ECONOMYNEXT – Sri Lanka will receive around 1 billion US dollars of foreign direct investment in 2021 despite the Covid-19 pandemic and other disruptions, Board of Investment (BOI) chairman Sanajaya Mohottala said.
Foreign Direct Investment has been on a falling trend since its record high of 1.8 billion US dollars in 2018 thanks to the sale of Hambantota port to a Chinese firm.
FDI in 2019 fell to 793 million US dollars and last year it recorded 548 million US dollars amid pandemic-hit disruptions.
The island nation has seen 398 million US dollars of FDI in the first six months of this year, central bank data showed.
“We are looking close to 1 billion US dollars,” Sanajaya Mohottala told Economy Next on the sideline of a pre-budget forum on October 21
“Usually in the first six months of the year we get around 40-45 percent of the total investment.
“FDI is not a panacea. We also need to see the capital formation. The capital formation in the first six months of this year is 770 million US dollars and out of this FDI is around 400 million US dollars. The capital formation in the last year was 1.4 billion US dollars.”
The BOI has approved 1.4 billion US dollar worth projects so far this year and over 2 billion US dollars worth projects are in the pipeline, he said.
Policy consistency, difficulties in opening and doing business and exchange rate risks have been the key concerns of foreign investors.
The government interventions with sudden change in policies including violating property rights with expropriation have dented investor sentiment on Sri Lanka despite a 30-year warn ending in 2009.
Mohottala sees over 1 billion US dollars FDI in 2022 along with domestic capital formation of over 2 billion US dollars. (Colombo/Oct25/2021)