Sri Lanka’s slump in FDIs continues

Despite ambitious targets set by the International Monetary Fund (IMF), Sri Lanka’s tumble in foreign direct investment continues as the Finance Ministry reported a decline in the net foreign investment inflows during the first four months in 2023. The government is set to reform Sri Lanka’s restrictive and cumbersome investment regime, by fully implementing a national single window under one stop shop.

The National Single Window System is a must and finding the right mix of techniques and organisation to do the investment promotion and official approval process is key, officials at the State Ministry of Investment Promotion emphasised. The Board of Investment (BOI) targets $2 billion in Foreign Direct Investments (FDI) in 2023 despite the country still facing an unprecedented economic crisis, State Minister Dilum

Amunugama said.

Sri Lanka aimed at a $1 billion FDI target for last year and had achieved only $783 million by the end of 2022, Finance Ministry data showed.

The BOI has failed to attract foreign investment of over $ 1 billion during several years amidst the economic setback, policy uncertainty and political instability along with the removal of tax concessions including tax holidays, ministry report revealed.

Since the establishment of this export promotion entity approximately 44 years ago, the institution has managed to attract only around $ 30 billion in FDI, it added.

It has been observed that the average annual FDI inflow has been merely $ 500700 million and there were no investments coming under the new enhanced capitalbased package of the BOI in the recent past.