Nepal Faces Annual Investment Gap of Over Rs 755 Billion to Meet SDGs

Nepal is projected to face an annual investment gap of over Rs 755 billion to achieve the Sustainable Development Goals (SDGs) by 2030. According to the National Planning Commission’s newly released report, “Sustainable Development Goals: Needs Assessment, Costing, and Financing Strategy 2081”, an average of Rs 30.24 trillion investment is required annually. However, only Rs 22.69 trillion is expected to be mobilized each year.

This creates an average annual financing gap of Rs 755 billion. The gap is calculated under the assumption of a 6% economic growth rate — if growth falls short, the financing gap will widen further.

The total investment needed between 2024 and 2030 is estimated at Rs 211.65 trillion. However, public, private, cooperative, and non-government sectors together are expected to fall short by Rs 52.85 trillion.

Specifically, the public sector requires Rs 136.47 trillion by 2030, but it will still face a shortfall of Rs 29.81 trillion, averaging Rs 426 billion annually. Similarly, the private sector needs Rs 72.73 trillion, but a gap of Rs 23.04 trillion is expected. Contributions from cooperatives, NGOs, and households have also been projected, but even with these, the overall financial gap remains substantial.

Program Director Anita Paudel from the Commission noted, “The biggest financing gaps are seen in infrastructure, sustainable cities, education, health, and water and sanitation sectors.” She also highlighted that even with a 10% growth in Official Development Assistance (ODA) and Foreign Direct Investment (FDI), the gap would persist.

Sector-wise Investment Requirements

According to the report, Nepal will need to invest around 45.4% of its Gross Domestic Product (GDP) annually to meet the SDGs.

• Industry, Innovation, and Infrastructure (Goal 9): 24% of the total investment needed, Rs 52 trillion.

• Clean Energy (Goal 7): 12%, Rs 25.14 trillion.

• Ending Poverty (Goal 1): 11%, Rs 25.15 trillion.

• Zero Hunger (Goal 2): Rs 158 billion annually.

• Good Health and Well-being (Goal 3): Rs 264 billion annually.

• Quality Education (Goal 4): Rs 298 billion annually.

• Gender Equality (Goal 5): Rs 6 billion annually.

• Water and Sanitation (Goal 6): Rs 182 billion annually.

• Sustainable Cities and Communities (Goal 11): Rs 223 billion annually.

• Climate Action (Goal 13): Rs 29 billion annually.

• Peace, Justice, and Strong Institutions (Goal 16): Rs 295 billion annually.

Strategy to Mobilize Resources

To meet the investment requirements, a mixed financing strategy has been outlined:

• 57.5% of total investment is expected to come from the public sector (with 70% from the federal government, 9% from provinces, and 21% from local governments).

• 34.35% from the private sector.

• 4.18% from cooperatives and NGOs.

• 3.95% from households.

The report stresses the need for reforms like expanding the tax base, integrating non-budgetary expenditures into formal budgeting, enhancing private sector participation, revising tax rates, controlling revenue leakage, and improving cost-effectiveness of public spending.

The Commission also recommends strengthening foreign aid mobilization, promoting Public-Private Partnerships (PPP) and Public-Community Participation (PCP) models, and identifying alternative financial resources at all federal, provincial, and local levels.