Get In Touch
139 Kunwar Marg, New Baneshwor, Kathmandu, Nepal
info@gurkhatech.com
Ph: 9851189233
Tech Support
info@gurkhatech.com
Ph: 9851189233
Back
Uncategorized
68 min read

E-Governance Nepal: Bridging the Digital Divide & Reforming Services

E-Governance Nepal: Bridging the Digital Divide & Reforming Services

Executive Summary

Nepal stands at a critical juncture in its national development, with the Government of Nepal articulating a bold vision for a digitally empowered, prosperous society. This vision, encapsulated in the Digital Nepal Framework (DNF), aims to leverage information and communication technology (ICT) to drive socioeconomic growth, enhance public service delivery, and achieve the nation’s ambitious goals for the “IT Decade”. The framework’s structure—encompassing one nation, eight sectors, and eighty digital initiatives—demonstrates a comprehensive and ambitious approach to digital transformation. Early successes, most notably the widespread adoption of the Nagarik App, signal a clear public appetite for digital services and offer a glimpse of what is possible.

However, this report finds a profound and perilous gap between this digital ambition and the nation’s ground reality. The DNF’s success is being fundamentally undermined by a series of deep, systemic challenges that, if left unaddressed, will not only stall progress but actively exacerbate existing inequalities. The most significant of these is a multifaceted digital divide. With national household internet penetration lingering below 40% and a mere 9.5% of households below the poverty line connected, the promise of e-governance remains inaccessible to the most vulnerable. This chasm is further widened by a stark disparity between a general literacy rate of over 76% and a digital literacy rate of just 31%, indicating that access alone is insufficient without the skills to participate meaningfully in the digital ecosystem.

Compounding this are critical weaknesses in foundational infrastructure, institutional governance, and legal frameworks. Nepal’s dependence on neighboring countries for costly international bandwidth, coupled with underdeveloped cybersecurity practices, creates a fragile and expensive digital backbone. Institutionally, a fragmented approach to e-governance, born from a decentralized federal structure without strong central oversight, has led to a proliferation of duplicative, non-interoperable systems across different levels of government. This technical disarray is mirrored by a trust deficit, fueled by an inadequate data protection law that fails to meet international standards and a history of public data breaches.

This report presents a detailed analysis of these challenges, drawing lessons from the e-governance journeys of regional peers like Rwanda, Bangladesh, and Sri Lanka. It concludes with a set of eight prioritized, actionable recommendations for policymakers. These recommendations are built on a core premise: Nepal must pivot from a technology-first approach to a foundation-first strategy. Before advanced digital services can be scaled, the government must aggressively tackle the digital divide through a National Digital Literacy Mission and a “Connected Nepal” rural broadband strategy. It must build trust by enacting a comprehensive data protection law and empowering a central e-governance authority to end the cycle of fragmentation. Only by first establishing this foundation of inclusive access, robust infrastructure, institutional coherence, and public trust can Nepal hope to realize its vision and build a digital state that truly serves all its citizens.

A visual representation of the digital divide in Nepal, with one half of the image showing modern, interconnected digital infrastructure, e-governance interfaces, and people using smartphones in an urban setting. The other half should depict a rural Nepalese village scene with traditional elements, showing a lack of access to technology, symbolizing the profound gap between digital ambition and ground reality. The mood should be thought-provoking, highlighting the challenge.

1. The Digital Nepal Vision and Ground Reality

This section establishes the strategic context of Nepal’s e-governance journey. It critically examines the government’s ambitious vision as laid out in its key policy documents and contrasts this with the challenging on-the-ground realities of digital infrastructure, access, and inclusion. The analysis reveals that while the strategic intent is commendable, its successful implementation is contingent upon addressing foundational weaknesses that currently threaten to undermine the entire enterprise.

1.1. Analyzing the Digital Nepal Framework: Ambitions, Pillars, and Progress

The Government of Nepal’s commitment to digital transformation is formally articulated through a series of evolving policy documents, culminating in the Digital Nepal Framework (DNF). This framework represents the nation’s primary blueprint for leveraging ICT to drive socioeconomic growth and achieve the national vision of a ‘Prosperous Nepal, Happy Nepali’. The journey began with foundational policies like the E-governance Masterplan of 2006 (revised in 2015) and the ICT Policy of 2015, which established the principle of using technology for good governance.

The DNF, first launched in 2019, provided a more structured and ambitious roadmap. It is built around a clear and expansive architecture: one nation, eight sectors, and eighty distinct digital initiatives. The eight identified sectors—digital foundation, agriculture, health, education, energy, tourism, finance, and urban development—were selected for their potential to drive significant socioeconomic impact. This framework was designed not only to modernize public service delivery but also to support the achievement of the Sustainable Development Goals.

Building on this, the government has further escalated its ambitions by declaring the period from 2024 to 2034 as the “IT Decade”. This initiative sets extraordinarily high targets: exporting Rs 3 trillion worth of ICT services over the next ten years while creating 500,000 direct and 1,000,000 indirect jobs in the IT sector. To align with these new goals, a revised version of the framework, Digital Nepal Framework 2.0, has been drafted. This new iteration places a greater emphasis on developing a skilled IT workforce, enhancing Nepal’s global competitiveness, fostering innovation through technologies like Artificial Intelligence (AI), and strengthening the digital economy.

However, the impetus for DNF 2.0 also stems from a candid acknowledgment of the shortcomings of its predecessor. The implementation of DNF 1.0 was significantly hampered by systemic challenges, including a lack of clear ownership among government agencies, poor inter-agency coordination, limited resources, and insufficient technical capacity. This recognition that the initial framework struggled to gain traction is a critical piece of context, highlighting that a compelling vision alone is insufficient without robust implementation mechanisms and the political will to overcome bureaucratic inertia. The evolution from DNF 1.0 to 2.0 thus reflects both an escalation of ambition and a necessary course correction in response to these persistent implementation barriers.

1.2. The Foundational Challenge: Mapping the Digital Divide

The single greatest impediment to realizing the vision of a Digital Nepal is the profound and multifaceted digital divide that separates different segments of its population. This divide is not merely a matter of access but extends to skills, affordability, and geography, creating a significant risk that e-governance initiatives will primarily benefit the already privileged, thereby widening societal inequalities.

