Submit your Article

The provincial economic activity study of the Nepal Rastra Bank (NRB) has shown that the average capacity utilization of the manufacturing industries operating in Madhesh Province has increased by 10 percent in the last fiscal year. The 'Economic Activities Report of Madhesh Province' unveiled by NRB on Monday shows average capacity utilization of industries was 59.16 percent in FY 2021/22 compared to 49.76 percent in FY 2020/21. On the other hand, the average production growth of the industries in Madhesh Province in FY 2021/22 was 5.23 percent compared to 12.10 percent in FY 2020/21. According to the report, the average capacity utilization of industries in the Madhesh Province improved in the last fiscal year mainly due to the resumption of full operation of many industries resumed operation following the decline in Covid-19 pandemic cases, the surge in the demands, and ease in the supply of raw materials. The report states that industries producing fabricated metal goods had the highest capacity utilization of 94.72 percent, and the paper industry had the lowest capacity utilization of 10.79 percent. According to NRB, the five industries with the highest capacity utilization in the last fiscal year were fabricated metal goods, beverages, grain and animal feed, tobacco products, and plastic goods manufacturing. In FY 2021/22, the average capacity utilization of fabricated metal goods industries, beverages industries, grain and animal feed industries, tobacco products industries, and plastic manufacturing industries stood at 94.72 percent, 92.08 percent, 91.68 percent, 86.46 percent, and 71.20 percent, respectively. The industries that saw their average capacity utilization decline in the last fiscal year were the producers of vegetable ghee and oil, other food items and cloth. The capacity utilization of vegetable ghee and oil industries decreased by 5.29 percent, cloth industries by 14.76 percent, and other food items industries by 28.35 percent respectively in FY 2021/22. In FY 2020/21, the five industries with the highest capacity utilization in Madhesh Province were textiles, beverages, fabricated metal goods, grain and animal feed, and plastic manufacturing industries, whose capacity utilization was 84.70 percent, 71.77 percent, 65.23 percent, 59.83 percent, and 58.84 percent respectively. Leather goods, and beverages production increased According to the report, In FY 2021/22, the production of the leather and leather goods manufacturing industry increased the most by 51.51 percent, while the production of the plastic manufacturing industry decreased the most by 39.50 percent. The top five industries having higher growth in production in FY 2021/22 were leather and leather goods, beverages, fabricated metal goods, other food products, and paper and paper materials manufacturing. The production growth of leather and leather goods industries stood at 51.51 percent, beverages industries at 41.24 percent, fabricated metal goods at 13 .78 percent, other food products at 10.80 percent, and paper and paper materials manufacturing industries at 10.28 percent. In FY 2021/22, the production of industries producing tobacco products, ghee and oil, grain and animal feed, and plastic products has decreased by 9.45 percent, 11.01 percent, 13.78 percent, and 39.50 percent respectively. BFIs industrial loans to industries decline in last FY According to NRB, the total credit flow from banks and financial institutions (BFIs) to the industries in Madhesh Province has shrunk by 2.94 percent in the last fiscal year. The BFIs disbursed industrial loans worth Rs 102.13 million in FY 2021/22 compared to Rs 105.23 billion in FY 2020/21. The highest loan disbursement was in the Parsa district and the lowest was in the Saptari district. Of the total loan disbursed, 56.95 percent was for the industries in the Parsa district. As most of the industries in Madhesh are based in Parsa, the loan disbursement in the district is the highest. Majority of loans went to non-food production industry  Of the total loans disbursed by the BFIs to industries in the last fiscal year, 52.39 percent was for non-food production industry, 30.57 percent for agriculture-forestry and beverage production industry, 7.62 percent for production of metal, machinery and electronics and metal goods industry, 7.27 percent for construction industry, 1.66 percent for mining industry, and 0.48 percent for electricity, gas and water industry.

