December 15: The Rating Oversight Committee formed by the government in August for the sovereign rating of Nepal has not done anything else than orientation of concerned government bodies to conduct the independent assessment of the creditworthiness of the country. The government had decided to conduct the sovereign rating within five months to address the problem of difficulty in attracting foreign investment in Nepal.
But the committee formed under the chairmanship of the then Revenue Secretary Lal Shankar Ghimire is headed nowhere with just one month left as per the initial mandate. So far, it has only completed internal discussions and orientation of concerned bodies to prepare statistics for the rating. The committee is rescheduled to begin its work toward the end of December.
The committee is planning to select an international company for the rating process. A member of the committee told New Business Age that they will select either Moody’s, Fitch or Standard and Poor for the sovereign rating.
According to the committee, it has already organized orientation of staffers working at the Nepal Rastra Bank, Securities Board of Nepal, Financial Comptroller General’s Office, Anti-Money Laundering Investigation Department, and Insurance Board among others.
Niraj Giri, executive director of SEBON, said that the sovereign rating will be done by an international company secretly while the government bodies will be providing updated statistics to support the process.
One of the committee members Surya Acharya, who represents the donor agencies, said it was essential to give orientation to all agencies supporting the sovereign rating so they organized orientation in the first phase.
Acharya admitted that other works have not moved forward.
“We are yet to make necessary preparations for the sovereign rating,” he said.
According to Acharya, the committee has not selected any international committee to undertake the sovereign rating.
Deputy Governor of Nepal Rastra Bank Chintamani Shivakoti said the sovereign rating will determine the creditworthiness of the nation so it should not be carried out in haste.
The process has also been delayed due to the retirement of some members of the committee including the coordinator Ghimire. Another member Rewat Bahadur Karki has also retired from his post as chairman of SEBON. The current revenue secretary Shishir Dhungana is heading the committee at present.
Sovereign rating includes details of financial activities of a country, its ability to pay, the relation of a particular country with other countries etc.
According to Investopedia, sovereign credit ratings can give investors insight into the level of risk associated with investing in a particular country, including any political risk