Data on internet penetration in Nepal presents a conflicting and often confusing picture, underscoring the challenge of accurate measurement. While the Nepal Telecommunications Authority (NTA) has reported a penetration rate as high as 99.38%, this figure likely reflects the number of active SIM cards rather than unique users and is considered an overestimation. More conservative and reliable analyses provide a starker view. At the start of 2024, the number of internet users stood at 15.40 million, translating to an internet penetration rate of 49.6% of the total population. This figure suggests that more than half of the population, approximately 15.67 million people, remained offline. Data from the National Census in 2021 corroborates this lower estimate, showing that only 37.8% of households had internet access. The government’s 16th Five Year Plan has set a goal of increasing this to 90% by 2029, acknowledging the significant gap that currently exists.

The digital divide is most acutely felt along socioeconomic and geographic lines. According to the Nepal Living Standard Survey 2022/23, a mere 9.5% of households living below the poverty line have internet access. This economic barrier is a critical factor; for the 15.1% of the population living on less than USD 1.90 per day, acquiring smartphones, computers, and paying for data is often an unattainable luxury. Research confirms this strong correlation, with one study finding that individuals of higher socioeconomic status are 3.92 times more likely to have internet access than their lower-income counterparts.

This economic disparity is mirrored by a vast geographic chasm between urban and rural areas, where over 77% of Nepal’s population resides. Connectivity is heavily concentrated in urban centers. For example, Kathmandu Valley boasts a household internet penetration of 79.3%, while the figure for rural areas nationally is a stark 17.4%. This disparity is also evident at the provincial level, with Bagmati province reporting 59.8% household access, compared to just 14% in the remote and rugged Karnali province.

Perhaps the most insidious dimension of the divide is the gap between basic literacy and digital literacy. While Nepal has achieved a general adult literacy rate of 76.3%, a survey by Nepal Rastra Bank found the digital literacy rate to be a staggeringly low 31%. This disconnect is crucial for policymakers to understand: the ability to read and write does not automatically confer the skills needed to navigate digital interfaces, protect oneself from online threats, or utilize e-governance platforms effectively. Without targeted digital literacy programs, even if access were universal, a large portion of the population would remain excluded. The interplay of these factors creates a self-perpetuating cycle of exclusion.

Low income prevents access to devices and data. This lack of access, in turn, prevents the development of essential digital skills. The resulting low digital literacy then becomes a barrier to accessing economic opportunities in the burgeoning digital economy, such as the 1.5 million jobs envisioned by the “IT Decade” plan. Consequently, the current trajectory of e-governance, without a radical and immediate focus on digital inclusion, risks creating a permanent digital underclass, directly contradicting the DNF’s core objective of driving equitable socioeconomic growth for all citizens.

Table 1: Dimensions of Nepal’s Digital Divide (2024-2025 Data)
Metric National Average Urban Rural Lowest Income Quintile Highest Income Quintile Karnali Province Bagmati Province Source
Household Internet Penetration (%) 39.7 79.3 (Kathmandu Valley) 17.4 9.5 (Below Poverty Line) N/A 14.0 59.8
Individual Internet Users (%) 49.6 N/A N/A N/A N/A N/A N/A
Digital Literacy Rate (%) ~31 N/A N/A N/A N/A N/A N/A
Mobile Connections per 100 people 120.6 N/A N/A N/A N/A N/A N/A

1.3. Infrastructure as a Bottleneck: Connectivity, Cost, and Cybersecurity Posture

Beyond the challenges of access and literacy, the very backbone of Nepal’s digital infrastructure presents significant bottlenecks that constrain performance, inflate costs, and expose the nation to substantial security risks. While connectivity is expanding and speeds are improving, structural vulnerabilities in the national network architecture and a nascent cybersecurity posture threaten the stability and trustworthiness of the entire digital ecosystem.

According to data from early 2024, the median internet connection speeds in Nepal, while showing positive growth, remain modest by global standards. Mobile internet connections via cellular networks averaged 15.79 Mbps, while fixed broadband connections reached a median speed of 57.82 Mbps. A critical factor constraining both speed and affordability is Nepal’s landlocked geography and its resulting dependence on India and, to a lesser extent, China for international bandwidth. This reliance creates a non-competitive market for transit, leading to higher costs for Internet Service Providers (ISPs), which are then passed on to consumers. In 2023 alone, Nepali companies spent a significant Rs 4.7 billion on importing bandwidth, a cost inflated by taxes, fees, and currency fluctuations.

This structural issue is at the center of a major policy debate surrounding the proposed National Internet Gateway. The government has floated the idea of creating a single, state-mandated gateway through which all of the country’s incoming and outgoing internet traffic would be routed. While the stated goal may be to enhance security and centralize control, organizations such as the Internet Society have issued stark warnings about the potential negative consequences. Such a gateway would create a single point of failure, increase technical and financial barriers for network operators, and likely degrade the quality and stability of internet services for end-users. It would also grant the government considerable power to monitor traffic and facilitate internet shutdowns, raising serious concerns about surveillance and the free flow of information.

This policy direction reveals a fundamental contradiction at the heart of Nepal’s digital strategy. On one hand, the DNF 2.0 and the “IT Decade” initiative aim to position Nepal as a competitive hub for IT exports, a goal that inherently requires cheap, fast, reliable, and open access to global networks. On the other hand, the National Internet Gateway proposal would create conditions—higher costs, degraded performance, and restricted information flow—that are diametrically opposed to fostering a thriving digital economy. This suggests a critical disconnect between economic policy and security policy, indicating the lack of a cohesive, whole-of-government approach. Policymakers must recognize that these two objectives, a competitive IT export sector and a restrictive national gateway, are likely mutually exclusive.

The nation’s cybersecurity posture represents another profound vulnerability. Nepal’s ranking of 94th out of 182 nations in the 2020 Global Cybersecurity Index reflects a system with significant gaps. Research indicates that cybersecurity practices are particularly underdeveloped within government institutions, which often exhibit lower awareness compared to private organizations. This weakness is driven by a confluence of factors, including insufficient financial resources, a severe lack of skilled cybersecurity personnel within the public sector, and a limited technological infrastructure to support robust defense mechanisms. Frequent cyberattacks on critical government services, such as the passport department, have exposed these glaring vulnerabilities, undermining public confidence in the government’s ability to protect sensitive citizen data.

