IMF completes governance and corruption diagnostic mission to Nepal, Reform roadmap underway

KATHMANDU — The International Monetary Fund has completed a major Governance and Corruption Diagnostic (GCD) mission to Nepal, marking a significant step in the country’s efforts to strengthen governance, reduce corruption vulnerabilities, and improve macroeconomic stability and investment confidence.

At the request of the Government of Nepal, an IMF capacity development team led by Jonathan Pampolina visited Kathmandu and Birgunj from April 20 to May 6, 2026, to carry out the assessment. The mission follows an earlier scoping visit conducted between January 12 and 21, 2026, and builds on Nepal’s structural reform commitments under the IMF-supported Extended Credit Facility (ECF) programme.

The diagnostic mission is aimed at identifying macro-critical governance weaknesses in state institutions, policies, and administrative practices that could undermine economic performance, fiscal sustainability, investor confidence, and public trust.

According to the IMF, the Governance and Corruption Diagnostic will produce concrete, prioritized, and sequenced reform recommendations to address corruption risks that continue to act as binding constraints on Nepal’s economic development.

The IMF noted that Nepal currently has a rare opportunity to pursue transformative governance reforms, especially following the formation of a single majority government with a strong reform mandate, which could help unlock stronger and more inclusive medium-term economic growth.

Broad Institutional Review

Reflecting the scope of the mission, the IMF team included specialists from several departments, including Fiscal Affairs, Monetary and Capital Markets, and Legal, working closely with Nepali authorities and stakeholders in line with the IMF’s 2018 Governance Framework.

The mission reviewed governance and corruption vulnerabilities across a wide range of core state functions, including:

• Public financial management, such as budgeting, public investment, state-owned enterprises, and public procurement;
• Revenue administration, including tax and customs systems;
• Financial sector oversight and regulation;
• Anti-money laundering mechanisms; and
• Rule of law and anti-corruption frameworks.

The IMF team also held consultations with oversight and anti-corruption institutions to assess the effectiveness of legal and institutional mechanisms designed to prevent, detect, and address corruption risks that could have wider macroeconomic implications.

Engagement with Private Sector and Civil Society

Beyond government institutions, IMF officials consulted extensively with representatives from civil society organizations, academic institutions, think tanks, the private sector, business associations, and international development partners.

According to the Fund, these discussions provided critical insights into Nepal’s governance challenges, institutional bottlenecks, reform priorities, and opportunities to improve transparency, accountability, and public trust.

The IMF expressed appreciation to Nepali authorities and stakeholders for their “open, candid, and constructive dialogue” during the mission and thanked them for their strong engagement throughout the process.

Draft Report Expected in Coming Months

Collaboration between Nepal and the IMF on the Governance and Corruption Diagnostic will continue in the coming months. The IMF said a draft report outlining findings and a prioritized reform roadmap will be shared with Nepali authorities for feedback before finalization.

The final report will be published subject to the consent of the Government of Nepal, potentially shaping future governance, fiscal, and institutional reforms aimed at improving Nepal’s business environment and strengthening economic resilience.

The diagnostic is expected to be closely watched by international investors, development partners, and the private sector, as governance quality and anti-corruption measures remain critical factors influencing Nepal’s investment climate, fiscal transparency, and long-term economic growth prospects.