USAID launches $19 million Trade and Competitiveness project in Nepal

The grant project is part of the continuation of 75 years of partnership between Nepal and the US, says the USAID/Nepal director, government, and private sector hopeful of positive outcomes.

NL Today

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Kathmandu: The United States Agency for International Development/Nepal has launched the five-year Trade and Competitiveness project in Nepal. The project entitled ‘Trade and Competitiveness Activity’ was jointly launched by the Ministry of Industries, Commerce and Supplies and USAID/Nepal in Kathmandu on Tuesday.

The five-year $19 million investment is expected to increase the competitiveness of Nepali enterprises in targeted sectors with high growth and employment potential. USAID will collaborate with Nepal’s Ministry of Industry, Commerce, and Supplies (MOICS) to help businesses facilitate new trade and investment opportunities, improve their access to market-based financial and non-financial services, and boost productivity.

According to the Ministry of Industry, Commerce, and Supplies, the project will be implemented under the broader assistance agreement made between the USAID and government of Nepal. The Ministry of Industries Commerce and Supplies will serve as the major coordinating agency.

Trade and Competitiveness project mainly aims to improve access to market-based financial and non-financial services, increase productivity in sectors with high growth and employment potential and improve the investment climate and business enabling environment, especially for targeted sectors.

According to USAID, in five years the project aims to increase availability of financial services for micro small and medium sized enterprises, apart from strengthening capacity of business development service providers and diversifying service offerings, minimizing value chain and market gaps, improving investment climate and business enabling environment, implementing transparent and inclusive reforms, strengthening trade felicitation and assisting 1500 firms to improve their productivity and competitiveness.

“This investment in Nepal’s private sector will create jobs and increase incomes for women, youth, and marginalized groups,” said USAID/Nepal Mission Director Sepideh Keyvanshad. “This activity is just one example of the broader cooperation between Nepal and the US to strengthen the economy and improve the livelihoods of the Nepali people.”

She also clarified that the Trade and Competitiveness project is purely a grant. “The USAID only provides grants. It’s purely a grant,” she said. She further mentioned that this grant is part of the continuation of 75 years of the partnership and relationship between Nepal and the US. “It is a part of 60 years of development partnership.  USAID has been working in the health sector, education sector and agriculture sector for several decades. This is the continuation of everything that the USAID has been doing for the development of Nepal,” Keyvanshad emphasized.

The representatives from the government and the private sector lauded USAID for launching the project and expressed hope that it will contribute to increasing competitiveness of Nepal’s business and trade.  

Gobinda Bahadur Karkee, Joint-Secretary at Ministry of Industries Commerce and Supplies, applauded USAID’s partnership with the Ministry and the continued investment in Nepal. “I hope this activity will provide great support to diversify the service offerings of firms and improve their productivity, making them global competitors,” he said. While mentioning that Trade and Competitiveness Activity is going to be an important intervention for the private sector’s growth and development in Nepal he said that it will also contribute to improving the investment climate in Nepal.

“The primary goal of the project is to increase Nepali private sector’s competitiveness in the global value chain which is fully aligned with the priority areas of the ministry,” said Karkee. He said that the USAID project will contribute to Nepal’s economy after LDC graduation as well. “Nepal is going to graduate from LDC status to developing country in 2026. After graduation, I believe the Competitiveness Activity will directly contribute to increasing Nepal’s exports.”

Speaking on the occasion, Bhawani Rana, Former President of Federation of Nepali Chamber of Commerce and Industries (FNCCI), said that USAID’s Trade and Competitiveness project helps promote Nepal’s agriculture, private sector and tourism. “Nepal is blessed with natural resources. Agriculture sector, private sector and tourism have a competitive edge. Inception of this activity is timely and it will help improve the health of Nepali economy,” said Rana. According to her, the project is timely in the context of Nepal aiming to graduate from LDC status in 2026 and meeting the sustainable development goals by 2030 thus becoming a middle income country. “There is a huge resource gap to meet this target. Trade deficit is continuously rising and it is alarming for the private sector as well as the country. In this scenario, the inception of this activity is very timely,” said Rana.

The Trade and Competitiveness project is expected to advance Nepal’s ambitions to increase and diversify high-value exports such as local produce, tourism experiences, and digital services.