Kathmandu. The government has invested 11.52 billion rupees in institutional shares in foreign institutions. According to the Public Debt Management Office under the Ministry of Finance, the government has been making share investments by signing agreements with multinational and regional financial institutions since their establishment.
The government has invested in the World Bank, International Monetary Fund, Asian Development Bank, Asian Infrastructure Investment Bank, SAARC Development Fund and the International Bank for Reconstruction and Development. The government has invested 11.52 billion rupees in these institutions until Asad 2080.
Although the government invested in such institutions, there was no adequate legal provision. The Law on Economic Procedures and Financial Responsibility does not seem to have clear and detailed provisions regarding the government’s share or loan investments, and there is also no clear policy provision regarding the principles and basis of investment. The government’s internal share or loan investment is made annually based on the amount allocated for share or loan investment in the Appropriation Act. To make such investments through the budget systematic, the government has issued the Share and Investment Policy 2081.
The said policy also mentions the government’s investment abroad. To achieve the national goal of economic and social development, a policy has been adopted to invest in shares and loans in the following sectors and bodies. According to the said policy, the government will invest in national priority enterprises that a multinational company is trying to invest in within Nepal under the concept of public-private partnership, invest in any organized body established to carry out any commercial work under a bilateral or regional agreement, and invest in shares in intergovernmental multinational bodies of which Nepal is a member.
The government has adopted a policy not to make direct loans to individuals from multinational bodies. Similarly, the government does not invest in investment instruments of domestic or foreign stock markets, as stated in the share and investment policy issued by the government. The ownership of shares and loans invested by the Government of Nepal has been retained in the name of the Government of Nepal, Ministry of Finance. The ownership of shares and loans previously held in the names of various ministries, departments and offices has been retained in the name of the Ministry of Finance.
Except as per the agreement with the development partner, no shares and loans will be invested in any commercial entity or company from the source of foreign loans or grants. The Ministry of Finance will be able to invest additional shares in intergovernmental multinational organizations of which Nepal is a member, and a policy is being implemented to invest shares in newly established intergovernmental multinational organizations as per the provisions of the agreement, when a commercial entity is established under a bilateral or regional agreement, or when an established entity is invested in accordance with the provisions of the agreement.
According to Mukunda Prasad Pokharel, Deputy Secretary of the Public Debt Management Office, this policy is in the implementation phase. He informed that since such a policy did not exist before, the policy has been brought to manage the government’s investment and this policy will be fully implemented after the procedures and regulations are formulated.
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