Friday, 26 March 2021 12:56

New international consulting firm to promote Sri Lanka FDIs Featured

New consulting firm will be appointed by the Finance Ministry to promote Sri Lanka as an attractive destination for Foreign Direct Investment (FDI).

Cabinet approved a proposal by Prime Minister Mahinda Rajapaksa in his capacity as Finance Minister to take the necessary steps to obtain the services of a “leading international consulting firm” which contributes to the promotion of FDI, a statement released by the Government Information Department said.

Approval was given after Cabinet acknowledged the need to “implement a well-designed combination of centralised marketing and coordination strategies to demonstrate the attractiveness of Sri Lanka to investors”.

The move comes after Cabinet last month approved the appointment of a new high-level ‘Investment Management Committee’ to be headed by the Treasury Secretary, to evaluate and fast-track investment proposals received by the Government.

Sri Lanka has traditionally struggled to attract substantial amounts of FDI, with the situation becoming more challenging following the Easter attacks and COVID-19. In 2019 the country attracted $ 793 million, which dipped to $ 548 million last year largely due to virus impact, data released by the Central Bank showed.

ICRA Lanka, a subsidiary of Moody’s Investment Services, releasing their Economic Highlights report on Monday, predicted FDI could slip to as low as $ 200 million in 2021 as global recovery continues to impact international investment.

However, the Government has projected FDI for 2021 at $ 2 billion with the possibility of Port City lease sales bringing in an additional $ 1 billion.

Sri Lanka is strongly focused on attracting investment to bolster reserves and help meet an estimated $ 6 billion in outflows for this year.

Of this amount about $ 4.3 billion has been earmarked for debt repayments. Sri Lanka has to repay an average of $ 4 billion in debt for the next few years and requires better performance from investments and exports.

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