More than 300 Chinese vehicles have entered the country through the Rasuwagadhi border point. According to the Department of Customs, 305 vehicles of various categories entered Nepal through the friendship bridge in Rasuwagadhi since the start of this fiscal year. A total of 132 electric vehicles, 82 electric vans, 11 Hilux vehicles, 2 loader equipment, and 78 fuel cars have been imported through the customs point. With the operation of the Tatopani border point not being regular, the imports of vehicles from Rasuwagadhi have increased in the last few years. Vehicle importers in Nepal prefer the Rasuwagadhi point over Tatopani to import Chinese vehicles. In the first five months of the current fiscal year, Nepal has imported 198 electric vehicles, of which 132 were brought through the Rasuwagadhi border point. The importers of Neta and BYD four-wheelers have used this trade route for their imports in the current fiscal year. In the last fiscal year, a sizable number of MG EVs also made their way to Nepal through this border point. With government policies favoring the sales of EVs of 100kW motor capacity, there has been a surge in the imports of EVs up to 100 kW in this fiscal year. The imports of 100 kW EVs from China have increased in the first five months of the current fiscal year. Nepal has imported 188 units of EVs of 100 kW capacity in this fiscal compared to 70 units in the same period of the last fiscal. As the government levied excise duty on top of the existing customs duty on electric vehicles above 100 kW capacity, there has been a decline in the imports of EVs above 100 kW from China. In FY 2022/23, only 10 units of EVs above 100 kW capacity have been imported from China compared to 548 units in the same period of FY 2021/22.

2023 looks promising for Nepali tourism. The recovery seen in tourist arrivals in 2022, the opening of Pokhara Regional International Airport on January 1, and the Chinese government's announcement of resuming outbound travel of its citizens have rekindled new hope for the Nepali hospitality sector that braved over two disastrous years of the Covid-19 pandemic. With the tourism sector gradually coming out of the impact of the pandemic in 2022, travel trade entrepreneurs say there is growing optimism that there would be a surge in foreign tourist arrivals this year. After two years of negative growth, tourist arrivals touched the 600,000- mark in 2022. Tour operators say they are receiving increasing inquiries from major source markets of late. And, Ministry of Culture, Tourism and Civil Aviation and Nepal Tourism Board (NTB) have said they are now targeting 1 million tourists in 2023. Binayak Shah, First Vice President of Hotel Association Nepal (HAN) said the initial trends in tourism are encouraging. "The inquiries we've been receiving from international visitors of late have given new hope. Indian tourists are again coming in big numbers while the Chinese government has also announced resuming outbound travels for its citizens," said Shah. In 2022, tourist arrivals reached over 600,000 without any significant contribution from China, which was the second-largest source market for Nepal. Most of the flights from China to Nepal have remained suspended after the northern neighbor suspended outbound tourism since the early days of the Covid-19 pandemic. Now, the Chinese government has announced that they would resume outbound travel of Chinese Citizens from January 8. "China will remove restrictions to enter China from January 8 and resume the outbound travel of Chinese citizens in an orderly manner," said Wang Xin, Charge de Affaires of the Chinese Embassy in Kathmandu while addressing the inauguration of Pokhara Regional International Airport on Sunday. Before the pandemic-related travel restrictions began in early 2020 in Nepal and across the world, China was the second largest source market for Nepal after India as the country welcomed 169,543 tourists from the northern neighbor. A total of 1.19 million foreign tourists visited Nepal in 2019 before the pandemic hit the world. Nepali tour operators say they are hopeful of a huge surge in Chinese tourist arrivals in Nepal in 2023. “With the normalization of flights with China, we can welcome at least 100,000 Chinese tourists in 2023," said Bishwesh Shrestha, owner of C&K Travels which specializes in Chinese tourists. Shrestha said tour operators also plan to travel to China for tourism promotion this year if the Covid-19 situation improves there. In 2022, Nepal welcomed 9,595 Chinese tourists, according to NTB. According to Shrestha, there is still some uncertainty as to when other Chinese airlines would resume their flights to Nepal. While China Southern and Air China are now operating their flights to Kathmandu, other airlines - China Eastern, and Sichuan Air are yet to resume