2. E-Governance in Practice: Assessing Key Citizen-Facing Platforms

Moving from high-level strategy to on-the-ground implementation, this section provides a critical assessment of Nepal’s flagship digital services. The analysis examines the functionality, adoption rates, and user experiences of key platforms designed to interface directly with citizens. While notable progress has been made, particularly with the Nagarik App, a recurring pattern emerges: digital initiatives often digitize the initial steps of a service while failing to re-engineer the underlying bureaucratic processes, thus creating new bottlenecks and only partially delivering on the promise of true e-governance.

2.1. Case Study: The Nagarik App – A Success Story with Caveats

The Nagarik App (Citizen App), launched in 2021, stands as the most visible and widely adopted symbol of Nepal’s e-governance ambitions. Developed to serve as a single, unified platform for government services, the app aims to reduce bureaucratic hurdles and minimize the need for citizens to visit physical offices. It offers a growing suite of over 25 services, including high-demand functions like Permanent Account Number (PAN) registration, obtaining police clearance reports, viewing social security fund statements, and linking various government-issued identity documents. A particularly innovative feature is the integrated E-Chalan system for traffic violations, which allows for the electronic payment of fines and eliminates the need for police to confiscate physical licenses, streamlining a common point of friction between citizens and the state.

The app has achieved impressive scale, with over 1.5 million registered users as of August 2025 and an average of over 45,000 transactions processed daily. Usage data reveals that PAN card registration is the most popular service, accounting for 28% of total requests, followed by police clearance reports (22%) and driving license services (18%). Geographically, adoption is heavily concentrated in the country’s more developed and urbanized areas, with Kathmandu Valley alone accounting for 37% of total users.

Despite its success and international recognition, including a World Summit Award in 2022, the user experience is marred by persistent technical and procedural challenges. User reviews on app stores frequently cite issues such as recurring login problems, failures in receiving one-time passwords (OTPs), and non-functional dropdown menus or fields within application forms, which prevent users from completing submissions. A more fundamental barrier is the app’s core security requirement: users must register with a SIM card that is officially registered in their own name. While this is a pragmatic approach to identity verification in the absence of a universal digital ID, it creates a significant hurdle for many citizens, particularly women or younger family members who may use a phone registered to a male head of household. This single requirement highlights how a seemingly technical decision can have profound implications for digital inclusion.

2.2. Digitizing Identity: Passports, National ID, and the Path to a Unified System

The digitization of foundational identity documents is a cornerstone of any modern e-governance ecosystem. Nepal has made strides in this area with the introduction of an e-Passport system and the rollout of a National Identity Card (NID), though the path to a seamless, unified digital identity remains incomplete.

The Department of Passports offers an online pre-enrollment system for e-Passports, allowing applicants to fill out their demographic information and upload required documents digitally. The system is accessible globally through Nepali embassies and consulates, facilitating applications for the diaspora. However, the process is not fully digital. After completing the online form, applicants must still book an in-person appointment to provide biometric data (photograph and fingerprints) and submit their original documents for verification. The high demand for these appointments, which are often fully booked within hours of becoming available, suggests that while the online front-end is heavily used, the physical back-end creates a significant bottleneck in the system.

Concurrently, the government is promoting the National ID card as a foundational identity document intended to streamline access to a wide range of public services. The long-term vision is for the NID to serve as a single, unified identifier, reducing the need for citizens to present multiple documents for different services. However, the integration of the NID into the broader e-governance ecosystem is still in its early stages.

While it can be linked within the Nagarik App, its mandatory use for accessing services is not yet universal, and citizens continue to face delays and administrative inefficiencies in both obtaining the card and using it to access services. The full potential of the NID as a digital identity anchor will only be realized when it is seamlessly and reliably integrated across all government platforms, a goal that has yet to be achieved.

2.3. Modernizing Core Services: Land Registration (LRIMS) and Business Registration

The digitization of core administrative functions like land and business registration is critical for improving efficiency, transparency, and the overall economic climate. Nepal has made significant progress in digitizing its land records, but the business registration process remains a fragmented, multi-agency affair.

The Land Record Information Management System (LRIMS) represents a major leap forward in modernizing one of the country’s most historically complex and corruption-prone sectors. Developed in partnership with a private geospatial company, LRIMS is a web-based, centralized system that has been successfully deployed in all 126 Land Revenue Offices across the country’s 77 districts. The system has digitized millions of land records and captures all land-related transactions, from sales to amendments. It is built on a modern three-tier architecture, which is a substantial improvement over the previous, isolated client-server systems. Critically, LRIMS integrates land data with other government systems by linking to citizenship IDs and tax management information. It introduces a unique Parcel Identification Number (PIN) for each land parcel and a Land-ownership Identification Number (LIN) for each landowner, creating a standardized and verifiable system for tracking ownership and transactions. This initiative has been recognized for its success in automating land transaction processes and serves as a strong example of effective digitization of a core government function.

In contrast, the process for registering a new business remains cumbersome and illustrates the challenges of inter-agency coordination. While the Office of Company Registrar (OCR) provides an online portal for the initial steps of company registration, such as name reservation and document submission, this is only the first of several required interactions. An entrepreneur must subsequently register for a tax number with the Inland Revenue Department, obtain a business operation permit from the local Ward office, and, for e-commerce businesses, register with the Department of Commerce, Supplies & Consumer Protection (DOCSCP). Many of these steps still require physical presence, the submission of paper documents, and manual processing. The lack of a unified, single-window system for business registration means that entrepreneurs must navigate a complex and time-consuming bureaucratic maze, undermining the potential efficiency gains of digitalization.

This contrast between land and business registration reveals a crucial pattern. The success of LRIMS is partly attributable to its focus on a single, well-defined domain under one primary department. The struggles of e-business registration highlight the immense difficulty of coordinating and integrating processes that span multiple, independent government agencies at the federal, provincial, and local levels.

2.4. Securing the Social Safety Net: Digitizing Social Security Allowances (SSA)

The delivery of social security allowances (SSA) to millions of beneficiaries—including senior citizens, single women, and persons with disabilities—is a critical function of the state. The traditional manual, cash-based system is notoriously inefficient, costly, and prone to leakage. In response, the government, with support from partners like the UNCDF and the World Bank, has initiated pilot programs to digitize these payments, demonstrating significant potential for reform.

