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Development assistance in Nepal

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Overview of Australia’s aid program to Nepal

Overview of Australia's aid program to Nepal

How we are helping

2018-19 Total Australian ODA Estimated Outcome
$29.3 million

2019-20 Bilateral Budget Estimate
$9.1 million

2019-20 Total Australian ODA Estimate
$22.5 million

The Australian Government will provide an estimated $22.5 million in total Official Development (ODA) to Nepal in 2019-20. This will include an estimated $9.1 million in bilateral funding managed by DFAT.

Australia's relations with Nepal continue to strengthen through development cooperation and people-to-people links. Australia has a long history of supporting Nepal's human and economic development, including through micro-enterprise programs to lift people, especially women, out of poverty.

Nepal is now recovering from the devastating effects of the earthquakes in 2015 but it continues to face significant challenges. Although Nepal has made progress in reducing poverty rates over the past twenty years, the country remains the poorest in South Asia and among the poorest in the world. In 2016, Nepal ranked 144 out of 187 countries on the United Nations Human Development Index.

Australia's contribution of $16.7 million between 2015 and 2017 for Nepal's long-term recovery (in addition to $11.9 million provided in 2014-15 for the humanitarian response) provided critical assistance to help people rebuild their lives following the April 2015 earthquake and subsequent aftershock in May 2015. The support for recovery efforts built on the existing aid program and was consistent with the priorities identified by the Government of Nepal.

Australia's aid program focuses in areas where our experience and expertise can make a difference to the lives of the poorest, particularly women and girls, marginalised communities and people with disabilities. Underscoring all investments is support for improved governance and public financial management along with gender equality. The bilateral program is complemented by investments through the South Asia regional program in trade, water, energy and connectivity as well as support through global programs for NGO activities and volunteers.

Our program is focused on the three long term objectives, as well as responding to the earthquakes, as outlined in the 2016-2020 Nepal Aid Investment Plan.

Objective 1: Expand economic opportunities for the poor, particularly women, by promoting enterprise and job-creation in Nepal

The overall aim of this objective is to boost employment opportunities and income generation. Despite declining fertility rates, Nepal is in the midst of a youth bulge which offers a potential demographic dividend, but also highlights the need to boost employment opportunities.

Australia has supported enterprise and job-creation in Nepal through the UNDP-led micro-enterprise development program (MEDEP). Australia will continue with its current phase of funding through to 2018-19 and will then review its options on how to best engage in this sector. Further analysis will also be undertaken to determine constraints to accessing financial services and other enterprise support for the poor.

Investments for expanding economic opportunities for the poor, particularly women, by promoting enterprise and job-creation

Objective 2: Support Nepal to improve governance and policy implementation

Nepal is undergoing a historic transition to a three tier federal system of government. These new governance arrangements are widely expected to deliver a period of increased political stability and prosperity for the Nepalese people. Effective and stable governance that delivers services effectively and equitably across the country continues to be a challenge for Nepal. In 2017 we commenced a new program of support to promote an enabling environment for strong, effective, and inclusive sub-national governance. We will help sub-national levels of government to improve service delivery and economic governance, which will contribute to inclusive local economic development and poverty reduction, and encourage strengthened disaster risk governance policies, systems and processes.

Targeted and flexible technical assistance will also be used to meet identified gaps, especially in responding to demand at the sub-national level.

Investments for promoting human development through education support in Nepal

Objective 3: Promote human development through improved access to and quality of basic education in Nepal

Support for promoting human development will include Australia Award long and short-term scholarships. In 2018-19 as part of this commitment, 20 delegates will complete short-term study on decentralisation of government decision-making and the devolution of responsibility to provincial and local-level government.

Investments in promoting human development through improved access to, and quality of, basic education

Our results

Promote human development through education support

  • The School Sector Reform Program has increased enrolment in basic education from 73 per cent (2009) to 91 per cent (2016) and achieved gender parity at primary, basic and secondary levels.
  • The program has also seen an increase in the literacy rate for children 6 years and above from 69 per cent in 2008 to 78 per cent in 2016.

Expand economic opportunities for the poor by promoting enterprise and job creation

  • Since 1998, the Micro Enterprise Development Program has created more than 87,900 micro-entrepreneurs, with 71 per cent being women.
  • The micro enterprise program has created more than 195,000 jobs (71 per cent of which are for women).

Support for the 2015 earthquakes

Australia's humanitarian response package to the 2015 earthquakes ($11.9m, 2014-16) focused on providing lifesaving support through UN agency appeals, Australian Red Cross and NGO partners, and included 15 tonnes of humanitarian relief supplies. Australia's subsequent early recovery package ($16.7m, 2015-17) included support for the UNDP to stimulate local economic recovery and deployment of Australian Civilian Corps infrastructure specialists.

Our changing program

Australia's changing aid program in Nepal reflects our areas of experience and expertise and focuses on activities through which we can make a real difference to those living in poverty. Focusing on governance, education and economic opportunity builds on long standing programs and Government of Nepal development priorities.

We continue to provide support through global programs for NGO activities, volunteers and DFAT's Direct Aid Program (DAP).

Last Updated: 2 April 2019
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