Hikmat Bahadur Thapa serves as an advisor to the Non-Resident Nepali Association-International Coordination Council (NRNA-ICC). Involved in the NRNA movement since its inception, he was instrumental in connecting NRNs in Africa to the broader Nepali Diaspora Network, having previously served as the treasurer of NRNA-ICC. Originally from the Kailali district of Sudurpashchim, Nepal, he was the primary figure responsible for convincing Africa’s Dangote Group to invest in cement manufacturing within Nepal.
Thapa currently serves as the Managing Director of Dangote Sinotruk West Africa Limited under the Dangote Group. However, the investment deal failed to materialise due to the Government of Nepal’s reluctance and procedural hurdles in awarding a limestone mine to the world-renowned conglomerate. As a Nepali, Thapa holds a bitter perspective regarding the home country’s investment climate. He has closely witnessed how policymakers are often motivated by personal business interests and disregard potential investments that do not satisfy their petty agendas.
In a conversation with the HRM Nepal, Thapa disclosed internal insights regarding why the Dangote Group withdrew, acknowledging Nepal’s deterring investment environment and the significant loss this represented for the nation. Excerpts of the interview are provided below.
Q: How is the situation of Nepali diaspora’s investment (capital, knowledge, skill) in Nepal, particularly in the case of Africa?
A: Members of the Nepali diaspora in Africa have made small-scale investments across various sectors, including industry, engineering consultancies, hydropower plants, and the restaurant business. For instance, I recently visited Alcove Restaurant in New Baneshwore, established by the NRN President of Mozambique. Furthermore, small factories are currently operating in Butwal and Pokhara. These individuals have also contributed significant capital to the NRN Infrastructure specialised investment fund constituted by the NRNA ICC.
The Nepali diaspora community in Africa operates a dedicated investment vehicle, ‘NRN Africa Venture’, which focuses on tourism, hydropower, and agriculture. There are currently more than 10,000 NRNs in Africa, primarily employed in hospitality, healthcare, industry, and other professional sectors. Historically, Indian-origin businesspeople with massive investments in Africa recruited experts, technicians, and workers from India. Because many Nepalis work in India, they were also recruited to Africa by these Indian entrepreneurs.
Over the years, high-salaried Nepali professionals have been recruited to Africa from the Gulf countries or directly through competition in India. Alongside this expanding diaspora community, Nepalis in Africa have increasingly embraced entrepreneurship. Today, a significant number of Nepalis successfully operate their own restaurant businesses across the African continent.
Q: Are you personally considering starting or investing in any businesses in Nepal?
A: We have been investing collectively. NRNs in Africa have established NRN Africa venture. We’ve invested in manufacturing, hydropower and others.
Q: You have gained recognition within Nepali society for your initiative in attempting to bring the Dangote Group’s investment to Nepal. Could you elaborate on that role?
A: I have been working with the Dangote Group since 2006, having been selected through a competitive recruitment process with an interview held in Chennai, India. While the role was quite challenging, it was very attractive in terms of financial compensation and conditions. However, at the time of my selection, I was deeply concerned about the security situation in Africa. Dangote was in a major expansion phase then, and during group operations meetings, leadership discussed moving beyond Africa for international investment.
Representatives in Singapore had already begun studying Myanmar and Indonesia as potential targets. During subsequent discussions, I proposed the idea of investing in Nepal, even though the board was not very familiar with the country. The board and senior management expressed interest and tasked me with exploring potential sectors. I requested time for a formal study and conducted a three-week business visit to Nepal to identify feasible opportunities. I ultimately identified cement, hydropower, and sugarcane farming and milling as the primary areas for investment.
After preparing my report, I presented the proposals to the board. While the company lacked experience in hydropower, the group was already a leader in cement and sugar production, with Dangote being Nigeria’s largest cement manufacturer at the time. I highlighted the potential for sugarcane in the Western Terai, noting the many sugar factories just across the border in India. However, Dangote specifically bought into the cement manufacturing proposal due to Nepal’s abundance of raw materials, particularly limestone mines.