A key pilot project, implemented in several districts, tested a Public-Private Partnership (PPP) model where the responsibility for cash disbursement was shifted from local government officials to a commercial bank acting as a Payment Service Provider (PSP). Under this model, the government remains responsible for beneficiary identification and enrollment. The data is entered into a central Management Information System (MIS), which serves as a digital registry. The government then electronically transfers the bulk funds to the PSP, which credits the individual accounts of beneficiaries. Payments are delivered to recipients in their local communities by a network of branchless banking agents equipped with smartcards and point-of-sale devices.

The preliminary results of this pilot are highly promising. The most significant impact is a potential reduction in operational costs by over 60%. This saving is primarily achieved by freeing up the time of local government officials, who no longer have to manage the logistics and risks of handling large amounts of cash. They can instead focus on their core administrative duties, such as revenue collection. Furthermore, the digital system enhances governance and reduces corruption. The central MIS allows for de-duplication checks to eliminate fraudulent or ghost beneficiaries, while secure authentication mechanisms like biometrics or smartcards ensure that the payment reaches the intended recipient.

Despite these clear benefits, scaling this model nationwide presents challenges. The digital switch requires new technical and organizational arrangements and, most importantly, the establishment of robust and reliable PPPs. The success of the model depends on the capacity of the private sector partner to build and manage an extensive agent network, particularly in remote and hard-to-reach areas. Navigating the complexities of these long-term partnerships, which involves redistributing responsibilities between public and private actors, has been identified as a “major challenge” that will require careful management and a strong regulatory framework to overcome.

The experience across these diverse platforms reveals a consistent “last mile” problem that is often physical, not digital. For passports, the process culminates in a physical appointment. For business registration, it involves multiple visits to different physical offices. Even the Nagarik App, a digital-first service, is anchored to a physically obtained and registered SIM card. This pattern demonstrates that the government has been successful in digitizing the front-end of many services—the application forms and information portals—but has largely failed to re-engineer the complex, often paper-based, back-end processes of verification, approval, and issuance. This failure to achieve end-to-end digitization means that the primary benefits of e-governance, such as significant time savings, cost reduction, and fully remote access, are only partially realized. The system merely shifts the bottleneck from one part of the process to another rather than eliminating it entirely.

Furthermore, the high visibility and success of the Nagarik App may be creating a “centralization illusion.” While the app is marketed as a “one-stop digital platform,” it primarily functions as a user-friendly portal or aggregator that sits on top of a fragmented foundation. Many critical government systems, such as LRIMS and the various departmental databases, are being developed and operated independently. The app provides a single window for the citizen, but it does not solve the underlying systemic problem of data silos, a lack of interoperability, and duplicative infrastructure at the back end. This creates a significant risk that policymakers may see the app’s success and conclude that the e-governance challenge is being solved, while the deeper, more complex work of integrating government systems and data remains undone.

3. Systemic Barriers to a Truly Digital State

While Nepal has demonstrated the capacity to launch individual digital platforms, its ambition to become a truly digital state is being systematically thwarted by deep-rooted challenges in governance, legal frameworks, and human capital. These barriers are not merely technical; they are institutional and structural, preventing the successful scaling and integration of e-governance initiatives. Without a concerted effort to dismantle these systemic obstacles, progress will remain piecemeal, and the transformative potential of digital technology will go unrealized.

3.1. The Governance Gap: Fragmentation, Interoperability, and Institutional Resistance

The governance structure of Nepal’s e-governance ecosystem is its greatest weakness. The shift to a federal system of government, while politically necessary, has had the unintended consequence of creating a chaotic and fragmented digital landscape. The constitution grants significant autonomy to provincial and local governments, empowering them to design and implement their own governance systems. In the absence of a strong, coordinated national framework with enforceable technical standards, this autonomy has led to the proliferation of “isolated, duplicative and often unsustainable systems” across the country’s 753 local levels. This decentralized approach not only leads to a massive wastage of public resources, as different municipalities procure similar systems from various vendors, but also creates an insurmountable challenge for interoperability and data sharing. It has fostered a dependency on federal data centers for infrastructure, while hindering the development of scalable, replicable solutions that could benefit all local governments. This fragmentation at the local level is mirrored by a lack of interoperability at the federal level.

Each government ministry and department typically operates its own separate Management Information System (MIS), creating data silos that prevent a holistic, “whole-of-government” approach to service delivery. The absence of a secure data exchange platform means that agencies cannot easily share information, forcing citizens to repeatedly submit the same data and documents for different services. This not only creates inefficiency but also prevents the government from gaining a unified view of a citizen’s interactions with the state, which is a prerequisite for providing proactive and personalized services.

The root of this technical fragmentation is political and structural. The autonomy granted under federalism, without corresponding mandates for digital standardization, has created a technocratic playground where vendors can capitalize on the lack of coordination. Solving this requires a political solution that realigns the federal structure with a shared digital vision. The establishment of the E-Governance Commission in 2022 is a positive step towards improving coordination, but its success will depend on whether it is granted the legal authority to enforce standards and mandate the use of shared platforms across all levels of government.

Compounding these structural issues is significant institutional resistance to change within the bureaucracy itself. The adoption of digital systems is often hindered by bureaucratic inertia and a reluctance among many public officials to adapt to new, technology-driven processes. This resistance is not always irrational. Automation and digitization impose more transparent and regulated workflows, which can reduce the discretionary power and flexibility that civil servants have traditionally held. In a system where patronage can be a source of influence, the transparency offered by e-governance can be perceived as a threat. Overcoming this resistance requires more than just technical training; it necessitates a broader public sector reform effort that includes incentives for digital adoption and a clear communication of benefits for both the public and the civil servants themselves.

3.2. The Trust Deficit: Data Protection Law and Cybersecurity Realities

For citizens to willingly engage with e-governance platforms and entrust them with their most sensitive personal information, they must have confidence in the government’s ability and commitment to protect that data. In Nepal, this trust is fragile, undermined by an inadequate legal framework for data protection and a troubling track record of cybersecurity vulnerabilities.

