Urbanisation and urban growth in Nepal


What are the trends in urbanisation and urban growth in Nepal? What are the main government and donor-funded projects on urbanisation currently under implementation, and planned for the next 10 – 20 years in Nepal? What are the trends in local governance of urban, and urbanising areas in Nepal?


Nepal is one of the ten least urbanised countries in the world. However, it is also one of the top ten fastest urbanising countries. In 2014, the level of urbanisation was 18.2 per cent, with an urban population of 5,130,000, and a rate of urbanisation of 3 per cent (UN DESA, 2014). For the period 2014-2050, Nepal will remain amongst the top ten fastest urbanising countries in the world with a projected annual urbanisation rate of 1.9 per cent (ibid).

Urbanisation in Nepal is dominated by a few large and medium cities with an excessive population concentration in the Kathmandu Valley. The urban population distribution is uneven across the country. High urban growth is occurring in the Kathmandu Valley, the Pokhara Valley, the Inner Tarai valleys, and in market and border towns located on highway junctures between the east-west highway and the five main north-south corridors.

The literature reviewed highlights several urban governance trends:

  • An increase in the creation of new municipalities: At the time of the 2011 census, there were 58 municipalities. Since 2011, 159 new municipalities have been declared.
  • A move towards decentralisation, as evidenced by the formation of the Kathmandu Valley Development Authority (KVDA) and the implementation of the Local Governance and Community Development Programme – II.
  • Renewed legislative and institutional focus on urban governance, for instance, the creation of the Ministry of Urban Development and the Kathmandu Valley Development Authority in 2012, and the development of the National Urban Development Strategy (NUDS) in 2015.

In addition, government and donor documents provide points for potential future trends in urban governance, including:

  • Changes in the number and character of urban areas
  • Changes in the basis for designating urban areas
  • Clarification of the complicated and fragmented urban governance structure
  • Increasing the level of public expenditure for municipal infrastructure.

Government and donor programmes focusing on broader development sectors such as local governance, infrastructure, and water and sanitation are associated with urban development and are a response to increasing service delivery demands. The Kathmandu Valley has received the most attention from international agencies (Choe & Pradhan, 2010). The Asian Development Bank is the largest contributor to urban infrastructure, development and planning in Nepal (ibid). Several other donors including GIZ, the UK Department for International Development, UN-Habitat, and the World Bank are providing assistance in the urban sector


Suggested citation

Bakrania, S. (2015) Urbanisation and urban growth in Nepal (GSDRC Helpdesk Research Report 1294) Birmingham, UK: GSDRC, University of Birmingham.