Overview of Australia’s aid program to Nepal

How we are helping

2015-16 Total Australian ODA Estimated Outcome
$33.7 million

2016-17 Bilateral Budget Estimate
$15.6 million

2016-17 Total Australian ODA Estimate
$34.0 million

The Australian Government will provide an estimated $34.0 million in total Official Development (ODA) to Nepal in 2016-17. This will include an estimated $15.6 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.

While 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 2015, Nepal ranked 145 out of 187 countries on the UN Human Development Index. Approximately 25 per cent of people live under the national poverty line and 23 per cent earn less than US$1.25 per day. Further, the World Bank estimates that the devastating earthquakes in April and May 2015 may have pushed an additional 2.5 to 3.5 per cent of the country’s population into poverty, translating into 700,000 additional poor and demonstrating the vulnerability of Nepali households to shocks. Nepal continues to struggle with disparities and inequalities between regions and social groups with discriminatory practices based on gender, caste and ethnicity that trap people in poverty.

Australia is committed to providing support for Nepal following the earthquakes in April and May 2015. 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) is providing critical assistance to help people rebuild their lives. Support for recovery efforts builds on the existing aid program and is 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. Complementing these key objectives is an emphasis on strengthening resilience and making the most of opportunities afforded by the earthquakes, including by ‘building back better’. 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 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 two key objectives and responding to the earthquakes as outlined in the 2015 -16 Aid Investment Plan

Objective 1: Promote human development through improved access to, and quality of, basic education

Education is critical to enable the poor to participate in the economy and to lifting living standards. Nepal has made good progress in net enrolment rates and gender parity in primary education; however these gains are fragile. There remains considerable need for work to improve the quality of education as well as the involvement of children with disabilities and others experiencing disadvantage.

Australia has supported the School Sector Reform Program in Nepal since 2007, helping the Government to provide free and higher quality education for 6 million boys and girls. We are focused on advocating for ongoing improvements in the quality of education, access for marginalised groups, school safety and strengthened institutional capacity and financial management.

Australia is also implementing a targeted package of support following the earthquakes to help vulnerable children transition back into school and to ‘build back better’ school infrastructure. Australia’s investment is helping children, especially those at greater risk of child labour, abuse, exploitation and being left behind, to go back to better and safer schools.

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

Objective 2: Expand economic opportunities for the poor by promoting enterprise and job-creation

Nepal’s economy has limited employment opportunities and a large unskilled workforce. Employment within Nepal is largely informal and overwhelmingly male dominated, with only 6 per cent of women engaged in formal employment. Supporting domestic job creation, especially for women, is central to ensuring long term and inclusive economic growth.

Micro-enterprise development has been a key initiative of Australia’s aid program to Nepal since 1998. The program trains the poor and the ultra-poor to become entrepreneurs and assists them in establishing and developing their own businesses. The program also provides business development services and access to markets, finance and technologies. In the worst earthquake-affected districts of Nepal, up to 90 per cent of livelihoods, markets and enterprises were destroyed or damaged. Australia is providing targeted support to affected entrepreneurs, to get individuals back on their feet, revive businesses and restore local markets.

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

Investments supporting both objectives

Our results

Promote human development through improved access to, and quality of basic education

  • The School Sector Reform Program has delivered positive results including increasing enrolment in basic education from 73 per cent (2009) to 86.3 per cent (2014) and achieved gender parity in basic education enrolment.
  • In 2013-14, Australia’s funding ($4 million) directly supported an additional enrolment of approximately 50,000 students (25,269 girls) and delivered more than 300,000 textbooks.

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

  • In 2014-15, the Micro Enterprise Development Program enabled 27,464 beneficiaries to increase their income, 62 per cent of whom were poor women.
  • Since 1998, the program has created more than 70,800 micro-entrepreneurs and through the micro-enterprises created more than 86,000 jobs.

Humanitarian support to the 2015 earthquakes

Australia’s $11.9 million humanitarian response package (delivered in 2014-15) focused on providing lifesaving support through UN Agency Appeals, Australian Red Cross and NGO partners operating on the ground by:

  • supplying emergency shelter and family kits; maternal and child health services; water, sanitation and hygiene promotion; protection support including child and female friendly spaces providing psycho-social and educational services; logistics for emergency food distribution and medical supplies
  • 15 tonnes of humanitarian relief supplies for up to 5,000 people including water purification and hygiene kits, tarpaulins and family kits and blankets; and
  • 31 deployments including consular, medical, logistics and humanitarian specialists.

Earthquake Early Recovery Package

Australia’s $16.7 million early recovery package (delivered in 2014-15) focused on providing lifesaving support through UN Agency Appeals, Australian Red Cross and through NGO partners operating on the ground by:

  • supporting the UNDP’s Rapid Enterprise and Livelihoods Recovery Project to stimulate local economic recovery
  • working with Plan International to provide more than 17,000 children, particularly marginalised girls and children with disabilities, with access to education and psycho-social support in safe temporary learning spaces to help them transition back into school
  • supporting the Global Facility for Disaster Risk Reduction and Recovery to conduct damage and structural integrity assessments of public and private education infrastructure and provide technical advice on rebuilding and retrofitting affected schools
  • deploying Australian Civilian Corps infrastructure specialists to Nepal’s Department of Education to assist assessments and reconstruction planning, and
  • funding The Asia Foundation’s project to assist in resolving community disputes related to resettlement, land and resource use, unequal allocation of relief and recovery resources and increased vulnerability of marginalised groups especially in regards to gender-based violence.

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 education and economic opportunity builds on long standing programs and Government of Nepal development priorities. In order to increase efficiency we have narrowed our sectoral focus, resulting in a more targeted program. Thorough deliberations led to a decision for Australia to exit the health sector. Australia’s financial contribution to the health sector was small compared to other donors who were considered better placed to progress reforms in partnership with the Government of Nepal. We continue to provide support through global programs for NGO activities, volunteers and DFAT’s Direct Aid Program (DAP).

In recognition of the devastation caused by the earthquakes, funding levels have remained stable for the Nepal program with support for early recovery that complements our existing investments in education and economic opportunity. However, bilateral funding for Australia Awards will centre on short courses between 2015 and 2017.

The current Aid Investment Plan (AIP) covers 2015-16. A longer term Aid Investment Plan will be developed in 2016-17 for future years.

Last Updated: 3 May 2016
Tul Bahadur BK runs a furniture making business that has received electric tools as part of the MEDEP support (credit: DFAT).
Mother Nishal Thapa brings her child to a health clinic in Pokhara, Nepal (credit: DFAT).
A student at a primary school in Pokhara, Nepal (credit: DFAT).