Nepal’s primary legislation governing data privacy, the Individual Privacy Act of 2018, is critically insufficient for the digital age. The law has several fundamental weaknesses that leave citizens’ data at risk. Most notably, it fails to establish an independent Data Protection Authority with the power to investigate breaches and enforce penalties. This absence of a dedicated regulator means there is no effective oversight or accountability mechanism. The Act also lacks clear definitions for key roles like ‘data controller’ and ‘data processor,’ which are standard in modern data protection regimes like the EU’s General Data Protection Regulation (GDPR), creating ambiguity about who is legally responsible in the event of a data breach. Furthermore, the law is silent on crucial issues such as rules for cross-border data transfers and does not provide citizens with a clear ‘right to be forgotten’.

This weak legal foundation has tangible consequences. High-profile data breaches at major private companies, including the food delivery service Foodmandu and the ISP Vianet, have exposed the personal information of tens of thousands of Nepali citizens. These incidents have starkly demonstrated the real-world risks of inadequate data security and have understandably eroded public trust in the digital ecosystem as a whole. When citizens see that private companies can lose their data with little to no consequence, their confidence in the government’s ability to secure its own, even more sensitive, databases is diminished.

This trust deficit is further exacerbated by government actions that are perceived as prioritizing surveillance over privacy. Proposed legislation that would grant the National Investigation Department the authority to monitor calls, messages, and social media posts without prior court approval sends a chilling message to the public. Such measures create a rational fear among citizens that centralized government databases could be used for surveillance, not just service delivery.

This confluence of factors—a weak data protection law, a history of public data breaches, and fears of government surveillance—creates a vicious cycle of distrust. Citizens become hesitant to provide their data to government systems, which in turn suppresses the adoption of e-governance services. This hesitancy will act as a major brake on the entire Digital Nepal project, limiting its potential impact. Trust is not a “soft” or secondary issue; it is a hard, foundational prerequisite for a successful digital transformation. Without it, even the most technologically advanced systems will fail to achieve widespread adoption and legitimacy.

3.3. The Human Capital Deficit: Technical Skills in the Public Sector

The successful implementation and sustainable operation of a complex, nationwide e-governance system depend critically on the availability of skilled human capital within the public sector. Nepal faces a severe deficit in this area, with a government workforce that largely lacks the technical expertise and strategic understanding required to lead a digital transformation.

A fundamental gap exists in the overall comprehension of ICT within the government itself. The responsibility for managing complex digital systems and information is often delegated to junior-level staff, such as computer operators, who may have basic operational skills but lack the strategic expertise in system architecture, data management, cybersecurity, or project management required for effective implementation. There is a recognized and pressing need to recruit and retain highly skilled IT professionals—such as software developers, network engineers, and data scientists—within government offices, but the civil service structure and compensation schemes make it difficult to compete with the private sector for top talent.

This internal capacity gap has led to a heavy reliance on external vendors, often foreign companies, for the development of critical government systems. This dependency creates its own set of problems. As Chief Secretary Ek Narayan Aryal has pointed out, many of the government’s core systems—for immigration, procurement, and passports—are now outdated and effectively “expired”. The foreign companies that originally built them are often no longer available to provide support or carry out necessary upgrades, leaving the government with legacy systems that are difficult to maintain and secure. This creates a critical vulnerability and highlights the unsustainability of a model that does not build in-house capacity.

While DNF 2.0 correctly identifies the need to develop a skilled IT workforce and improve the digital proficiency of government employees, current efforts are falling short. Training programs for public officials, when they exist, often focus on very elementary skills and are insufficient to build the deep technical and managerial competencies required. A comprehensive capacity-building program is needed, one that goes beyond basic computer literacy and focuses on specialized skills for IT professionals and on digital leadership and strategy for senior civil servants. Without a concerted investment in its own human capital, the Government of Nepal will continue to struggle with project implementation, vendor management, and the long-term sustainability of its digital infrastructure.

4. Lessons in Digital Transformation: Regional and Global Perspectives

To chart a successful path forward, it is essential for Nepal to learn from the experiences of other developing nations that have embarked on similar digital transformation journeys. The cases of Rwanda, Bangladesh, and Sri Lanka offer a valuable comparative lens, providing models of success to emulate, common challenges to anticipate, and cautionary tales to heed. By synthesizing these regional and global best practices, Nepal can ground its own strategy in proven models and avoid repeating the mistakes of others.

4.1. The Rwandan Model: Lessons from the Irembo Platform

Rwanda’s e-governance journey offers a powerful example of how a clear vision, sustained political commitment, and an innovative partnership model can drive rapid progress. The centerpiece of Rwanda’s success is the Irembo platform, a “one-stop shop” portal that provides citizens with online access to over 89 essential public services.

A key lesson from Rwanda is the effective use of a Public-Private Partnership (PPP) to build and operate this central platform. The government entered into a long-term agreement with a private company, Irembo Ltd., to develop and manage the portal. This model allowed the government to leverage private sector expertise, innovation, and capital, thereby accelerating the delivery of services while transferring significant implementation and operational risks. The government’s role shifted from being the direct implementer to that of a regulator and overseer, ensuring that the private partner met its service level agreements and public objectives. This approach could be highly relevant for Nepal, which faces similar constraints in public financing and technical capacity.

However, the success of the Irembo PPP was not accidental; it was built upon a foundation of strong and consistent political will.

Rwanda’s digital transformation has been a central pillar of its national development strategy for over two decades, guided by its long-term Vision 2020 and a series of successive National Information and Communication Infrastructure (NICI) plans. This sustained commitment from the highest levels of government created the stable and predictable policy environment necessary for a long-term PPP to succeed.

Despite its remarkable progress, Rwanda’s experience also serves as a reminder that even a well-executed platform cannot solve all foundational challenges. The country continues to grapple with issues of digital literacy and a significant urban-rural divide, which limit the ability of all citizens to access and benefit from the Irembo platform. This underscores the point that technology platforms and inclusion initiatives must proceed in parallel.

4.2. The Bangladeshi Approach: The Power of a Unified ‘Digital Bangladesh’ Vision

Bangladesh provides another compelling regional case study, demonstrating the importance of a unified national vision and a centralized approach to platform architecture. The “Digital Bangladesh” initiative has been a clear and consistent government priority, aimed at using ICT to improve service delivery, enhance transparency, and empower citizens.

