Managing What We Owe: Public Debt Governance

Thakur Prasad Adhikari, FCA

The author is Council Member of ICAN and Chairman of Public Finance and NPSAS Committee, ICAN. He can be reached at: thakur@tpadhikari.com

CA Kamal Prasad Silwal is member of ICAN. He can be reached at: kamal_slwl@yahoo.com

Abstract

Nepal's public debt stood at NPR 297,504 crore, or 45.08 per cent of gross domestic product, in mid-May 2026 (Baisakh 2083). More than half of that was external debt, and exchange-rate revaluation added NPR 16,776 crore to the recorded stock during the first 10 months of FY 2082/83. The FY 2083/84 budget raises the scale of the debt-management task: it provides for NPR 41,000 crore of domestic borrowing and NPR 24,728 crore of external borrowing, while domestic principal repayments alone amount to NPR 24,589 crore. This article reviews what those figures imply for fiscal gap, currency risk, refinancing, and the institutional role of the Public Debt Management Office (PDMO). It finds that the shift toward longer-term development bonds has improved the domestic debt portfolio, but public reporting still needs a clearer reconciliation of borrowing, repayments, exchange-rate effects, guarantees, and public-enterprise exposure. The budget's proposals for offshore Nepalese-rupee bonds, clean-energy bonds, diaspora bonds, and hedging could widen financing options; however, Nepal's existing sovereign rating is only one element of market readiness. The immediate priority is to strengthen data, risk disclosure, project selection, and inter-agency accountability before adding complex instruments to the sovereign balance sheet.

 

Keywords: Public debt management; PDMO; fiscal risk; debt service; exchange-rate revaluation; government securities; contingent liabilities; sovereign rating; thematic bonds; public sector accounting

1. Introduction

In mid-May 2026 (2083 Baisakh), Nepal's recorded public debt was NPR 297,504 crore. While that figure is important, the factors leading to it are even more insightful. The debt stock had increased by about NPR 30,099 crore since the beginning of FY 2082/83. Net disbursements through new issues accounted for roughly NPR 13,324 crore; exchange-rate revaluation of external debt accounted for NPR 16,776 crore. In essence, more than half of the increase reflected accounting changes rather than an actual inflow of cash This is the kind of distinction that a debt-management system must make visible to budget decision-makers, auditors, and the public.

 

The financing program for FY 2083/84 makes that task larger. The federal budget provides for expenditure of NPR 212,434 crore, with a financing gap of NPR 65,729 crore to be met through NPR 41,000 crore of domestic borrowing and NPR 24,728 crore of external borrowing. Although these figures are projected rather than realized, they indicate the substantial volume of transactions that the Government will need to organize, execute, record, and finance, all while safeguarding fiscal gap and maintaining credibility in the financial markets.

 

Nepal is not starting from an institutional vacuum. The Public Debt Management Office (PDMO) was established in 2075 BS; the Public Debt Management Act, 2079 and the Public Debt Management Regulation, 2080 provide a  legal basis; domestic debt operations have been transferred to the PDMO; and the Debt Operation and Management System (DOMS) supports issuance and record-keeping. The practical question is, thus, no longer whether Nepal has created a debt office. It is whether the office, together with the Ministry of Finance (MoF), Nepal Rastra Bank (NRB), the Financial Comptroller General Office (FCGO), and spending agencies, can use the available information to manage cost and risk as one portfolio.

 

This article delves into this very operational question. It brings into scrutiny a range of crucial matters, including current debt stock, the relationship between borrowing and repayment, currency and refinancing risks, fiscal exposures outside headline debt, federal coordination, and the new financing instruments announced in the FY 2083/84 budget. The purpose is not to portray Nepal's debt as either harmless or unsustainable. Instead, it is to identify the decisions that will determine whether additional borrowing supports productive public investment or merely narrows the choices available in future budgets.

2. Analysis of Current Debt Position

The PDMO's Government Debt Statistics for mid-May 2026 (2083 Baisakh) provide the latest official stock position used in this article. External debt was NPR 159,381 crore, representing 53.57 per cent of the total public debt and 24.15 per cent of the Gross Domestic Product (GDP). Domestic debt was NPR 138,123 crore, or 46.43 per cent of the total and 20.93 per cent of the GDP. The aggregate debt-to-GDP ratio was 45.08 per cent.

