As Sri Lanka navigates its post-crisis recovery, foreign direct investment (FDI) has emerged as a cornerstone of its economic revival strategy. The government, alongside institutions like the Board of Investment (BOI), has set ambitious targets to attract substantial foreign capital. However, a closer examination of the actual figures as of August 2025 reveals discrepancies and raises questions about the feasibility of meeting the stipulated goals.
FDI Targets vs. Reality
The International Monetary Fund (IMF) has recommended a minimum FDI target of $1 billion for Sri Lanka in 2025. In response, the BOI has set an even more ambitious goal of $1.8 billion. However, as of late July 2025, the BOI had approved 63 projects with a combined value of $776 million, including $500 million in FDI and $276 million in local investments. This indicates that while the number of approved projects is on track, the actual FDI inflow is significantly below the target.
Major Investment Projects
Several high-profile projects have been approved, signaling potential growth in FDI:
CEAT OHT Lanka: A $171 million investment in the manufacturing and export sector, highlighting confidence in Sri Lanka’s industrial capabilities.
Sinopec Refinery: A $3.7 billion oil refinery project in Hambantota, aimed at reducing Sri Lanka’s reliance on imported oil.
These projects underscore the potential for significant FDI inflows. However, the overall figures suggest that such large-scale investments are not yet widespread.
Discrepancies in Reporting
Government officials, including BOI Chairman Arjuna Herath, have made optimistic statements about surpassing the $1 billion FDI target. However, the actual figures paint a more cautious picture. The BOI’s approval of 63 projects worth $776 million by July 2025 falls short of the ambitious targets set earlier in the year. This gap between projections and reality raises concerns about the accuracy of public statements and the effectiveness of current investment strategies.
While Sri Lanka has made strides in attracting foreign investment, the actual figures as of August 2025 suggest that the country is yet to meet its ambitious FDI targets. The approved projects, though promising, are not sufficient to reach the $1 billion or $1.8 billion goals set by the IMF and the BOI. This disparity calls for a reassessment of strategies to enhance investor confidence and attract the necessary capital to drive economic recovery.
