Sri Lanka’s Board of Investment targets $ 2 billion FDIs in 2025
Daily FT: Board of Investment (BOI) Chairman Arjuna Herath last week revealed that it targets to attract $ 2 billion in foreign direct investment (FDI) this year.
“Our aspiration is to secure $ 2 billion in FDI, with at least $ 1 billion confirmed within the first half of the year,” he stated at the Sri Lanka Economic Summit organised by The Ceylon Chamber.
Noting that the country’s economic growth target for 2025 is set at 5% with investment playing a key role, Herath outlined the investment strategy, stressing the need to mobilise both local and foreign investors to achieve this goal.
He listed out six key sectors including hospitality, logistics, renewable energy, technology, agriculture, and apparel and textiles to attract FDIs by building a creative and conducive environment for investments.
With Sri Lanka under an IMF-backed economic reform program, he said incentives is not a journey that the BOI is going to travel through.
“We do not need to rely on incentives. Instead, we must focus on creating an environment that naturally attracts investment. We cannot afford to wait for investors to come to us. We need to create conditions that make Sri Lanka an unavoidable choice for investment,” Herath stressed.
For Sri Lanka to become a compelling investment destination, Herath outlined three critical pillars — market access, supply chain stability, and skilled labour.
He called on local investors to increase their investments in lucrative industries, like pharmaceuticals, electrical and electronics, marine, agriculture, and renewable energy, through joint ventures and partnerships.
The BOI Chief said low national savings rates, currently at 18%, remain a major challenge, which limits domestic investment capacity. However, with public investment commitments in the upcoming Budget expected to rise to 7-8% of GDP, there is potential for unlocking more capital for infrastructure and industry growth.
OSL take:
Following the interest shown by foreign businesses/investors for opportunities in Sri Lanka, the Sri Lankan government is working on attracting more FDIs to the country as the country’s economy is on an expansion path after facing an unprecedented economic crisis in 2022. The country’s strategic positioning in the Indian Ocean, the many trade agreements as well as trade concessions enjoyed by Sri Lanka with many foreign countries and the target of becoming a hub in the South Asian region have all added to the country’s attraction as an emerging business/investment destination in the region. Sri Lankan authorities are committed to improving the ease of doing business environment in the country while also formulating incentive schemes for foreign businesses/investors to engage with Sri Lanka. Given that Sri Lanka possesses skilled labour at lower costs in the region, foreign businesses/investors could look at directly exploring opportunities in the country while also looking at setting up bases in Sri Lanka to engage with other countries in the region using the preferential treatment enjoyed by the country with many foreign countries. With all the positive developments, foreign businesses/investors could confidently explore the expanding business/investment opportunities in Sri Lanka while also looking at forming local collaborations for further expansion of operations.
| Article Code : | VBS/AT/20250206/Z_3 |