Because neighbouring Indian states like Uttar Pradesh and Bihar lack limestone mines, Dangote saw immense growth prospects for exporting cement to India. The group already had strong business ties there regarding equipment and engineering consultancy, which boosted their confidence. Subsequently, a team of Dangote experts visited various limestone mines from Rolpa to Udayapur, an experience that further encouraged them to commit to cement manufacturing in Nepal.
Q: How did you go about presenting and advancing this proposal to the Government of Nepal?
A: Following the approval of the investment proposal by the Dangote Group’s Board of Directors, we approached Investment Board Nepal (IBN), the government’s investment promotion agency. Alongside a US $550 million investment in cement manufacturing, we proposed generating 50 megawatts of hydroelectricity for the plant’s own consumption. The proposed total capacity was 6 million tonnes per annum, which exceeded Nepal’s entire cement production at that time. Initially, IBN responded positively. We established a local company and conducted the necessary studies. Despite legal ambiguities, we eventually paid Rs. 5.3 million for company registration. We finalised the equipment and technologies, hired a mix of local and international (American and Chinese) consultants, and produced our report.
We initially acquired a small mine in Makawanpur for Rs. 70 million, but lab testing revealed the limestone did not meet the required quality standards. We resumed exploration and identified a suitable mine in Dhading based on sample tests. When we approached the government for the rights to this mine, they initially responded positively. However, the Department of Mines and Geology later insisted on an open bidding process to award the mine. We participated in the bidding, but were shocked when the evaluation committee declared Dangote, a global leader, as technically unqualified.
This decision was devastating. I personally felt an immense sense of embarrassment and even considered resigning from the Dangote Group, as I was the primary advocate and a Nepali national. However, the company refused to let me leave, reassuring me that such complications are common in the world of business and international investment.
Q: What was the underlying motive or hidden agenda behind disqualifying a global cement industry giant like the Dangote Group?
A: We were met with undue demands from the political leadership. Dangote had decided to enter Nepal to invest $550 million and conduct business fairly. We refused to entertain informal proposals conveyed from high-level political figures to grant a certain percentage of shares to their cronies, and we ultimately declined to proceed with the investment. It is unfortunate that Dangote was discouraged and compelled to pull back a $550 million approved investment for cement manufacturing. We clearly communicated our stance to the government that we do not deal informally or consider unfair practices as a condition for our entry into Nepal.
While there has been a subsequent proposal for chemical fertiliser production in Nepal, it has not moved forward encouragingly from the government’s side. Nevertheless, the Dangote Group remains open to investing in chemical fertiliser and other potential sectors. Behind the scenes, domestic cement manufacturers also lobbied heavily against Dangote’s entry. These local manufacturers may have overlooked the potential of the Indian market, which Dangote’s presence was intended to open for cement exports.
From the beginning of 2014 to the end of 2017, Dangote spent more than Rs. 250 million in Nepal. These expenditures covered consultancy procurement, technical studies, equipment, mining interests, market surveys, and general company operations, among other costs.
Q: Given Dangote’s bitter experience, how do international investors currently perceive and evaluate the investment climate in Nepal?
A: A negative message spread globally when a world-renowned company was denied mining rights for cement manufacturing, despite the approval of a significant $550 million investment. For investors, it was baffling to witness such an outcome after navigating the entire investment procedure and receiving formal approval in Nepal. The government’s decisions were inconsistent, and the leadership appeared highly insensitive to the critical importance of such an investment.
I believe that leadership changes within the Investment Board and shifts in the government acted as major adversaries to welcoming a massive investment from a globally recognised firm. This incident did not just affect the Dangote Group. It broadcast a discouraging signal across the international community. We had clearly communicated to the Government of Nepal that our objective was to target the Indian market, provided the necessary legal and procedural facilitations were met.
Q: How do you observe Nepal’s cement market currently?
A: Nepal’s cement market has become saturated, and existing manufacturers have been unable to expand their capacity. In fact, they are currently operating far below their potential. There remains no significant potential for large-scale cement exports, and domestic demand has plunged due to continued economic stress. Had Dangote been given the opportunity, exports to India would certainly have opened, as the group sources machinery, equipment, and technical services from India. These established business relationships would have undoubtedly facilitated the export of cement from Nepal to the Indian market.
