BOI draws $ 1.8 bn in FDIs despite setbacks says State Minister.
By: Staff Writer
Colombo (LNW): Sri Lanka has attracted US $ 1.8 billion worth of Foreign Direct Investments (FDIs) so far in 2023 with India playing a lead role despite the Sri Lankan economy facing its worst crisis in decades and external and internal setbacks, revealed State Minister Dilum Amunugama.
Although it was pushed to the brink last year by power cuts, chronic shortages of fuel and food and soaring inflation, Sri Lanka managed to raise its FDI to $1.8 billion, data from the Board of Investment (BoI) showed.
Part of the bump came from India, which wants to keep China’s expansion in its neighbour in check. India’s Adani group signed up for two wind power plants worth $442 million last year.
He emphasised that the Government’s far-sighted and politically unpopular economic stabilization measurement has provided a much-needed foundation for reforms in the institutional and regulatory.
“This communicated positive signals to our investor community,” Amunugama said. The significant achievement of curbing the acceleration cost of living which has resulted in the single digit of inflation from 74% in September 2022 to 1.5 % in October 2023.
“Yet as an economy, it will continue to contract in 2023, it was better than -7.8 in 2022 but in 2023 it has forecasted -2.0 negative growth. It is an arduous task to attract FDI amidst economic contraction.
said the significant increase in projects is due to the high value of investments in the energy sector. Investments such as Adani Corporation, Sinopec, RM Parks with Shell, and further sectors such as ITC, BPO, Tourism, and Manufacturing are the sectors getting more investments.
Countries such as China, India, US, HK, UAE, France, Korea, Germany and Singapore are the destinations invested during 2023, he added.
Yet, in the YOY comparison, BOI registered and approved FDI Investment projects increased by 122% in 2023,” State Minister Amungama added.
India’s MCS Group has signed a $20 million deal for mineral processing, the largest Sri Lanka has received so far in 2023d.
“Japan is very interested in minerals, so is China,” he said. “The raw material we have is something we can really pitch to get new investments.”
Sri Lanka has untapped deposits of graphite, phosphate and other minerals to attract investors but policy frameworks are yet to be updated, creating a bottleneck for FDI
Over the last decade, China has invested about $3 billion in Sri Lanka, accounting for nearly a quarter of its FDI, while India made up about $1.3 billion. In the last two years, India took the lead, followed by the United Kingdom in 2022 and Netherlands in 2021.
Sri Lanka is also drawing up plans to identify new islands for investors to help resuscitate its $4 billion tourism industry.