By:  Galab Bahadur Dhungana, .............

Attorney & Counselor at Law, United States   ............

Nepal has long treated its annual budget as a predictable formality, an exercise in balancing limited revenue against immediate political commitments. Today, that is no longer sufficient. The current fiscal moment is not about accounting but about whether the state can move beyond short-term management and construct a durable economic structure. With a national target of a 100 billion US dollar economy and sustained 7 percent growth, the challenge has shifted from incremental reform to structural transformation.
In this context, Swarnim Wagle’s remarks at the United Nations Economic and Social Council in April 2026 are instructive because he acknowledged that Nepal continues to rely heavily on domestic borrowing and indicated that this model is insufficient to sustain long-term growth. He emphasized the need to mobilize private capital, identified infrastructure financing gaps as a major constraint, and called for improvements in governance to create a more investment-friendly environment.
The call to reduce reliance on internal debt is fiscally sound, yet Nepal borrows domestically not merely by policy choice but because it lacks large-scale productive sectors capable of absorbing capital efficiently. The problem is not borrowing itself but the destination of that capital. Without creating strong domestic demand anchors, any shift away from borrowing risks becoming fiscal tightening without growth. This structural imbalance is visible in the composition of public finance, where recurrent expenditures, including salaries, pensions, and administrative costs, account for roughly 61 percent of the budget, while capital expenditure remains constrained at around 15 percent. Meanwhile, total public debt has approached 3 trillion Nepali rupees, approximately 22.5 billion US dollars, with nearly 20 percent of the budget allocated to debt servicing. Mathematically, our debt servicing now exceeds our entire capital expenditure budget, meaning a growing share of national resources is being used to finance past liabilities rather than future productivity.
At the global level, the finance divide highlighted in international forums is a legitimate concern, yet for Nepal the constraint is more specific. The issue is not simply access to capital but the bankability of projects. Nepal does not lack capital alone; it lacks a pipeline of technically credible, risk-structured, and institutionally supported investments. Global capital for climate and infrastructure projects is available, but it does not respond to rhetoric. It responds to clarity, structure, and credibility. Bridging this gap requires more than advocacy because investors seek confidence grounded in data-driven systems rather than sentiment.
This makes the emphasis on private and diaspora capital both necessary and incomplete. Diaspora capital is not waiting for an invitation; it is waiting for institutional trust. Its limited scale to date reflects not a lack of interest but a lack of predictable policy, credible project structures, exit mechanisms, and protection against currency and regulatory risk. Unlocking this capital requires moving beyond general appeals toward structured public-private partnership frameworks that align incentives and reduce uncertainty.
The ambition of a 100 billion US dollar economy growing at 7 percent annually sharpens the stakes. Such growth cannot be sustained through remittances, tourism, or fragmented service sectors alone. Remittance inflows already exceed 2.1 trillion Nepali rupees, approximately 15.7 billion US dollars, accounting for nearly 30 percent of the gross domestic product. This model masks a deeper contradiction because Nepal exports labor while importing consumption. It effectively taxes its citizens twice, first through their labor abroad and again through the imported goods purchased with their earnings.
Nepal’s greatest unrealized advantage lies in clean energy, yet it remains underutilized. The country exports electricity at low prices while importing expensive fossil fuels. Petroleum products alone account for approximately 16 percent of total imports, costing over 300 billion Nepali rupees, around 2.25 billion US dollars annually. By domesticating energy-intensive industries, we convert the 300 billion Nepali rupee annual drain on fossil fuels into a domestic investment in energy security and agricultural productivity. Energy-intensive industries such as green hydrogen, ammonia, and green urea production can convert surplus electricity into strategic economic output while linking energy security with agricultural productivity. Electrified manufacturing and digital infrastructure, including data centers, can form the backbone of a modern industrial ecosystem capable of attracting foreign investment and integrating Nepal into global value chains.
At the same time, Nepal’s environmental integrity should be viewed not only as a constitutional right but as an economic asset. In a decarbonizing global economy, clean energy and low-carbon production systems can attract climate finance, ESG-aligned capital, and premium export markets. The opportunity is not just to grow, but to grow differently.
Realizing this transformation requires discipline in public spending and coherence in policy execution. Too many resources are currently directed toward small, low-impact projects that are politically visible but economically insignificant and do not generate long-term value. Public investment must be evaluated not by visibility but by its capacity to enhance productivity, create jobs, and generate future revenue. More fundamentally, Nepal must align its financial, industrial, and energy strategies into a unified economic architecture through data-driven fiscal discipline. Fragmented planning across ministries will not deliver structural change. What is required is a coordinated approach that connects capital mobilization with sectoral priorities and implementation capacity, moving projects from concept to bankability and ultimately to financial closure.
The question is no longer whether Nepal can grow. The question is whether it can build an economy capable of receiving, deploying, and multiplying capital at scale. Dr. Wagle’s ECOSOC remarks articulate the why of transformation. The task now is to define the how. Future prosperity will not be determined by the clarity of our intentions but by the strength of the economic architecture and data-driven fiscal discipline we build..