Nepal’s economy hit hard by social media ban, negative signal sent globally

KATHMANDU: Nepal’s government decision to ban 26 unregistered social media platforms, including Facebook, Instagram, and X (formerly Twitter), has triggered nationwide disruptions in communication, online business, and employment. Economists and technology experts warn that the ban has sent a deeply negative message to the global community at a time when Nepal is seeking foreign direct investment (FDI) and digital transformation.

In today’s information and technology era, social media has become an integral part of daily life. From instant communication to news consumption, platforms like Facebook, WhatsApp, Instagram, and X have served as the cheapest, fastest, and most reliable channels for millions of Nepalis at home and abroad. They connect families scattered across the world and act as powerful tools for trade, tourism, and innovation.

Ban Shakes Online Businesses and Freelancers

Nepal’s small and large-scale online businesses heavily rely on Facebook, Instagram, and Messenger to interact directly with customers. With these platforms restricted, entrepreneurs fear losing direct contact with consumers, resulting in declining sales and revenue.

Digital creators and freelancers are among the hardest hit. Thousands of Nepali youths earn income through foreign clients or by monetizing their content on social media. The sudden shutdown cuts off their livelihoods, fueling unemployment concerns.

Economists say the impact of the ban is far-reaching, touching sectors from e-commerce to banking, tourism, and remittance-based households. Tourism operators, hotels, and guides who depend on WhatsApp and Messenger to maintain direct communication with foreign clients are now struggling to coordinate bookings and travel services.

Economists Warn of Broader Implications

Economist Gyanendra Adhikari argues that shutting down Facebook and other platforms will hardly affect global giants like the United States, but it will gravely damage Nepal’s own economy. “If the US one day says the dollar cannot be used in Nepal, our economy collapses overnight,” he said, warning that multinational corporations could retaliate against countries that disrupt their platforms.

Adhikari also noted that Nepal Telecom and Ncell — the country’s two largest telecom companies — could see their businesses cut in half, as a large portion of their traffic comes from social media usage. He cautioned that the shutdown not only weakens digital businesses but also accelerates unemployment and reduces overall telecom revenue.

Economist Sharad Prasad Trital believes the shutdown will not heavily affect infrastructure development, since Nepal has not integrated technology extensively into construction. However, he stresses that social media plays an irreplaceable role in family and social connections. “Nepalis are spread across the globe, and social media is their bridge home. If that bridge collapses, frustration and anger grow,” Trital explained. He emphasized that banning platforms instead of regulating them sends a “globally negative message” about Nepal’s governance.

Economist Dilanath Dangal underlined that students, researchers, and educators lose a vital learning tool when platforms are shut down. “Closing social media may silence abusers, but it destroys legitimate sources of income and communication. The government should focus on regulation, not prohibition,” he said, arguing that registration and oversight of platforms are better alternatives than outright bans.

Technology Experts Raise Concerns

Digital architect Bibek Shumsher JB Rana warns that the ban could backfire. “Many Nepali apps are also unregistered. If we close foreign platforms citing registration, other countries could block Nepali apps too,” he said. Jabara further argued that the government failed to conduct homework before ordering mass closures, creating risks for the economy and supply chains.

“Regulation means setting legal boundaries — deciding what kind of communication or transaction is allowed. That’s far more effective than blanket bans,” Jabara emphasized. According to him, the larger issue is not whether apps run or not, but whether Nepal’s economy continues to run or stalls.

Former Chairman of the High-Level Information Technology Commission, Manohar Bhattarai, echoed that sentiment. “The government should regulate and supervise, not impose sweeping bans that harm Nepal’s international image,” he said. Bhattarai warned that social media oversight should avoid infringing on citizens’ freedom of expression, which is fundamental in a democracy.

Global Message and Short-Term Nature of Bans

Observers also note that social media bans in Nepal rarely last long. TikTok was banned for about six months before being reopened, and Telegram — previously shut down — is now in the process of being reinstated. Analysts believe the current ban, too, will be temporary, since the government’s main aim is to enforce platform registration.

Economist Govinda Nepal pointed out that many Nepalis earn directly through social media. While acknowledging the financial disruptions, he called the government’s registration policy “reasonable” because it would generate tax revenue for the state. “The decision may be painful now, but if platforms register, Nepal gains revenue and legitimacy,” he said.

Negative Impact on Global Perceptions

Despite these reassurances, experts agree that Nepal has sent a discouraging signal to the world. At a time when the country is trying to attract FDI, promote digital transformation, and expand its IT services, the ban creates uncertainty for investors. Global corporations may view Nepal as an unstable regulatory environment where sudden policy shifts can disrupt business operations.

This perception could slow down investment in Nepal’s digital economy, ICT sector, and e-commerce growth. Tourism, too, risks losing ground as direct communication channels between international travelers and local service providers remain blocked.

The Road Ahead

Ultimately, Nepal faces a critical choice: regulate and formalize global platforms or continue banning them in ways that undermine its own economic growth and global standing. Economists stress that registration should be implemented through clear legal frameworks rather than abrupt shutdowns.

For now, freelancers, entrepreneurs, and telecom companies brace for losses, while families separated by migration struggle to maintain contact. The ban has not only disrupted livelihoods but also raised questions about Nepal’s readiness to embrace a technology-driven economy.