A key architectural difference from Nepal’s current fragmented system is Bangladesh’s establishment of a single national web portal (bangladesh.gov.bd). This portal serves as a unified point of entry for all government services and information, interconnecting every level of the administration, from central ministries and departments down to the 4,550 local unions. This centralized approach ensures a consistent user experience and provides the architectural foundation for greater interoperability between government agencies. It stands in stark contrast to Nepal’s current ecosystem, where each local government is free to procure its own disparate system.

The success of the initiative was also driven by a strong, citizen-centric focus, embodied by the “Access to Information” (A2I) program, which was implemented with support from partners like the UNDP. The explicit goal was to bring services to the people’s doorsteps, particularly in rural areas, through a network of Union Information Service Centers. This focus on the “last mile” of service delivery ensured that the benefits of digitization were not confined to urban elites.

However, like Nepal and Rwanda, Bangladesh’s journey is far from complete. The country continues to face significant obstacles, including inadequate IT infrastructure, a shortage of skilled manpower within the government, and the persistent challenge of raising public awareness and driving adoption of e-services. This highlights a common theme across developing countries: building the technology is often the easier part; the harder, longer-term challenges are building the infrastructure, human capacity, and public trust to support it.

4.3. Sri Lanka’s Journey: Cautionary Tales of Unsatisfactory Performance

The experience of Sri Lanka offers a crucial cautionary tale for Nepal, demonstrating how a national e-governance program can fail to deliver on its promise if foundational issues are not adequately addressed. Despite the launch of an ambitious “e-Sri Lanka” program, its performance has been widely deemed unsatisfactory, and the public value generated has been low.

The reasons for this underperformance are alarmingly similar to the challenges currently facing Nepal. A primary issue was a severe lack of available end-to-end e-services; many projects were proposed but never fully implemented, leaving citizens with few digital options. This was compounded by a very low uptake of the services that were available, with one survey finding that only 22.3% of citizens were even aware of them.

Furthermore, the program was plagued by low adoption of ICT within government agencies themselves and significant cybersecurity threats, including unauthorized access to government data and data loss, which undermined public trust. The failure to address issues of digital literacy, affordability, and language barriers also meant that the benefits of the program were not equitably distributed. Sri Lanka’s journey serves as a stark warning: pushing forward with a high-level digital transformation agenda without first securing the necessary infrastructure, building institutional capacity, ensuring data security, and driving public awareness and literacy is a recipe for failure.

4.4. Synthesizing Best Practices for Least Developed Countries (LDCs)

Drawing from these case studies and broader analyses by institutions like the World Bank, a clear set of best practices for e-governance implementation in developing countries emerges. These principles should form the bedrock of Nepal’s revised strategy.

  • First, e-governance initiatives must be integrated into broader public sector reforms rather than being treated as standalone IT projects. The goal is not just to automate existing processes but to fundamentally re-engineer them for efficiency and citizen-centricity. This requires significant process re-engineering before any technology is deployed.
  • Second, strong project management and departmental ownership are critical. This includes having clear goals, using established technical standards to avoid unnecessary customization, and ensuring that government departments have internal champions to lead implementation.
  • Third, a substantial and sustained investment in capacity building is non-negotiable. Successful projects often dedicate around 10% of their budget to training for all levels of staff—from senior leaders to clerical workers—as well as for citizens to raise awareness.
  • Finally, a phased approach that starts with small, manageable pilot projects is often more effective than a “big bang” rollout. These pilots should be systematically evaluated by independent agencies before any decision is made to scale them up, ensuring that the strategy is evidence-based and adaptable.
Table 2: Comparative E-Governance Snapshot: Nepal, Rwanda, Bangladesh
Indicator Nepal Rwanda Bangladesh
UN EGDI Rank 119 119 N/A
Internet Penetration (%) 49.6 ~73 (Mobile Phone) N/A
Digital Literacy (%) ~31 N/A (Known challenge) N/A (Known challenge)
Central Governance Model Fragmented (Federalism-driven) Centralized PPP Centralized Public
Flagship Platform Nagarik App Irembo Platform National Web Portal
Key Success Factor High user adoption of mobile app Sustained political will, PPP model Unified portal, citizen-centric vision (A2I)
Major Persisting Challenge Digital divide, lack of interoperability Rural-urban divide, digital literacy Infrastructure, skilled manpower shortage

Sources:

A hopeful and futuristic vision of a 'Digital-First Nepal'. The image should feature a stylized map of Nepal overlayed with glowing lines of data and interconnected networks, representing ubiquitous digital infrastructure. Diverse Nepalese citizens (men, women, young, elderly, from both urban and rural backgrounds) are shown seamlessly interacting with various e-governance services on modern devices, symbolizing widespread digital inclusion, trust, and accelerated service delivery. Emphasize a vibrant and prosperous digital future where technology benefits all.

5. Actionable Recommendations for a Digital-First Nepal

The preceding analysis has identified the significant gap between Nepal’s digital ambitions and its current reality. To bridge this gap and build a truly inclusive and effective e-governance ecosystem, a fundamental strategic pivot is required. The government must shift its focus from launching disparate, technology-led projects to building the foundational pillars of access, trust, and institutional capability. This section translates the report’s findings into a concrete, prioritized, and actionable roadmap for policymakers, organized into three key areas: foundational reforms, institutional overhaul, and accelerated service delivery.

5.1. Foundational Reforms: Bridging the Digital Divide and Building Trust

The most urgent priority is to address the foundational weaknesses that are holding back all other progress. Without widespread, equitable access and a baseline of public trust, even the most sophisticated e-services will fail to achieve their transformative potential.

Recommendation 1: Launch a National Digital Literacy Mission.

  • Action: The government should immediately establish a high-level, multi-stakeholder National Digital Literacy Mission with the explicit goal of raising the national digital literacy rate from the current 31% to over 60% within five years.
  • Implementation: This mission, co-led by the Ministry of Education and the Ministry of Communications and Information Technology, should develop a standardized national digital literacy curriculum based on internationally recognized frameworks like the European Union’s DigComp. The curriculum should cover a range of competencies, from basic device operation and online safety to using e-governance services and creating digital content. Delivery should be decentralized, leveraging the existing network of schools, public libraries, and Community Learning Centers (CLCs) as primary training hubs. The mission should actively partner with the private sector, including telecommunication companies and successful Nepali e-learning platforms like MeroSiksha and Learnsic, to develop and disseminate training materials, particularly through mobile-friendly formats.