 

Table 1: Nepal's Public Debt Position in Mid-May 2026

Indicator	NPR crore	Share of debt	Share of GDP
Total public debt	297,504.02	100.00%	45.08%
External debt	159,381.45	53.57%	24.15%
Domestic debt	138,122.57	46.43%	20.93%

Source: PDMO, Government Debt Statistics for 2083 Baisakh (mid-May 2026).

 

A single debt-to-GDP ratio cannot describe the full risk profile. External borrowing is largely concessional and has supported investment that could not have been financed from annual revenue alone. At the same time, its value in Nepalese Rupees changes with the changes in currencies in which loans are denominated. However, it facilitates balance of payment if required. While domestic debt avoids that currency mismatch, it can create refinancing pressure and can compete for liquidity in the local financial system. The relevant policy issue is, therefore, the combination of cost, currency, maturity, and use of proceeds, not a mechanical preference for one source over the other.

 

In mid-May 2026, the domestic debt portfolio has changed substantially. Development bonds accounted for 74.71 per cent of domestic debt, while treasury bills represented 23.88 per cent. This is a more favorable maturity structure than a portfolio dominated by short-term bills. Citizen savings bonds and foreign employment savings bonds remained minimal, together accounting for just over one per cent. Their limited scale suggests that retail diversification is still more of a policy objective than a material source of financing.

Table 2: Domestic Debt by Instrument in Mid-May 2026

Instrument	Outstanding (NPR crore)	Average interest rate of debt[1]	Share
Development bonds	103,189.70	~5.8%	74.71%
Treasury bills	32,977.20	~1.6%	23.88%
Citizen savings bonds	1,391.50	6.5%	1.01%
IMF bond	515.96	SDR rate	0.37%
Foreign employment savings bonds	48.21	7.5%	0.03%
Total	138,122.57	~4.5%	100.00%

Source: PDMO, Government Debt Statistics for 2083 Baisakh (mid-May 2026), Table 2.

 

The interest rate data reveal a notable divergence in the cost of domestic debt across instruments. Development bonds, which account for nearly three-quarters of domestic debt, carry a weighted average cost of approximately 5.8 per cent per annum — a rate that reflects the bond coupon structure established when market interest rates were higher. Treasury bills, at approximately 1.6 per cent annualized discount (consistent with the NRB’s reported 91-day treasury bill rate of 2.94 per cent as at Jestha 2082), are the cheapest domestic instrument by far. Citizen savings bonds carry a coupon of 6.5 per cent and foreign employment savings bonds 7.5 per cent — the rates are applicable to the series opened in Kartik 2082 as disclosed in the PDMO Public Debt Bulletin, Year 5 Volume 1. These rates are competitive against bank deposit rates and are designed to attract retail investors, though the outstanding stock of both instruments remains small relative to the total domestic portfolio. The overall weighted average interest cost of the domestic debt portfolio of approximately 4.5 per cent per annum is lower than the long-term development bond coupon because of the significant volume of low-cost treasury bill rollovers. However, this masks a structural cost-risk trade-off: the cheapness of treasury bill financing comes at the price of high rollover frequency and refinancing risk, while the certainty of development bond financing comes at a higher fixed coupon. The MTDS’s strategy of extending portfolio duration toward development bonds will tend to raise the weighted average cost in the short term but will reduce refinancing risk over time. This trade-off should be made explicit in the PDMO’s public reporting.

 

The stock reconciliation also demands routine public attention. The opening debt balance of NPR 267,405 crore, plus disbursements and new issues of NPR 36,516 crore, less repayments of NPR 23,193 crore, and plus the exchange-rate adjustment of NPR 16,776 crore, reconcile to the mid-May closing balance. Publishing this bridge in a simple and consistent format would help users distinguish policy-driven borrowing from valuation changes.

3. Borrowing, Repayment, and Fiscal Gap

The Annual Borrowing Plan for FY 2082/83 envisaged gross borrowing of NPR 59,566 crore: NPR 36,200 crore from domestic sources and NPR 23,366 crore from external sources. It also budgeted debt service of NPR 41,101 crore, comprising NPR 30,248 crore of principal and NPR 10,853 crore of interest and related charges. The ratio of planned debt service to planned gross borrowing was, therefore, about 69 per cent.

 

That comparison should not be read as though sixty-nine rupees out of every hundred borrowed are literally unavailable for expenditure. Gross borrowing includes refinancing and debt service includes repayment of maturing obligations, so the flows overlap. The ratio is nevertheless useful because it shows the scale of annual debt operations relative to new financing. A government that must repeatedly issue large amounts simply to meet maturities has less room to adjust the timing and composition of borrowing when market conditions change.

