Foreign assistance in Nepal

Out of the total federal government expenditure 87.93 percent is financed by domestic sources (revenue and domestic borrowing) whereas 2.1 percent and 9.98 percent of total expenditure are financed by foreign grant and foreign loan respectively for the fiscal year 2021/22. In the previous fiscal year 2020/21, these figures were 82.5 percent, 3.05 percent and 14.45 percent respectively.

* Consolidated Financial Statements 2021/22

Against this year's budget estimate of receiving foreign grants NRs. 63.38 billion in 18 entities, only NRs. 27.48 billion (43.36 percent) has been received, and against this year's estimate of receiving foreign loan NRs. 309.29 billion in 14 entities, only NRs. 130.70 billion (42.26 percent) has been received.

* The Auditor General's Sixtieth Annual Report 2023 Summary

- foreign assistances should be mobilized through national budgetary system and the consolidated funds only on the basis of the national interest and preferences by making the foreign assistances acquiring processes more transparent. 

-Foreign assistances should be mobilized only in the sectors or projects that would contribute to enhance the production and productivity in line with national interest, create employment, make import substitution and export promotion and give high yields, and contribute in becoming a self-reliant economy.

- In mobilizing the foreign assistances, the knowledge, skill and capability of the manpower engaged in foreign assistances should be enhanced, and the institutional structures should be strengthened and the coordination should also be established between the involved organizations

- Where possible, the policy of not accepting any conditional foreign assistance should be adopted.

- initiatives are to be taken to obtain the development assistances in accordance with the commitments and use the assistances in accordance with receipts

- budget amounts of foreign source should be appropriated only after certainty of the receipt of foreign assistances.

- system of mobilizing foreign assistances through national and international governmental Organizations (NGO/INGO) should be stopped, and such assistances should be mobilized through the government organizations only.

- propriate measures are to be taken for timely reporting of the foreign assistances being utilized by the Provinces and Local Levels to the Federal Government and sending the reimbursements requests within specified time.