Recommendation 2: Implement a “Connected Nepal” Rural Broadband Strategy.

  • Action: To address the stark urban-rural connectivity gap, the government must prioritize public investment in open-access, “middle-mile” fiber optic infrastructure that connects underserved districts and rural municipalities to the national backbone.
  • Implementation: This strategy should be guided by a national “Dig Once” policy, which mandates the installation of fiber optic conduit during all public road construction and transportation projects to drastically reduce deployment costs. For “last-mile” connectivity in the most remote and geographically challenging areas, a hybrid technology approach is essential.

This should combine the extension of fiber networks with more agile and cost-effective solutions, such as subsidized satellite internet services and the promotion of community-owned Wi-Fi hotspots. To ensure affordability, the government should introduce targeted subsidies or voucher programs for low-income households to offset the cost of internet subscriptions and basic smart devices.

Recommendation 3: Enact a Comprehensive Data Protection and Cybersecurity Law.

  • Action: The Parliament should draft and pass a new, comprehensive Data Protection and Cybersecurity Act that aligns with international best practices, such as GDPR and the OECD Privacy Guidelines, to build citizen trust.
  • Implementation: This new law must rectify the deficiencies of the current Privacy Act. Its core components should include: the establishment of a fully independent and well-resourced Data Protection Authority with the power to investigate complaints and levy meaningful penalties; clear, legally binding principles for data processing, including purpose limitation, data minimization, and lawful basis; unambiguous requirements for obtaining informed user consent; and mandatory data breach notification protocols. Concurrently, the government must fully operationalize the National Cyber Security Center, providing it with a clear mandate, a sufficient budget, and the necessary skilled personnel to proactively defend government networks and respond to incidents.

5.2. Institutional and Governance Overhaul

Technical solutions alone cannot succeed within a dysfunctional governance structure. Ending the current cycle of fragmentation and building sustainable capacity requires a fundamental overhaul of how e-governance is managed within the state apparatus.

Recommendation 4: Empower a Central E-Governance Authority.

  • Action: The government must legally empower the E-Governance Commission (or a successor body) to act as the central authority for all digital government initiatives, with a mandate that extends across all ministries and levels of government.
  • Implementation: This authority’s power must be codified in law, granting it the explicit responsibility to set, audit, and enforce mandatory technical standards, a national interoperability framework (building on the existing NeGIF), and centralized procurement guidelines for core digital systems. To end the wasteful proliferation of duplicative systems at the local level, the Commission’s standards must supersede the digital procurement autonomy of individual ministries and municipalities for shared, foundational infrastructure.

Recommendation 5: Mandate a “Government-as-a-Platform” Model.

  • Action: Nepal must strategically shift its e-governance architecture from building separate, siloed applications for each department to creating a set of shared, centralized digital platforms that all agencies can use.
  • Implementation: Investment should be prioritized for the development of three core, cross-cutting platforms: a unified and secure National Digital Identity system, building upon the existing National ID card infrastructure; a single, integrated Government Payment Gateway to handle all public sector transactions; and a secure Government Data Exchange Layer (an “X-Road” style system) to enable seamless and controlled data sharing between agencies. The empowered central authority (Rec. 4) must mandate that all new e-services are built using these shared components and APIs, ensuring interoperability by design.

Recommendation 6: Launch a “Digital Civil Service” Capacity Building Program.

  • Action: To address the critical human capital deficit, the government should create a dedicated career track and corps of IT professionals within the civil service.
  • Implementation: This would involve establishing new job classifications, offering competitive salary scales to attract and retain technical talent, and creating clear paths for career progression and continuous professional development. For the broader, non-technical civil service, a mandatory digital skills program should be implemented. This program must go beyond basic computer use and focus on building competencies in data-driven decision-making, business process re-engineering, digital project management, and cybersecurity awareness, developed in partnership with Nepal’s universities and private sector IT training institutes.

5.3. Accelerating Service Delivery

With a stronger foundation in place, the government can accelerate the delivery of high-impact digital services by adopting a more strategic, citizen-centric, and collaborative approach.

Recommendation 7: Adopt a Phased, Citizen-Centric Rollout Strategy.

  • Action: Instead of attempting to partially digitize dozens of services at once, the government should prioritize the complete, end-to-end digitization of the 5-10 highest-volume, highest-impact citizen services (e.g., vital event registration, land title transfer, business permits, vehicle registration).
  • Implementation: The rollout for each prioritized service should follow a disciplined, four-stage model: Process Re-engineering: First, simplify and optimize the existing manual process to eliminate unnecessary steps. Digitization: Only then, move the newly simplified process online. Integration: Connect the new digital service to the shared national platforms (Digital ID, Payments, Data Exchange). Evaluation and Iteration: Continuously gather user feedback and performance data to iteratively improve the service over time.

Recommendation 8: Foster Strategic Public-Private Partnerships (PPPs).

  • Action: The government should develop a clear, transparent, and predictable legal and financial framework specifically for PPPs in the digital technology sector.
  • Implementation: This framework should outline standard models, such as Build-Operate-Transfer (BOT) or Design-Build-Finance-Operate-Maintain (DBFOM), that are suitable for large-scale e-governance projects. Using Rwanda’s Irembo platform as a case study, Nepal could structure a PPP to build and operate the unified back-end service delivery platform that would power the next generation of the Nagarik App and other government services. Such a partnership would leverage private sector innovation, efficiency, and capital, while ensuring strong government oversight, public ownership of all citizen data, and clear performance metrics.

