Nepal Drops in International Rankings on Central Budget Transparency

Press Release Nepal, 6 May 2020—Amid a global pandemic that is forcing governments around the world to launch new spending measures, the International Budget Partnership’s (IBP) latest Open Budget Survey-2019 shows why there is a reason for concern: four out of five of the 117 governments assessed failed to reach the minimum threshold for adequate budget transparency and oversight, under international standards, including Nepal. Worldwide, one-third of the eight key budget documents that governments should publish are not available to the public. Nepal has decreased the availability of budget information by failing to publish key budget documents, mainly pre-budget statement (PBS) and Citizen Budget; In-Year Reports (Quarterly Economic Bulletins) online within three months of the end of the reporting period, part of the Year-End Report (Annual Progress Assessment Report-2017-18), that would clearly explain budget policies, decisions and outcomes, according to the 2019 Open Budget Survey Nepal summary report. “While the pandemic clearly demands swift and decisive action, budget transparency, civic engagement and well-functioning oversight are imperative as well,” says Warren Krafchik, IBP’s executive director. “As governments respond to this massive public health emergency, budgets must remain open and transparent, and officials must allow inclusive public engagement during planning and implementation.” As research by IBP and other organizations demonstrates, open budgets offer a promising pathway for countries to thrive socially and economically. They can restore trust in governments and strengthen frayed relationships between public institutions and the people they are meant to serve. While the latest OBS was completed just before the pandemic hit, it provides a telling snapshot of current Nepal's practices related to budget disclosure, opportunities for public engagement in the budget cycle, and effective checks and balances. While many governments are not meeting minimum international standards, there is good news indicating others are reaping the benefits of adopting more transparent, inclusive and participatory approaches to budget planning and implementation. Nepal can look to these examples as a way forward. The Measures of Open Budgets: Budget transparency is assessed in the OBS by the public availability and contents of eight key budget documents that all governments are expected to publish as per international standards. Specifically, the survey examines whether they are published online in a timely manner and the information is comprehensive.

• The global average transparency score was 45 out of 100, short of the 61 considered the minimum threshold to foster an informed public debate.
• Nepal scored 41 on budget transparency

Public participation is assessed based on formal opportunities for civic organizations and individuals to engage and provide input throughout the budget process.

• The average global score for public participation is dismal: 14 out of 100.
• Nepal scored 22 on public participation in budgetary process

Oversights measured based on the role played by legislatures and supreme audit institutions (SAIs) in the budget process.

• A score of 61 out of 100 is considered adequate oversight.
• Nepal scored 48 on budget oversight

Nepal government could quickly improve the situation by –

• Publishing the In-Year Reports (Quarterly Economic Bulletins) online in a timely manner.
• Timely Producing and publishing a Pre-Budget Statement and Citizens Budget online
• Including in Executive's Budget Proposal detailed info on composition of government debt and information on how its policies impact proposed revenues and expenditures.
• Publish information in the Year-End Report with performance information and the comparison of estimates and actual outcomes of non-financial data on results.
• Publish detailed expenditure and revenue information as part of the Enacted Budget.
• In the Mid-Year Review, present updated expenditure projections for the remainder of the fiscal year as compared to the original budget.
• Actively engage with vulnerable and underrepresented communities, directly or through civil society organizations representing them.
• Establish formal mechanisms for the public to contribute to relevant audit investigations.

Nepal's Federal Parliament provides weak oversight during the planning stage of the budget cycle and weak oversight during the implementation stage. To improve oversight, the following actions should be prioritized. The Executive’s Budget Proposal should be submitted to legislators at least two months before the start of the budget year. Legislative committees should examine the executive’s Budget Proposal and publish reports with their analysis online. A legislative committee should examine in-year budget implementation and publish reports with their findings online. IBP first launched the survey in 2006 with the goal of assuring that all citizens, especially those from underserved communities, have the opportunity to understand and influence how public money is raised and spent. Data are collected by independent civil-society budget experts who are not beholden to any national government. Their findings are reviewed by anonymous peers, and representatives from the assessed governments are offered the opportunity to review and comment on the findings. Please visit https://www.internationalbudget.org/open-budget-survey/country-results/2019/nepal?fbclid=IwAR3CFNzSxcH8P0hEEdcDvtkbzcSmCQr6fiwEooNFJLBYSIEmd2zCvv5AvmQ For details, Freedom Forum Central Office, Thapathali 6 May 2020