Nepal and international financial institutions forge agreement on disbursement harmonization

KATHMANDU: In a significant development aimed at bolstering Nepal’s development endeavors, the Government and six Multilateral Development Banks (MDBs) and International Financial Institutions (IFIs) have joined hands to harmonize disbursement procedures. This collaborative effort seeks to enhance operational efficiency and propel the nation closer to achieving its development goals.

The consensus was reached during a pivotal two-day ‘MDBs Disbursement Harmonization Workshop’ held in Kathmandu on March 25-26, 2024. Organized in close partnership with the Ministry of Finance, the workshop brought together key stakeholders from government bodies and financial institutions.

Dr. Krishna Hari Pushkar, Secretary of the Ministry of Finance, emphasized the importance of a unified disbursement system in facilitating fund allocation and ensuring timely disbursement to drive tangible development outcomes. He stressed the need for concerted efforts among MDBs and IFIs to achieve these objectives effectively.

The agreement outlines several areas of focus for future collaboration:

-Efforts will be made to harmonize the flow of funds, reporting mechanisms, and legal frameworks across the three tiers of government.
-Consistent reporting templates will be established across MDBs and IFIs operating in Nepal to reduce administrative burdens on the government.
-Steps will be taken to strengthen and align the country’s financial systems with those of MDBs and IFIs to the greatest extent possible.

Pamela O’Connell, Vice President and Controller at the World Bank, underscored the urgency of harmonization amidst unprecedented challenges. She reaffirmed the World Bank’s commitment to collaborating with co-financing partners to enhance operational efficiency and drive impactful development outcomes.

The agreement paves the way for the formulation and phased implementation of a Memorandum of Understanding between the Government and MDBs/IFIs. The Kathmandu Declaration serves as a blueprint for similar initiatives in other countries, underlining Nepal’s leadership in this domain.

Hari Prasad Mainali, Financial Comptroller General, reiterated the government’s dedication to maximizing budget allocation utilization and strengthening transparency and accountability in public financial management systems.

The workshop provided a platform for in-depth discussions on disbursement-related opportunities and challenges. Participants explored strategies for supporting MDBs and IFIs operations in Nepal, with a focus on adapting to the federalism transition and enhancing project implementation at provincial and local levels.

The harmonization of disbursement practices marks a significant milestone in Nepal’s development journey, reflecting a concerted effort to optimize resources and drive sustainable growth and poverty reduction initiatives.

Fiscal Nepal |
Wednesday March 27, 2024, 02:14:29 PM |

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