Forum Workshop in Nepal on Intergovernmental Fiscal Relations: The Role of the Independent Finance Commission

Mr. Ghalieb Dawood from South Africa
Mr. Ghalieb Dawood from South Africa

On June 28 and 29, 2018, the Forum of Federations, in collaboration with National Natural Resources and Fiscal Commission, Nepal (NNRFC), with funding provided by Governance Facility, held a two-day workshop on the role of independent finance commission in intergovernmental fiscal relations in Kathmandu, Nepal.

The event brought together key officials from the NNRFC and various other government departments to learn and share cross country experiences in fiscal federalism. Expertise was drawn from South Africa, India and other comparative models.

The discussions focused on the role of independent financial commissions in advising the management of fiscal federalism particularly in relation fiscal transfers, equalisation, revenue sharing and natural resources distribution.

The workshop was opened with the welcome remarks of Dr. Baikuntha Aryal, Secretary of National Natural Resources and Fiscal Commission. He outlined the work of the NNRFC and the aspirations of the constitutional body, established with the objective of ensuring the just and equitable distribution of natural and fiscal resources among federal, state and local governments.
The event was structured to provide an opportunity for informal exchange of approaches, learning from one another.

On the first day, the first session was presented by Prof. Nico Steytler, an international expert from South Africa and Finance and Fiscal Commissioner, on the key roles of the financial commissions and lessons for Nepal, the second session was presented by experts from South Africa Finance and Fiscal Commission, its Chairperson Prof. Daniel Plaatjies and Dr. Ghalieb Dawood presented on borrowing by national and sub national government as well as on South Africa’s Finance and Fiscal Commission.

In the third session, Prof. Pinaki Chakraborty from India’s National Institute of Finance and Public Policy and an economic adviser to India’s Fourteenth Finance Commission shared experience on India’s approach to fiscal management and the role of its independent advisory body plays in India’s federation.

The following day, Prof. Nico Steytler presented on key functions in vertical and horizontal division of revenues and conditional and unconditional grants.
Prof. Pinaki then presented on budget formation and intergovernmental relations with stakeholders.

The final session was conducted by the NNRFC who shared their key achievements thus far in advising the federal government as it tabled its first ever federal budget; its data collection, consultation, coordination and other efforts in providing the Government of Nepal with the advice necessary to coordinate and finance services across its federation.

This was followed by a panel discussion and Q & A session on the challenges that stand ahead for the NNRFC, with input provided by those national and international experts present.
Great linkages were forged between the various institutions and department present both national and international, it was a very robust, informative and successful exchange, the first of its kind in Nepal.