Localisation Of Foreign Aid In Nepal

Nepal has long depended on foreign aid for development and humanitarian efforts. However, despite consistent international financial support, aid effectiveness remains limited due to donor-driven agendas, tied aid practices, weak governance, lack of local ownership, and fragmented implementation. The Ministry of Finance's 2024/25 report on foreign aid reveals extensive international support but underlines challenges in localizing aid. Many projects continue to rely on external technical assistance and consultants, limiting opportunities for building local capacity. A genuine localization approach would require a stronger focus on funding and transferring skills to Nepali institutions. However, in Nepal, direct funding to government of Nepal, local NGOs and community groups is limited, with international contractors and International Non-Governmental organisations (INGOs) often leading projects.