The recent two-day Third Investment Summit in Nepal of 2024 concluded amidst mixed sentiments. Despite efforts to attract investments, the outcomes left much to be desired. Observers noted a lack of positive signals regarding the country’s investment climate. These raised concerns about the efficacy of the Nepal Investment Board’s messaging.
With over 2,500 delegates, including 800 from abroad, the summit showcased 154 projects, seeking expressions of interest for 19 projects only. However, the absence of significant investment agreements underscored persistent reservations among investors.
What went wrong in the investment summit?
- Coordination Deficiencies: One of the foremost issues was the lack of coordination among government agencies. This discord not only hindered the seamless execution of the event but also sent negative signals to potential investors. It gave an unreliable atmosphere regarding the government’s ability to work cohesively towards fostering a suitable investment climate.
- Management Loopholes: The summit was marred by management loopholes, which likely detracted from its effectiveness. These shortcomings have ranged from logistical issues to organizational inefficiencies, impacting the overall experience for participants and potentially deterring investment interest.
- Policy Concerns: Despite efforts to convey a message of bipartisan consensus and policy continuity, international investors remained skeptical. Concerns regarding investment security, tax systems, market dynamics, and bureaucratic red tape persisted. It indicated a need for more concrete reassurances and clearer policy frameworks.
- Last-Minute Amendments: The eleventh-hour amendments to nine acts through ordinances in the investment summit may have introduced uncertainty and eroded confidence among investors. Such abrupt changes can create ambiguity and undermine the predictability necessary for long-term investment planning.
- Lack of Significant Agreements: Despite showcasing numerous projects and attracting many delegates, the summit failed to yield significant investment agreements. This suggests a misalignment between the presented opportunities and investors’ expectations or unresolved concerns that deter commitment.
- Inadequate Communication: The messaging from the Nepal Investment Board may have fallen short in conveying a positive narrative about the investment climate. Effective communication is crucial for instilling confidence and attracting investments and a good amount of Foreign Direct Investment (FDI). Any shortcomings in this regard could have had much more severe repercussions in the investment summit.
Despite this, some agreements were signed, reflecting pockets of optimism. These included partnerships between Nepali and international entities across various sectors. The agreements of potential projects include data services, and hospitality, signaling potential avenues for collaboration and growth.
Meanwhile, the Department of Industry’s approval of investments totaling Rs 9.13 billion for diverse projects signals ongoing efforts to streamline investment processes. The introduction of an automated system for foreign investment approvals is a step towards enhancing efficiency and investor confidence.
As Nepal strives to position itself as an attractive investment destination, bridging gaps in coordination, addressing investor concerns, and streamlining approval processes will be paramount. The investment summit may have highlighted challenges, but it also offered glimpses of opportunities for fostering sustainable economic growth and development.
