Rebuilding Trust of Foreign Investors

The wave of protests that swept Nepal in early September not only shook streets and neighborhoods but also rattled investor confidence. The Gen Z movement, which began as a call for change and an end to corruption, turned unexpectedly violent on September 8 and 9, leaving businesses, property, and public security in disarray. The economy, which had only recently begun recovering from the pandemic, suddenly faced an unprecedented level of uncertainty. Foreign investors who had shown renewed interest in Nepal quickly took note of the turmoil. Nepal’s foreign investment outlook, which looked promising just weeks earlier, has now entered a precarious phase. Between mid-July and mid-August, the country secured Rs 24.10 billion for 127 projects, followed by Rs 8.98 billion for 109 projects in the following month—more than double the pledges seen in the first quarter of the previous fiscal year. But from mid-September to mid-October, commitments fell sharply to just Rs 2.04 billion for 75 projects. Even approved projects under the automatic route and regular procedures dropped significantly.