 

The FY 2083/84 budget presents the same issue in a different form. Gross domestic borrowing is estimated at NPR 41,000 crore, but domestic principal repayment is NPR 24,589 crore. Net new domestic borrowing is therefore NPR 16,411 crore. The difference is not an accounting technicality; it is the amount by which domestic debt is expected to finance the budget after maturing principal has been paid. Public discussion often focuses on the gross issuance number, although the net figure is more informative when assessing the additional resources obtained from the domestic market.

 

Table 3: Selected FY 2083/84 Budget and Financing Figures

Item	NPR crore	Basis
Total expenditure	212,434	Budget estimate
Recurrent expenditure	127,058	59.8% of total
Capital expenditure	43,110	20.3% of total
Financial management	42,264	19.9% of total
Domestic revenue	140,531	Budget estimate
Foreign grants	6,174	Budget estimate
Financing gap	65,729	Budget estimate
Gross domestic borrowing	41,000	Budget estimate
Domestic principal repayment	24,589	Budget appropriation
Net new domestic borrowing	16,411	Calculated: gross less principal
External borrowing	24,728	Budget estimate

Source: Ministry of Finance, Budget Speech and budget schedules for FY 2083/84. Figures are proposals, not actual results.

 

The financing allocation of budget is NPR 42,264 crore. Budget annexes indicate that principal and interest/service-charge appropriations account for nearly all of that amount, although the financing  category is broader than debt service and should not be treated as an exact synonym. The distinction matters because principal repayment is a financing transaction, interest is an expense, and government on-lending or equity transactions have different economic and accounting implications.

 

Capital expenditure is budgeted at NPR 43,110 crore, which is 20.3 per cent of the total expenditure. It is easy to defend borrowing when it finances projects that are well selected, completed on time, and capable of raising future productivity or public-service quality. Nepal has consistently faced challenges in translating capital budget allocations into completed infrastructure and productive assets. Debt sustainability is, therefore, linked not only to how much the Government borrows, but also to procurement readiness, land acquisition, contract management, cash planning, and the maintenance of assets after construction.

 

The budget for FY 2082/83 is 25.2 per cent above the revised estimate. If revenue or project implementation falls short, the response may be expenditure compression, changes in the issuance calendar, or additional financing pressure. For the PDMO, credible borrowing plans depend on timely cash forecasts from the budget and treasury systems. A borrowing calendar cannot remain stable if spending agencies and revenue authorities do not provide information in time or provide unreliable information.

4. Currency and Refinancing Risk

The exchange-rate adjustment of NPR 16,776 crore recorded by mid-May 2026 is the clearest current measure of currency exposure. A revaluation resulting from currency devaluation does not represent new borrowing. It is merely a change in the Nepalese rupee value of outstanding external debt. Describing it correctly is important: revaluation affects the reported debt stock and future repayment burden, even though it does not require an immediate budget outflow on the valuation date. It also supports policymakers to assess the impact of currency movements on public debt.

 

Nepalese rupee is maintained at NPR 1.60 per Indian rupee. Since the Indian rupee moves against the US dollar, Special Drawing Rights, the Japanese yen, and other currencies in which Nepal borrows, the Nepalese-rupee value of external debt can rise even when no new loan is signed. A concessional coupon, therefore, does not, by itself, represent the full fiscal cost in domestic-currency terms.

 

The appropriate response is not to reject concessional external finance. For many long-gestation infrastructure and social-sector investments, it remains the least costly financing source available. The response should be better disclosure and comprehensive portfolio analysis. Quarterly debt reports should show the currency composition of external debt, the exchange-rate bridge from opening to closing stock, and the estimated effect of reasonable depreciation scenarios. Such information would allow Parliament and the public to see how much of a change in debt arises from borrowing decisions.

 

Domestic refinancing risk has eased as development bonds have replaced part of the treasury-bill stock. The current composition is evidence of progress, not proof that rollover risk has disappeared. Almost one-quarter of domestic debt remains in treasury bills, and even longer-term bonds create redemption clusters if maturity dates are not spread carefully. The Annual Borrowing Plan and issuance calendar should, therefore, be linked to a rolling redemption profile, projected cash balances, and indicators such as average time to maturity and the share of debt falling due within one year.

 

The local market also affects cost. Government securities are held mainly by banks and other regulated institutions. When the investor base is narrow, a large issuance can change liquidity conditions and pricing quickly. A deeper secondary market, reliable benchmark maturities, and broader participation by pension funds, insurers, collective investment schemes, and retail investors would give the Government many and varied choices. However, the PDMO alone is unable to deliver these reforms, requiring strategic coordination with the NRB and the Securities Board.

