Nepal - Public Financial Management Multi-donor Trust Fund Progress Report : January - June 2025

Overview & Synopsis

The Government of Nepal, with the public financial management multi-donor trust fund (PFM MDTF) support, has finalized the National Public Financial Management Reform Strategy 2025-2030, a flagship reform agenda aimed at strengthening the credibility, efficiency, and transparency of Nepal’s PFM systems. The Strategy builds on findings from the third federal Public Expenditure Financial Accountability (PEFA) Assessment completed in April 2024, which provided an evidence base for identifying reform priorities. The Strategy development process was notably inclusive and participatory, involving more than 700 stakeholders from all tiers of government - federal, provincial, and local - through regional consultations, thematic workshops, and field missions to Madhesh, Gandaki, and Koshi provinces. Structured around seven strategic pillars, ranging from budget reliability and execution to fiscal risk management, intergovernmental fiscal transfers, and external scrutiny, and three cross-cutting pillars, covering capacity, information and communication technology (ICT) and climate and gender-responsive PFM - the Strategy outlines a comprehensive and ambitious roadmap for strengthening PFM systems at all levels of government. Each pillar is anchored in specific, results-oriented objectives, including improving macro-fiscal forecasting, streamlining procurement, modernizing revenue systems, enhancing debt management, and institutionalizing asset oversight. The Strategy represents a major milestone in Nepal’s commitment to sound public financial governance and provides a solid platform for continued PFM MDTF engagement and support in the years ahead.