Table 3: Policy Recommendation Matrix for Digital Nepal

Recommendation Key Actions Primary Responsible Agency Supporting Partners Priority Level Implementation Timeline Key Performance Indicator (KPI)
1. National Digital Literacy Mission Develop & deploy standardized curriculum; leverage CLCs, schools; partner with private sector. Ministry of Education, Science & Technology (MoEST) MoCIT, NGOs, Telcos, E-learning Platforms High 0-12 Months (Launch) Digital Literacy Rate > 60% by 2029.
2. “Connected Nepal” Rural Broadband Invest in middle-mile fiber; implement “Dig Once” policy; use hybrid tech (satellite, Wi-Fi). Nepal Telecommunications Authority (NTA) MoCIT, Local Gov’ts, Private ISPs High 1-3 Years Household internet penetration in rural areas > 75% by 2030.
3. Data Protection & Cybersecurity Law Draft & pass new GDPR-aligned law; establish independent Data Protection Authority. Ministry of Law, Justice and Parliamentary Affairs MoCIT, E-Governance Commission High 0-12 Months New law enacted; DPA established and operational.
4. Empower Central E-Gov Authority Legally empower E-Gov Commission to set & enforce mandatory standards for all gov’t levels. Office of the Prime Minister and Council of Ministers (OPMCM) E-Governance Commission, MoFAGA High 0-12 Months Interoperability framework legally mandated and enforced.
5. “Gov’t-as-a-Platform” Model Build shared platforms (Digital ID, Payments, Data Exchange); mandate API-based service dev. E-Governance Commission MoCIT, NITC, Private Sector Partners Medium 1-3 Years 80% of new e-services built on shared platforms by 2028.
6. “Digital Civil Service” Program Create dedicated IT career track; implement mandatory digital skills training for all civil servants. Ministry of Federal Affairs and General Administration (MoFAGA) Public Service Commission, Universities Medium 1-3 Years 500 IT professionals recruited into new track by 2027.
7. Phased, Citizen-Centric Rollout Prioritize end-to-end digitization of top 10 services; follow re-engineer-digitize-integrate model. E-Governance Commission All Service-delivery Ministries Medium 1-3 Years Top 10 services fully digitized with >70% citizen satisfaction rating.
8. Strategic Public-Private Partnerships Develop clear legal framework for digital PPPs; launch PPP for unified service platform. Investment Board Nepal (IBN) MoCIT, E-Governance Commission, World Bank Low 3-5 Years PPP framework established; tender issued for unified platform.

Works cited

  • (PDF) Dimensions of Digital Nepal Framework and Appropriate …, accessed on September 8, 2025, https://www.researchgate.net/publication/338986956_Dimensions_of_Digital_Nepal_Framework_and_Appropriate_Roadmap
  • E-governance in Federal Nepal: The failure of decentralised …, accessed on September 8, 2025, https://thehimalayantimes.com/opinion/e-governance-in-federal-nepal-the-failure-of-decentralised-digitalisation
  • INFORMATION AND COMMUNICATION TECHNOLOGY – Investment Board Nepal, accessed on September 8, 2025, https://ibn.gov.np/uploads/documents/summaryictpdf-1746-491-1730783484.pdf
  • 2018 Digital Nepal Framework | PDF | Nepal | Economic Growth – Scribd, accessed on September 8, 2025, https://www.scribd.com/document/468862004/2018-Digital-Nepal-Framework
  • Measuring the public value of e‐government: a case study from Sri Lanka – Emerald Insight, accessed on September 8, 2025, https://www.emerald.com/tg/article/5/1/81/374756/Measuring-the-public-value-of-e-government-a-case
  • United Nations e-Government Development Index – EGOVKB | United Nations > Data > Country Information, accessed on September 8, 2025, https://publicadministration.un.org/egovkb/en-us/Data/Country-Information/id/120-Nepal
  • Digital Inclusion Bytes: Digital Skills – Using frameworks and skill lists, accessed on September 8, 2025, https://www.digitalinclusion.org/blog/digital-inclusion-bytes-digital-skills-using-frameworks-and-skill-lists/
  • Exploring Paths to a U.S. Digital Skills Framework (and Why We Need One): The Landscape of Existing Frameworks – New America, accessed on September 8, 2025, https://www.newamerica.org/oti/reports/exploring-paths-to-a-us-digital-skills-framework/the-landscape-of-existing-frameworks/
  • How UNESCO is reaching marginalized communities in Nepal with literacy, accessed on September 8, 2025, https://www.unesco.org/en/articles/how-unesco-reaching-marginalized-communities-nepal-literacy
  • MeroSiksha | Largest online Learning Platform in Nepal, accessed on September 8, 2025, https://merosiksha.com/
  • Learnsic – Nepal’s largest learning platform, accessed on September 8, 2025, https://learnsic.com/
  • Building Broadband Access for Stronger Communities – CivicWell, accessed on September 8, 2025, https://civicwell.org/civic-resources/building-broadband-access-for-stronger-communities/
  • Internet for All: The Future of Connectivity in Remote Areas – MKController, accessed on September 8, 2025, https://mkcontroller.com/internet-for-all-effective-strategies-to-connect-remote-and-marginalized-regions/
  • Privacy and data protection – OECD, accessed on September 8, 2025, https://www.oecd.org/en/topics/privacy-and-data-protection.html
  • Data protection and privacy laws | Identification for Development – ID4D, accessed on September 8, 2025, https://id4d.worldbank.org/guide/data-protection-and-privacy-laws
  • Developing skills for digital government – OECD, accessed on September 8, 2025, https://www.oecd.org/en/publications/developing-skills-for-digital-government_f4dab2e9-en.html
  • E- Governance Initiatives in India: A Case Study of Union Territory, Chandigarh – Gian Jyoti Institute of Management and Technology, accessed on September 8, 2025, https://www.gjimt.ac.in/web/wp-content/uploads/2017/10/N12.pdf
  • Public-Private Partnerships (PPPs): Definition, How They Work, and Examples, accessed on September 8, 2025, https://www.investopedia.com/terms/p/public-private-partnerships.asp
  • Public Private Partnership – Digital Cooperation Organization, accessed on September 8, 2025, https://dco.org/wp-content/uploads/2024/10/Public-Private-Partnership.pdf
Tagged with:
Arjan KC
Arjan KC
https://www.arjankc.com.np/
Next Post
Mastering Jekyll Taxonomy: Categories, Tags, and Archives

Related Posts

  • Arjan KC
  • Posted by Arjan KC
October 18, 2025
56 min read

Digital Marketing for Nepal Insurance Growth & Strategy

Digital Marketing for Nepal Insurance Growth & Strategy Industry Overview: The Nepalese...

Read More
  • Arjan KC
  • Posted by Arjan KC
October 16, 2025
58 min read

Digital Marketing for Nepal Retail: Supermarkets & Kiranas

Digital Marketing for Nepal Retail: Supermarkets & Kiranas Industry Overview The supermarket...

Read More

Leave a Reply

We use cookies to give you the best experience. Cookie Policy