5. Institutional Position of the PDMO

The PDMO was founded in 2075 BS to ensure greater coherence to functions that had earlier been distributed across government bodies. The Public Debt Management Act, 2079 entrusts the debt office the responsibilities for preparing debt strategy, annual borrowing plans, domestic issuance, debt recording, servicing, and government share and loan investments. Domestic debt operations were formally transferred from the NRB to the PDMO from 2080 Chaitra 1, and DOMS operated by PDMO supports those operations since then. It would, therefore, be inaccurate to associate domestic borrowing exclusively with the central bank.

 

While institutional integration is still a work in progress, there are other more specific issues as well. The NRB continues to provide essential market, payment, banking, and monetary-policy infrastructure. External financing negotiations and development-partner coordination lie primarily within the MoF. The FCGO controls government accounting and cash management. The PDMO’s portfolio optimization completely depends on whether information from these institutions is timely, reconciled, and used in a shared decision process.

 

The 2022 PEFA assessment, published in 2024, assigned a C rating to PI-13 on debt management. The report recognised that debt records and legal approval arrangements exist, but noted limitations in the debt strategy in the period assessed and in access to complete information on guarantees and wider fiscal risks. The result is useful because it distinguishes formal arrangements from the quality and coverage of their operation.

 

Nepal also has a sovereign credit rating. Fitch assigned the country a BB- rating with a Stable Outlook in 2024 and affirmed it in November 2025. This corrects the frequent assertion that Nepal has no sovereign credit rating. The rating is an institutional asset, but it should not be mistaken for automatic access to affordable international bond markets. Investors will also examine fiscal data, debt statistics, legal documentation, settlement arrangements, foreign-exchange rules, policy credibility, and the quality of communication with the market.

 

The next institutional step is not necessarily to move every related function into one office-PDMO. It is to define who decides, who executes, who records, who reconciles, and who reports each transaction. A written operating protocol among the (MoF), PDMO, NRB, and FCGO would reduce dependence on informal coordination and make accountability easier to audit.

6. Fiscal Risks Beyond Headline Public Debt

Headline debt figures do not fully reflect all potential obligation that may ultimately fall on the government budget. Commitment arising from Government guarantees, public-private partnership (PPP) commitments arrangement, payment arrears, legal disputes, and the financial liabilities of public enterprises may generate significant future fiscal cost. The Procedure on Accounting and Reporting of Contingent Liabilities of Public Institutions, 2082 is, therefore, an important milestone. It provides framework for systematically identifying and reporting exposures that previously appeared inconsistently or not reported at all.

 

The current public record reviewed for this article does not provide a sufficiently clear, independently verified basis for presenting NPR 2.1 trillion as a consolidated contingent-liability estimate. That figure appeared in earlier drafts, but its definition, coverage, and probability basis could not be established from the available primary documents. A potential exposure, a guaranteed loan balance, an expected loss, and an entity's total liabilities are not interchangeable. Using one number without explaining  can mislead readers about the Government's actual risk. Although the Auditor General's form was approved for recording guaranteed loan balances, a comprehensive mechanism for recording all categories of contingent liabilities is still lacking.

 

The same discipline is required for government share and loan investments. Equity, subsidiary loans, accrued interest, principal recoveries, dividends, and impairment are different categories. Principal recovered on a government loan is a return of an asset, not investment income. A portfolio report should, therefore, separate the opening balance, new investment, repayments, interest received, dividends, arrears, impairment indicators, and closing balance by entity. PDMO should consider to provide such disaggregated data.

 

The PDMO should use verified public-enterprise information in debt-sustainability and borrowing analysis, while the MoF retains responsibility for the broader fiscal-risk statement. The Office of the Auditor General can test whether the reported data reconcile to audited financial statements of public enterprises and legal agreements. Without this division of work, a new procedure may improve compliance on paper while leaving the quality of the underlying information unchanged.

7. Federal Fiscal Coordination: Defining the Risk Before Measuring It

Federalism adds complexity to fiscal monitoring, but this does not imply that every provincial or local expenditure generates a federal contingent liability. Intergovernmental transfers are budgeted expenditures. They become a debt-management concern only when they are linked to borrowing, guarantees, arrears, public entities, PPP clauses, or future commitments that may legally or practically shift to another level of government.

