IFC and the FNCCI have agreed to collaborate on examining the state of the private sector in Nepal to showcase the private sector’s contribution to the economy and help inform policymaking for private sector development.

The collaboration will notably take the form of a joint report, which will generate data, insights, analysis, and policy recommendations on the development impact of private investments in the country. In doing so, it aims to inform policy dialogues on private sector development issues among government, private sector, development partners and other stakeholders

Nepal’s private sector has grown exponentially since the 1990s. Over 99 percent of formal firms are privately-owned, with private ownership significantly present even in social sectors such as education and health. Accordingly, the private sector has an increasingly large share of capital formation and job creation. However, Nepal still has one of the lowest aggregate labour productivities in manufacturing in South Asia.

“For Nepal to achieve its development objectives, the private sector will need to be further developed and strengthened,” said Shekhar Golchha, President of FNCCI. “This is possible only through greater and well-informed policy reforms and dialogue between the public and private sectors. Therefore, this report will have a big role in helping in this regard, particularly given that it will also be using government data.”

As the largest global development institution focused on the private sector in emerging markets, IFC is committed to help develop markets and opportunities in Nepal, which will require further improvement to the investment climate for both entrepreneurs, and domestic and foreign investors.

“A periodic well-researched analytical report on the state of private sector will be critical in further informing the public-private policy dialogue, and help the private sector maximise its development impact for the benefit of the people of Nepal” said Babacar S Faye, IFC's Resident Representative in Nepal.