Presentation on Problems and

challenges of economic
environemnt of nepal

Prepared By:
Shishir Neupane
Prashant Thapa Magar
Basanti Bhatta
Sandeep Giri
Deepika Adhikari
Ganesh Mali
Major problems and challenges
Poverty:
 Poverty directly affects the people purchasing and spending power.
 Economy without people does not work so it requires a continuous
interaction with people and market.
 Nepal being a underdeveloped country ,17.4% of total population live
in the absolutepoverty line.

Trade imbalance and economic dependency:

 The trade imbalance of Nepal has been a major issues in the economic
development of the nation .
 The trend of trade imbalance has indicated the dependency of Nepal on
foreign nations.
Lack of physical infrastructure:

 Better the physcial infrastructure, better the economy.

 Most of the urban parts of Nepal has not been well nurtured with better
physical infrastructure due to several reasons which directly influences the
Nepalese economy.

Unemployment and Brain drain:

 Unemployment has been one of the major issue for economic hindrance.
 According to data,5.5% of total labor force are unemployed. People are willing
to move out of the country for better opportunities and resulting a problem
in economic status of nation.
Huge dependency on Agriculture:
 The main problem of economy in Nepal is the static dependency of the country
economy on agriculture.
 According to economic survey 2078/79 the populationrelying on agriculture is 66%
which is more than half of the population while the contribution of this sector on GDP
of the country is only 25.4%.

Prevalence of poor technology:

 The use of poor technology in Nepal has become a constraint to developmental work
as more time and human capital are required which in turn gives a low value.
 A huge capital and trained experts are the main requirement to foster new technology.
 Thus a deficiency of skilled man power and technology has created a problem in the
economy.
Corruption
 Nepal is ranked third as the most corrupted country. There has been unofficial
and public claims regarding the misuse of authority, favoritism, lobbying, bribing,
influencing, embezzlement in various public and private domain in Nepal.
  Corruption acts as an inefficient tax on economic activities which raises the
cost and decreases the productivity.
 The poor lifestyle, poverty, less investment in capital projects, negligible
operations etc. are the result of corruption.

Lack of Investment in Capital Projects

 Of the allocated fund, only few percentage of the fund actually go into
investment. Factor life liquidity, corruption, interest rate, project related
factors directly affect the actual investment in Capital Projects.
 Lack of capital investment will lead to low production and low production will
lead to low economic growth. Nepal is stuck in the loop and productive
capital investment will break this loop and lead to economic development.
Meagreness In Utilization Of Natural Resources
 The theoretical potential of hydropower is around 83000 MW while
technically feasible production is 44000 MW.
 Although the potential is really high, Nepal has been able to produce only
1233 MW till the fiscal year 2076/77 which is only 2.8% of the technically
feasible production of hydroelectricity.
 Nepal has favorable geography for various metallic and non-metallic minerals
like limestone, talc, clay red, granite, marble, gold, coal, iron magnesite,
cobalt, pyrite, etc. Although there is the availability of lots of minerals,
extensive exploration is yet to be done.
Uneven Topography

 Nepal is a land-locked country, the road transportation system is evident

while airways, railways & ropeways are still in the developing phase.
 Due to the absence of road transportation, remote areas of the country have
accessibility issues for the development of infrastructures like health posts,
drinking water facilities, electricity, internet & many more.
Lack of Industries and Enterprises

 This is the outcome of lack of capital projects. Nepalese investments are

either fulfilling the basic needs or are investment in regular non-risky
projects. Only around 11% of Nepal’s GDP comes from industry sector which
is very low for a economy.
 Industries and enterprises signify the independent nature of any economy.
Manufacturing and production reflect the competency of a country.

Gender Inequality

 Our culture scowls upon women working outside their homes. 54.54% of the
Nepalese population comprises women and ignoring more than half a
population in developmental works is a blunder.
 Based on the Nepal Labor Force Survey 2017-18, there are 125 females for
every 100 males in the working-age population but for every 100 employed
males, there are only 59 employed females.