 

The first task is, therefore, defining fiscal risk. Provincial and local governments are required to get consent from Government of Nepal while accepting external and internal debt. They should report PDMO about direct debt, guarantees, overdue obligations, PPP payment commitments, and the liabilities of material public entities in a common format. Project cost overruns and maintenance needs should be monitored through the budget and project systems; they should not automatically be labelled contingent liabilities. This separation would avert both understatement and exaggeration of subnational fiscal risk.

 

The National Natural Resources and Fiscal Commission advises on borrowing limits and intergovernmental fiscal transfer. The MoF and FCGO retains the core fiscal and accounting data. Provincial finance ministries and local governments are responsible for the completeness of their respective financial reports. Considering this, the practical role of the PDMO should involve specification of the debt and guarantee of information needed for national risk analysis and incorporation of verified exposures into the medium-term debt strategy.

 

A workable system does not require the PDMO to supervise every local project. What it would rather need are: a minimum dataset, clear reporting dates, reconciliation to financial statements, and escalation rules when an exposure exceeds a defined threshold. Beginning with large provincial entities, guaranteed projects, and major PPPs would be more realistic than attempting to collect detailed information from every local body at once.

 

This approach would strengthen accountability by ensuring that, when a contingent obligation materializes and imposes a burden on the federal budget, stakeholders can trace its origin, identify the approving authority, review the terms and conditions of the commitment, and understand the factors that led to its realization. Such a transparent audit trail provides greater value than a single aggregated estimate that cannot be linked to the underlying agreements.

8. New Financing Instruments: Opportunity Requires Sequencing

The FY 2083/84 budget proposes offshore Nepalese-rupee bonds, clean-energy bonds, diaspora bonds, a hedging service for foreign-funded projects, a sovereign wealth fund, and a Motherland Fund. These proposals respond to real financing constraints facing the country. They also introduce legal, market, accounting, and risk-management questions that are different from those associated with conventional concessional loans and domestic government securities.

 

An offshore NPR bond would place the exchange-rate risk on investors rather than on the Government, but investors would price that risk into the yield. Nepal's BB- sovereign rating provides a reference point and a basis for investor discussion. It does not remove the need for an issuance law or authorization, documentation under an accepted governing law, tax and convertibility clarity, settlement arrangements, disclosure standards, and an investor-relations function capable of responding to the market after issuance. A small and carefully prepared transaction would be preferable to an early issue whose pricing or reporting damages future access.

 

A clean-energy or green bond requires more than a label. The Government would need an eligible-project framework, a credible pipeline, procedures to track proceeds, arrangements for unused balances, and periodic allocation and impact reports. Independent external review before issuance and assurance after issuance would strengthen confidence. The most difficult part may be project readiness: proceeds cannot be credibly ring-fenced for projects that lack completed designs, safeguards, procurement plans, and measurable outputs.

 

Diaspora bonds face a different set of practical questions. Subscription channels must be easy to use from abroad; know-your-customer requirements, taxation, currency conversion, repatriation, and transferability must be clear; and the return must be competitive with the alternatives available to overseas Nepalese. The limited outstanding stock of foreign employment savings bonds suggests that patriotic appeal by itself will not create a large or stable investor base.

 

The proposed hedging service could address a genuine mismatch between foreign-currency debt and Nepalese-rupee project revenue. Its design must show who bears extreme losses, how the premium is calculated, whether the public sector is taking risk that private parties would otherwise bear, and how exposures are capped and reported. A poorly-priced public hedge does not eliminate currency risk; it transfers the risk to the Government.

 

A sovereign wealth fund also requires a clear purpose. A reserve investment vehicle, a development fund, and a fiscal stabilization fund have different objectives and governance rules. Before assets are transferred, legislation should define the mandate, funding source, withdrawal rule, benchmark, risk limits, reporting, and independent audit. The budget announcements are a useful policy signal, but each instrument should proceed only after its accounting and risk architecture is in place.

9. Priorities for the Next Phase

The next phase of debt-management reform should be organized around a small number of operational changes rather than another broad list of aspirations.

 

First, the PDMO should publish a quarterly debt bridge and risk dashboard. The bridge should reconcile opening stock, gross disbursement and issuance, principal repayment, exchange-rate revaluation, and closing stock. The dashboard should show currency shares, average time to maturity, debt due within one year, weighted average interest cost, and the concentration of redemptions. This can be built from information already used for the monthly bulletin and Annual Borrowing Plan.

