Kathmandu, Nepal - Representatives from Nepal’s federal, provincial and local governments, development partners and governance experts have called for stronger implementation, fiscal autonomy and functional cooperation as the country enters the next phase of federalism.
The call was made during a Policy Dialogue on Intergovernmental Relations (IGR) and Own Source Revenue (OSR) held at the Nepal Administrative Staff College, bringing together key stakeholders to discuss how Nepal can strengthen coordination and improve the effectiveness of its federal governance system.
Addressing the inaugural session, UNDP Nepal Resident Representative Kyoko Yokosuka highlighted five strategic shifts needed to advance federalism: moving from coordination to implementation; unclear institutional interfaces to functional cooperation; fiscal dependence to stronger fiscal capability; fragmented systems to interoperability; and pilot initiatives to government-owned systems that can operate at scale.
Yokosuka’s remarks underscored the need to translate Nepal’s federal governance framework into practical, accountable and sustainable systems capable of delivering better public services across all three levels of government.
Matthias Meier, Deputy Head of Mission at the Embassy of Switzerland, shared lessons from Switzerland’s federal experience, particularly on how provincial and local governments can exercise meaningful political and fiscal autonomy within a federal system.
Similarly, Dilaram Panthi, Joint-Secretary at the Ministry of Land Management, Cooperatives, Federal Affairs and General Administration (MoLMCFAGA), emphasized the importance of dialogue in building trust among the different levels of government. He also stressed the need for greater clarity regarding horizontal and vertical relationships so that future reforms can better respond to Nepal’s diverse local contexts.
The dialogue comes at an important stage in Nepal’s federalisation process, where strengthening intergovernmental relations and own-source revenue mobilisation remains essential for improving subnational fiscal capacity, accountability and service delivery.
Through the Provincial and Local Governance Strengthening Programme (PLGSP), and in partnership with the Government of Nepal, the European Union, Norway and Switzerland, UNDP Nepal is supporting efforts to strengthen institutional capacity, build trust among levels of government and promote more sustainable and financially capable subnational governance.
For Nepal’s federal system to deliver its full promise, the next phase will require more than policy coordination. It will require clear responsibilities, stronger institutions, greater fiscal autonomy, interoperable systems and implementation that reaches communities across the country.
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