This missed opportunity was a major setback for Nepal’s cement industry. Beyond its ties with India, Dangote is also a trusted business partner of China. Had Nepal welcomed Dangote’s investment, it would have unlocked numerous opportunities, as the success or failure of any single foreign investment serves as a testament for all prospective international investors.
Moreover, the Dangote Group would almost certainly have expanded its footprint into other sectors, including hydropower, sugarcane farming, and milling.
Q: To what extent do you believe lobbying efforts from the domestic private sector can successfully influence the decisions of policymakers?
A: Even some of the largest groups within the domestic private sector were seeking a partnership with Dangote. However, Dangote maintains a strict policy against local partnerships, opting for 100% foreign investment in all its operations. Recently, the group established what is likely the world’s largest refinery in Nigeria, which has significantly impacted price levels. Dangote focuses heavily on volume and quality to remain competitive in market pricing.
I cannot say for certain whether domestic groups lobbied for the rejection of Dangote’s investment in cement manufacturing. Nevertheless, the government must be decisive about whether the country requires foreign investment in a particular sector. Furthermore, the rent-seeking mentality of the political and bureaucratic leadership must be dismantled through robust and transparent legal and procedural frameworks.
Q: Could we argue that the government’s repeated claims of reforming the investment climate are merely a facade?
A: Not only are foreign investors struggling, but even Non-Resident Nepalis (NRNs) face significant difficulties when investing in Nepal. NRNs established the NRN Infrastructure and Development Company, listed on the Nepal Stock Exchange as NRN Infra, yet investors within this network have been unable to repatriate dividends to their respective countries or sell their shares. Having previously served as a Board Director for the company, I participated in meetings with the finance minister and high-level authorities to address these issues.
Recently, the government introduced a provision allowing NRNs whose Nepali citizenship has been terminated to sell shares in Nepal. However, they still cannot repatriate dividends or the proceeds from those sales. Although the Citizenship Act grants economic and socio-cultural rights to NRNs, they are effectively barred from exercising them. We are also facing challenges with the NRN Investment Fund, which has an authorised capital of Rs 10 billion. The government agreed to a 5% stake and permitted a share price of $100 per unit, and we even hired a CEO to manage it.
Despite five years of navigating ambiguous laws and processes, we have still not been able to list on the secondary market to raise capital as originally agreed. While the government recently introduced a pre-approval mechanism for NRN investments to address repatriation issues, those who invested earlier in foreign currency through this fund continue to face significant bureaucratic hassles.
Q: What factors do you think drive the governmentss apparent reluctance to facilitate and streamline investments?
A: We receive verbal commitments from high-level political and bureaucratic leaders to facilitate investment, however, in practice, numerous hurdles at every stage discourage investors. These obstacles are often deliberately created to foster corruption. During discussions, officials admit these hassles must be addressed and acknowledge the necessary interventions, yet they fail to act. They express commitment to facilitation while underlining its importance, but their lack of follow-through suggests that these complications are intentional. The government should be transparent and clearly inform investors if their capital is not wanted. Engaging investors only to seek undue advantages during decision-making further deters investment.
The Nepal government must realise that every single investment serves as a catalyst to attract further capital. While there is a widespread perception of corruption in African countries, many have made significant changes over the years and successfully attracted global investment. In contrast, there have been no significant discussions in Nepal’s parliament regarding investment laws, reforms, or private sector development. Unless the public pressures parliamentarians and the government, reluctance, ambiguity, and rent-seeking will remain rampant.
Parliamentarians prioritise allocating budgets to their own constituencies rather than expanding the tax base by promoting investment and business. There must be intensive debate on investments, reforms, and private sector development involving stakeholders like the media, non-governmental organisations, and professional bodies to push the government toward reform. In Nepal, all political parties speak of economic prosperity, but they seem unwilling to delve into the actual mechanics of how that prosperity is achieved.
