Kathmandu, March 21
The World Bank’s Board of Executive Directors has approved a $200 million credit to Nepal to improve its public financial management.
The Fiscal and Public Financial Management Development Policy Credit is the first in a two-part program to support Nepal in establishing a framework for fiscal federalism and improved public financial management, said the bank.
“Nepal today is at a historic juncture as it transitions from a unitary to a federal democratic republic. Expectations are high that the new structure will deliver on greater equity and accountability,” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal. “This operation will help establish a fiscal framework that will ensure that the newly elected governments can deliver better services to all Nepali citizens.”
This operation will support implementation of the Intergovernmental Fiscal Arrangement Act; establishment of the National Natural Resources and Fiscal Commission; adoption of the Fiscal Responsibility and Budget Management Bill; strengthening of public financial management systems; improvements in budget execution; and reforms to improve revenue collection.
Commending Nepal for successfully concluding local, state and federal elections under the new constitutional framework, the Executive Directors welcomed the Bank’s strategic shift to supporting federalism to help avoid disruptions, improve service delivery and promote transparency and accountability. Directors encouraged the Bank to fully support Nepal’s transition to achieve inclusive development, especially in traditionally underserved areas, in coordination with other development partners.
The World Bank also approved a $66 million credit for the Phase 2 of the Rani Jamara Kulariya Irrigation Scheme.
