05 August, 2024
ICT is one of the emerging sectors that can transform Nepal’s economy by providing alternative to producing physical goods whose productivity and mobility is severely limited by difficult terrain and landlocked ness of Nepal. While e-commerce and gig economy were already gaining traction, the pandemic has accelerated the process as the government and businesses in Nepal are adopting digital mechanism. This trend can also be attributed to the steady penetration of digital equipment and broadband internet in Nepal.
Policies, Strategies and Progress so far
The Digital Nepal Framework (DNF) 2019 is a policy framework through which the government of Nepal outlines its digital initiatives. Under the framework there are 80 digital initiatives that are further divided into eight sectors – digital foundation, agriculture, health, education, energy, tourism, finance and urban infrastructure. The framework envisions digital transformation in these sectors that can help Nepal achieve its SDG goals by 2030. The fifteen five-year plan of Nepal has also prioritized the implementation of the DNF 2019 where ICT infrastructure, cyber security and digital literacy are mentioned as key strategies. In addition, there are several other policies such as National ICT Policy 2015 and National Broadband Policy aiming to complement ICT sector by expanding broadband access and reach nationwide. Also, the Nepal Cyber Security Bylaw has been enacted in 2020 to handle cyberattacks and cybercrimes.
The Government has made efforts to establish an e-payment system in the country. Payment for various services like – road tax, traffic fines, blue Digital Infrastructure and Technology Integration: Leapfrogging Opportunities 24 INFRASTRUCTURE FOR GROWTH book renewal fee, no objection letter payment among others can be made online. Even the provincial and local government are making concrete efforts to digitize services for citizens. Apps such as Local Levels Mobile App and Smart Palika have been developed with primary objective of disseminating information regarding the government services such as utility payment and filing taxes. The Nepal Rastra Bank (NRB) implemented the first phase of National Payment Gateway System in November 2021 that brings all the banks and digital payment vendors together allowing the NRB to monitor all payment systems. The NRB has also emphasized the need to shift gears from cash and cheque payment to digital payment.
Challenges to Digitization
The surge in the gig economy and e-commerce can largely be attributed to the expansive use of social media and internet penetration. However, there are many start-ups selling their products online through social media without officially registering. To bring such businesses under law, the government drafted the Electronic Commerce Bill in 2019 which has not yet been endorsed by the parliament. Without such law, it is not possible to bring all the online businesses under tax jurisdictions which is a loss from government revenue perspective. Another compelling challenge for e-commerce in Nepal is a lack of development of a state of the art digital map. Substandard digital map has a direct impact on service delivery and a lack of digital map can pose a major obstacle in enhancing the e-commerce sector.
Lack of digital literacy in Nepal can also limit the effective use of technology. Lack of awareness about malware, virus and hackers can expose people’s privacy and make them vulnerable to attacks. While digital infrastructure is expected to enable the growth of the economy, alarming digital divide between urban and rural population can contribute to income inequalities which is not conducive for sustainable growth.
Regular, open, and meaningful interactions with stakeholders to address the existing challenges. Implementation of the existing policies to make it easier for investing in digital infrastructure as a development priority. Learning from some initiatives of countries with similar economies such as Bangladesh.
Supporting workforce development/ skilling/ upskilling through education and training through policy reform in education and labor acts. Encourage and support Business Process Outsourcing (BPOs) and Information Technology Enabled Services (ITES) with a conducive environment such as payment channels, visa regulations, workforce development and policies to meet requirements of global business Amendment of the Telecommunication Act 2053 (1997), which is more than 2 decades old and passing of the Electronic Commerce Bill. Investment in Edge computing, sustainable strategies, data compression,
Rebooting Digital Infrastructure in Nepal
1. Regular, open, and meaningful interactions with stakeholders to address the existing challenges.
2. Implementation of the existing policies to make it easier for investing in digital infrastructure as a development priority.
3. Learning from some initiatives of countries with similar economies such as Bangladesh.
4. Supporting workforce development/ skilling/ upskilling through education and training through policy reform in education and labor acts.
5. Encourage and support Business Process Outsourcing (BPOs) and Information Technology Enabled Services (ITES) with a conducive environment such as payment channels, visa regulations, workforce development and policies to meet requirements of global business
6. Amendment of the Telecommunication Act 2053 (1997), which is more than 2 decades old and passing of the Electronic Commerce Bill.
7. Investment in Edge computing, sustainable strategies, data compression, and efficiency enhancing mechanisms.
Note: This article is from Nepal Infrastructure Summit 2022 Souvenir.