September 14: Nepal received foreign direct investment of over Rs 227 billion from 55 countries as of mid-July this year.
According to a survey on foreign direct investment (FDI) conducted by the Nepal Rastra Bank, the FDI stocks in Nepal climbed to Rs 227.9 billion at the end of the fiscal year (FY 2020/21) with an increase of 14.8 percent compared to the previous year.
According to the survey report released by the central bank on Tuesday, the share of paid-up capital in Nepal’s FDI stocks is 53.9 percent whereas the reserves account for 31.6 percent, and the share of loans is 14.5 percent. The overall foreign direct investment has increased as the share of paid-up capital increased by 13.7 percent, says the report.
The NRB reports shows that foreigners have invested mostly in banks and financial institutions, insurance companies, projects hotels and restaurants.
According to the survey, the industrial sector accounts for about 60.5 percent of the total FDI stocks of which hydropower sector constitutes 30.8 percent and manufacturing sector 29.5 percent of total FDI stocks.
About 39.4 percent of total FDI stocks are in the service sector of which financial and insurance sector constitutes 26.9 percent, accommodation and food services sector 5.7 percent, and information and communication sector 4.8 percent.
The survey covered 197 firms out of 604 companies that have taken FDI approval from Nepal Rastra Bank as of the end of FY 2020/21. The Research Department of NRB informed that the details on FDI stocks were obtained from the financial statements of the surveyed companies as well as from standard questionnaire.
In terms of total FDI stocks, neighbouring India ranks top with Rs 75.8 billion followed by China (Rs 33.0 billion), Ireland (Rs 16.5 billion), Singapore (Rs 15.5 billion) and Saint Kitts and Nevis (Rs14.5 billion).
According to NRB, the capacity utilization of FDI-based manufacturing companies stands at 64.9 percent, while the profitability of FDI companies remains at 14.7 percent in the review year.