Q: How would you evaluate the effectiveness of Nepali diplomatic missions in their efforts to promote international investment?
A: Economic diplomacy is treated as a mere formality by Nepali diplomatic missions abroad. Our missions suffer from a lack of resources, but they also lack the necessary will, skill, and capacity. I would like to cite one example of how true economic diplomacy is conducted. Once, while coordinating machinery procurement from a U.S.-based company, I was suddenly invited with my family to a reception at the U.S. Embassy in Nigeria for their National Independence Day. I was surprised, as this had never happened before and I had no prior introduction to the officials there.
I later discovered that the embassy gave me this importance because I was initiating a deal with an American company. The embassy, as a government representative, was facilitating an environment to ensure the deal was successful. This serves as a prime example of how other countries conduct economic diplomacy and demonstrates their level of consciousness, which is rarely mirrored by our own diplomatic missions.
Nations with strong economic diplomacy actively lobby for the benefit of businesses from their respective countries. Nepal must also equip the officials deployed to its missions abroad with the knowledge and skills required to conduct effective economic diplomacy.
Q: What is your core message to the rising generation of leaders in politics and the civil service?
A: The message is clear and simple. They should prioritise the economy and provide a conducive environment to attract investment. For example, a foreign IT company registered in Nepal has a subsidiary in Kenya that employs 3,000 Kenyans. Furthermore, while Nepal currently bars investment abroad, Nepalis are investing informally in a manner that is both an open secret and widespread. Rather than prohibiting outward investment, Nepal should allow it in specific specialised sectors that are currently facing market saturation within the country.
Last year, I visited Genesis Nigeria, a company owned by Nepalis but with a parent company registered in the UK. In both companies, Nepalis are employed, yet the profits are repatriated to the UK. If outward investment were legally permitted from Nepal, the government would have new avenues for tax collection on the profits these investors bring back into the country from their international destinations.
Q: Hypothetically speaking, if Nepal were to acknowledge its past mistakes and invite the Dangote Group to return, which sectors do you believe hold the greatest investment potential today?
A: I believe Nepal possesses competitive strengths particularly in hydroelectricity, mines and minerals, tourism, ICT, and high-value agriculture, including medicinal herbs and essential oils. If irrigation facilities were provided in the Terai districts, we would no longer need to import rice. Sugarcane farming in Banke, Bardiya, Kailali, and Kanchanpur alone is sufficient to meet the country’s demand for sugar and spirit for distilleries.
For instance, the Sugar Board of Nigeria receives 5% of the customs duty levied on imported sugar, and the government also provides it with a budget. The board then provides loans to farmers for agricultural inputs and mediates between farmer and industry representatives to fix sugarcane purchase rates. If payment issues arise, the board interacts directly with the industries. This model has been highly successful in Nigeria.
Despite our potential, we sorely lack a pro-investment and business mentality, which prevents us from moving forward. There is over-politicisation of investments, whether in water resources or mines and minerals. We lack the adequate resources and technology to explore and exploit these assets, yet we remain reluctant to attract the foreign investment and technology these sectors require. Consequently, we must change our mentality first. The government should promote and facilitate investments with the clear objectives of maximising revenue, creating employment, and boosting production.
Q: Given that Africa is a rapidly emerging market, yet Nepal has neglected to strengthen its diplomatic ties with African nations, what specific feedback would you offer to the government?
A: There is significant trade and investment potential between Africa and Nepal. However, we are currently importing African goods through India due to our overdependence on our neighbour for trade in items such as petroleum products, chemical fertilisers, and dry fruits, among others. The trade and investment relationship between India and Africa is remarkably strong, spanning the domains of industry, medical tourism, and education.
There is a large number of African students in India, and the import of minerals and petroleum from Africa to India is significant. Additionally, new breeds of cattle, including goats, cows, and other livestock, are brought to India to improve local breeds. African countries are also emerging as high-end tourism destinations. For instance, Tanzania is a globally top-tier destination for wildlife tourism. There has been a tremendous amount of innovation in both tourism products and hospitality throughout Africa.
