KATHMANDU, Aug 25: Nepal’s private sector is facing serious pressure amid prolonged market sluggishness, declining demand and growing business uncertainty, according to Anjan Shrestha, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
Speaking at the inauguration of the NADA Auto Show in Kathmandu on Tuesday, Shrestha said the economy was going through a challenging period. He attributed the declining confidence among businesses to shrinking economic activity, falling market demand and increasing difficulties in operating businesses.
Shrestha, who has around 36 years of experience in business, said he had never witnessed the morale of the country’s business community as weak as it is now.
He noted that the government has set targets of raising per capita income to $3,000 within the next five to seven years, expanding the economy to Rs 10 trillion and creating 1.2 million jobs. However, he said the private sector has yet to see a clear roadmap and strategy for achieving those targets.
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Shrestha stressed that simply announcing targets would not be sufficient and that concrete action plans and effective implementation mechanisms were necessary. He warned that without restoring confidence in the private sector, the government’s economic prosperity targets could remain limited to paper.
He also called for stable and serious government policies toward the automobile sector, which he described as an important contributor to the national economy and government revenue.
According to Shrestha, automobile-related goods worth around Rs 106 billion were imported during the last fiscal year, generating approximately Rs 81 billion in government revenue. He said the sector was making a significant contribution to revenue despite total imports amounting to around Rs 1.8 trillion.
Shrestha also expressed concern that the government had not been sufficiently responsive to the problems faced by domestic industries, despite previous efforts to reduce high customs duties and encourage the establishment of industries within the country.
He welcomed the government’s plan to revive long-shuttered state-owned industries but said the problems faced by privately operated industries and businesses should also receive equal attention.
He urged the government not to create additional challenges for private-sector businesses in the name of protecting state-owned enterprises.
Shrestha said immediate restructuring, policy reforms and an investment-friendly environment were necessary to move the economy toward a new model. He added that the economy could be revitalized only through effective cooperation among the government, private sector and other stakeholders, backed by a clear strategy.
