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Tuesday April 23rd, 2024

Sri Lanka micro, small, medium enterprises resilient, but recovery lags

ECONOMYNEXT – Sri Lanka’s micro and small medium enterprises have shown resilience between 2018 to 2023, amidst economic shocks, however sector recovery levels lag behind those of 2018, a Department of Census and Statistics survey found.

“A trend is observed in the medium sector, with figures reaching 62,000 in 2021 and 75,000 in 2022,” the report said, citing the improvements in the number of medium enterprises within 2022. “However, despite this growth, it remains insufficient to match the levels seen in 2018,” it said.

The report said that during the first year of the global pandemic, in 2020, there was a 41 percent recorded decline in the number of small businesses and 50 percent decline in medium sized businesses, citing shocks to the Sri Lankan economy as a consequence of both the pandemic and Easter Sunday Attacks of 2019.

“The number of small businesses decreased from 82,100 in 2019 to 48,400 in 2020, while the number of medium-sized businesses declined by 50 percent, from 12,200 in 2019 to 6,100 in 2020.”

It added that there was a subsequent increase in the number of small-scale businesses in 2021, as the recorded 48,000 small scale businesses of 2020 climbed to 58,000 in 2021, and further grew to 80,000 by 2022.

However, the recorded gradual increase in the last 5 years still does not surpass the number of businesses in the sector in 2018.

The survey conducted on MSMEs from March to June of 2023 assessed the impact of the economic crisis following the Covid-19 pandemic on MSMEs in Sri Lanka.

Those considered within the micro category were individuals engaged in three wheel driving, owners of small grocery shops, proprietors of barber shops and individuals doing construction work on contract basis.

Nearly 80 percent of active businesses in 2018 remained operational at the time of the survey in May 2023. However, a significant portion, 20.2 percent, had either temporarily or permanently closed, underscoring the impact of the crisis on business sustainability.

The report also found that while micro-scale businesses experienced modest growth in employment levels, small and medium-sized enterprises faced significant declines in workforce numbers, reflecting the challenges of sustaining operations amidst economic uncertainty.

Despite marginal improvements in employment figures in the years following 2020, the sector has yet to fully recover to pre-crisis levels. (Colombo/Feb21/2024)

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Iran President to open Sri Lanka $514mn irrigation, hydro power project

MULTIPURPOSE: Uma Oya multipurpose development project is the largest since the end of the Mahaweli projects.

ECONOMYNEXT – Iran President Seyyed Ebrahim Raisi will inaugurate an irrigation and hydropower project that was designed and built by Iranian engineering firm and was also initially financed before international sanctions hit the project.

The Uma Oya (River) project will irrigate 4,500 acres of new agricultural land, generate 290 Gigawatt hours of electricity and also provide drinking water, a government statement said.

Sri Lanka had awarded an engineering, procurement, construction (EPC) to Iran’s FARAB engineering group to design and construct the 514 million dollar multipurpose project in 2010.

The project was funded until 2013 with a million US dollar credit from the Export Development Bank of Iran but international sanctions prevented the country from continuing financing, a government statement said.

The project continued with funding from Sri Lanka. Sri Lanka had since repaid 19.3 million dollars of the credit and 35.2 million remains outstanding.

The Uma Oya project has a 120MW of hydro power generators, which can generate 290 Giga Watt hours of energy.

Each year 145 million cubic metres of water will be taken from Uma Oya to the Kirindi Oya river valley after generating electricity in an underground power station.

It will irrigate 1,500 hectares of existing agricultural and 4,500 hectares of new land in the Moneragala district, where crops can be cultivated in both the Maha and Yala seasons.

About 39 million cubic meters of water will be used for drinking and industrial purposes.

Two reservoirs built at Dyraaba and Puhulpola in Uma Oya basin is connected by a 3.98 kilometre conveyance tunnel and water is taken through a 15.2 kilomtre headrace tunnel to an underground power station. A tailrace tunnel takes water from the power station to the Kirindi Oya basin.

The project was originally expected to be completed in 2015, but due to financing delays and later water leaking into the headrace tunnel and the Covid pandemic had delayed it. The project completion date was extended to March 31, 2024 and defect liability date to March 31, 2025.

(Colombo/April23/2024 – CORRECTED Iran President Seyyed Ebrahim Raisi will inaugurate an irrigation and hydropower project that was designed and built by Iranian engineering firm.)

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Sri Lanka state oligopoly allowed to import some black gram

ECONOMYNEXT – Sri Lanka has allowed the import of some black gram, by three state agencies, according to a gazette notice issued under the hand of President Ranil Wickremesinghe.

Import licenses will be given for 2,000 metric tonnes of the seed classified under HS Code 7312.31.22 and 29.

Sri Lanka State Trading Corporation, National Food Promotion Board and Sri Lanka Hadabima Authority is to be given import licenses.

Traders have resorted to smuggling some types of black gram (ulundu) mis classified as chick peas, to get over high taxes and import restrictions.

Tamil legislators have also protested the import controls, which they go into several key ethnic foods they consume. (Colombo/Apr23/2024)

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Sri Lanka Foreign Ministry consular division shifted to Battaramulla

ECONOMYNEXT – Sri Lanka’s Foreign Ministry said it consular division would be shifted to the Suhurupaya building in Subuthipura, Battaramulla from May 02, 2024.

Document authentication services provided by the Consular Affairs Division in Colombo will be suspended on 29 and 30 April 2024 held transfer the Electronic Document Authentication System (e-DAS) to the new premises at Suhurupaya.

Urgent applications for authentication to the Consular Division in Colombo, or any Regional Consular Offices by 4.15 pm on 26 April 2024, the Foreign Ministry said.

Regional Consular Offices in Jaffna, Trincomalee, Kurunegala, Kandy and Matara will remain open to accept applications.

Authenticated documents will be delivered to the applicants only on Thursday, 02 May 2024.

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