 

Second, the MoF should establish a verified fiscal-risk baseline. Public institutions should report guarantees, loans, arrears, PPP obligations, and material legal claims under defined categories. Reports should reconcile to audited financial statements. The initial published baseline may not capture all relevant exposures; therefore, transparently disclosing its scope and limitations would be more appropriate than presenting a large aggregate figure without a clearly defined methodology. Third, borrowing and cash planning should be linked through a formal inter-agency protocol. The MoF, PDMO, NRB, and FCGO should agree data cut-off dates, approval responsibilities, settlement and reconciliation procedures, and a process for revising the issuance calendar when revenue or spending departs from plan. This is particularly important in a year with a larger budget and substantial maturities.

 

Fourth, the new financing instruments should be sequenced. Nepal should use its existing sovereign rating to begin structured investor engagement, while completing the legal, disclosure, project-selection, and reporting requirements for offshore and thematic bonds. The hedging proposal should begin with a limited pilot work whose risk limits and public cost are transparent. Diaspora issuance should be tested against actual investor demand and operational convenience.

 

Fifth, market development and professional capacity should advance simultaneously. Secondary-market arrangements, benchmark maturities, and investor diversification matter, but so do the human resources—accountants, economists, lawyers, IT specialists, and market professionals—who will manage them. The accountancy profession can make a direct contribution in consistent classification under applicable public-sector accounting standards, reconciliation between entity records and government accounts, audit of guarantees and loan balances, and disclosure of significant assumptions would make fiscal-risk reporting more credible. The objective is not to place every possible exposure in public debt. It is to give decision-makers a reliable picture of which obligations are explicit, which are contingent, and which may become politically unavoidable even without a legal guarantee. ICAN and public institutions can also support training in the crucial areas of debt accounting, valuation, fiscal-risk disclosure, use-of-proceeds assurance, and audit of complex financing transactions.

Table 4: Practical Reform Sequence

Priority	Required action	Lead institutions	Timing
Debt bridge and risk dashboard	Reconcile flows and publish currency/maturity indicators	PDMO	Immediate
Verified fiscal-risk baseline	Define, reconcile, and disclose guarantees and other exposures	MoF, PDMO, OAG	Immediate
Borrowing-cash protocol	Set data dates, approvals, settlement, and revision procedures	MoF, PDMO, NRB, FCGO	Within FY 2083/84
New instrument readiness	Complete legal, disclosure, project, and investor arrangements before issue	MoF, PDMO, NRB	Phased
Domestic market development	Improve benchmarks, secondary liquidity, and investor diversity,	PDMO, NRB, SEBON	Medium term
Professional involvement and capacity development	Build debt accounting, valuation, risk, and assurance skills	Public institutions, ICAN	Continuous

Abbreviations: MoF = Ministry of Finance; OAG = Office of the Auditor General; NRB = Nepal Rastra Bank; FCGO = Financial Comptroller General Office; SEBON = Securities Board of Nepal.

10. Conclusion

Although Nepal's public debt is currently within manageable limits, the government's tolerance for weak execution and policy slippages is becoming increasingly constrained. The mid-May figures reflect the underlying reasons. The debt stock rose not only because the Government borrowed, but also because exchange rates changed. The new budget will require large gross financing and that substantial principal must be repaid at the same time. These facts do not make further borrowing inappropriate; they make the quality of borrowing decisions more important.

 

The PDMO has moved beyond its formative stage. It is statutorily mandated to control domestic debt operations and annual borrowing process, along with regular reporting, and a robust operating system in place. The immediate institutional decision is whether Nepal will use these foundations to produce a genuinely integrated view of debt, cash, guarantees, public-enterprise exposure, and project financing. That requires disciplined cooperation across institutions, not simply a wider mandate on paper.

 

The FY 2083/84 budget opens a new financing agenda. Offshore NPR bonds, clean-energy bonds, diaspora instruments, and hedging may eventually reduce concentration and support investment. Nepal already has a sovereign rating, but market access will depend on the credibility of its data, legal arrangements, project pipeline, and continuing disclosure. Preparation should, therefore, be treated as part of the financing transaction, not as work to be completed after an instrument is announced.

 

The accountancy profession can make significant practical contributions: distinguish expense from financing, reconcile debt records, verify guarantees and subsidiary loans, test the use of bond proceeds, and ensure that public-enterprise exposures are reported on a consistent basis. Better debt governance will not be achieved by a single ratio or a new instrument. It will be possible when the numbers used to make borrowing decisions are complete, comparable, and capable of audit.

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