for about 34 per cent of the national budget significantly boosting their fiscal responsibility, the report reads noting that while initial progress is significant, gaps still exist between the needs and existing capacity at all levels of government to manage new functions. “The assessment calls for a strategic approach to capacity building for federalism, including the need to prioritise measures to strengthen the foundations for intergovernmental and inter-ministerial coordination and monitoring of the implementation of federalism.”
According to federal affairs secretary Yadav Prasad Koirala, the report is a living document. “I will like to highlight the need to implement the most urgent, relevant and feasible recommendations as prescribed by the assessment on a priority basis.”
The report also recommends a roadmap to help improve Nepal’s capacity readiness for federalism. Developed through a consultative process with all stakeholders under the leadership of the government, the roadmap can help deliver on common objectives and improve coherence and coordination among the three levels of the government. The roadmap will not only articulate reform priorities and sequencing of actions, but also help to improve implementation of the reform process for the successful implementation of federalism.”
Likewise, World Bank country manager for Nepal Faris Hadad-Zervos, on the occasion, said that Nepal’s success with federalism will be measured by not only how well the government manages the challenges associated with the transition to federalism but also by the quality of services provided to citizens. “The roadmap recommended by the FCNA can, in effect, add value in the implementation of federalism and help smooth out the transition.”
“Strong institutional arrangement for capacity building at the provincial and local levels is key to supporting Nepal’s transition to federalism,” UNDP Resident Representative AyshanieMedagangoda-Labé said addressing the report launching ceremony. “The findings and recommendations of the report will go a long way in guiding future courses in the implementation of Nepal’s federal form of governance.”