their Kathmandu flights. "Hopefully, there will be some clarity by mid-January," said Shrestha, adding, "We hope there will be more flights from China by the end of January." According to tour operators, the fact that many countries still have some kind of reservations about letting Chinese tourists enter their countries could bring a large number of Chinese tourists to Nepal. "If there will be normalization of flights from China as that of the pre-Covid period, we could welcome more than 100,000 Chinese tourists in 2023," said Shrestha. The NTB on its 24th anniversary said that it aims to attract at least one million foreign tourists in 2023. Travel trade entrepreneurs say the concerned stakeholders including government agencies must act assertively to realize the 1-million target. "All stakeholders associated with tourism must convey the message that Nepal is ready to welcome international tourists effectively and quickly. The more effectively we impart this message, the more tourists Nepal will welcome in 2023," said Shah. According to tour operators, the airlines that bring a large number of foreign tourists to Nepal - Turkish Airlines, Qatar Airways, Korean Air along with Chinese airlines have not started their full-fledged operations in Nepal. As for the European tourists, tour operators say the flow will not increase till August/September. There are now three international airports after the inauguration of Pokhara International Airport on Sunday. Other two international airports—Tribhuvan International Airport in Kathmandu and Gautam Buddha International Airport are already operating. The Tribhuvan International Airport has been facing prolonged traffic congestion while new airports are yet to be promoted for international airlines. Tourism entrepreneurs say while Nepal has now two international airports, their full utilization is still in question. "The Nepal government must do marketing these two new airports. If we improve tourism infrastructure that includes air connectivity also, it could boost the arrivals," said Shah, "These airports, if operated properly, can handle more travelers and help increase the arrivals of foreign tourists.” said the tour operator. The government also has its own tourism revival plans. In late December, the Ministry of Culture, Tourism, and Civil Aviation unveiled the strategic framework designed for the Nepal Tourism Decade 2023-2032. As per the framework, Nepal plans to bring in 3.5 million tourists, excluding India and those coming overland, in the next 10 years. The plan also aims to bring the tourist numbers to pre-pandemic levels by 2024 and increase arrivals in each subsequent year by 15 percent. Shah said the announcement of 2023-2032 as Nepal Tourism Decade by the previous government should be owned by the new government.  

The banking sector will see the successful completion of mergers of four commercial banks - Nepal Investment Bank-Mega Bank, Global IME Bank-Bank of Kathmandu, and an acquisition - Prabhu Bank-Century Commercial Bank by the second week of January. The Global IME-Bank of Kathmandu merger will come to a logical conclusion on January 9 with the start of their integrated business. Post-merger, the merged entity will be named Global IME Bank. Similarly, the integrated business of Nepal Investment Bank and Mega Bank will start on January 11. The Nepal Investment-Mega Bank merger will take place with a swap ratio of 1:09. Post-merger, the bank will be known as Nepal Investment Mega Bank with paid-up capital of Rs 34.43 billion. The central bank's board meeting on December 29 has given the final approval for the merger between Global IME Bank and Bank of Kathmandu. The same meeting also gave final approval for the merger between Nepal Investment Bank and Mega Bank. After the merger, the Chairman of the Global IME Bank will be Chandra Prasad Dhakal while Ratna Raj Bajracharya, the current CEO of Global IME will continue to be the chief executive of the new entity formed after the merger. Prithvi Bahadur Pande will be the chairman of Nepal Investment Mega Bank while Jyoti Prakash Pandey will be the CEO. Similarly, Prajanyaraj Bhandari and Kavi Tivrewala from Nepal Investment Bank will become directors after the merger. Similarly, Gopal Khanal, Muktiram Pandey, and Madan Kumar Acharya from Mega Bank will become directors after the merger. One director of Nepal Investment Bank is yet to be decided. With NRB giving find nod to Prabhu Bank's acquisition of Century Commercial Bank, both banks have decided to start an integrated business on January 13. Post-acquisition, the bank will be named Prabhu Bank. Prabhu Bank is acquiring Century Bank with a swap ratio of 1:1. The total number of commercial banks that had reached 32 in 2014 will come down to 22 this year if all these mergers and acquisitions materialize.