"The country’s rugged terrain, infrastructure gaps, inadequate human capital and political uncertainty continue to constrain economic growth and development. Nepal is highly vulnerable to disasters caused by natural hazards, climate change, and environmental degradation. COVID-19 also continues to affect Nepal’s achievements on economic growth, inclusiveness, and poverty reduction... Weak governance has long affected the effectiveness of development assistance to Nepal, and the country faces challenges to ensure the smooth implementation of federalism. These include limited capacity at subnational levels, slow progress in passing needed legislations and deployment of staff, and lack of clarity on the mandates and responsibilities as well as coordination among the three tiers of government."