By: Staff Writer
July 13, Colombo (LNW): Sri Lanka is preparing to launch its most ambitious governance reform programme in years, with a far-reaching action plan that promises to overhaul public procurement, tighten oversight of state institutions and pursue illicit wealth as the country attempts to restore investor confidence and meet international governance commitments.
Senior Finance Ministry officials noted that the 2026 Governance Action Plan (GAP), initially developed to satisfy structural benchmarks under the International Monetary Fund’s Extended Fund Facility (EFF), has evolved into a comprehensive roadmap aimed at addressing long-standing weaknesses in public administration and financial governance.
At the centre of the reforms is a new Public Procurement Bill designed to modernise the country’s procurement framework in line with international standards. The legislation was drafted by April this year and submitted for gazetting in May, with implementation targeted for August.
One of the most significant transparency provisions requires the publication every six months of all government procurement contracts exceeding Rs. 1 billion. The legislation also proposes detailed disclosure of corporate tax exemptions, a move expected to bring greater scrutiny to fiscal concessions that have long attracted criticism over accountability.
Officials say a phased rollout of an electronic government procurement platform will further reduce administrative bottlenecks while increasing competition among suppliers by limiting opportunities for discretionary decision-making.
The Governance Action Plan also seeks to reshape the management of state-owned commercial enterprises. A Public Commercial Business Management Bill, scheduled for Cabinet review in April, proposes establishing an independent holding company by August to supervise and restructure commercial state entities under a unified governance framework.
Meanwhile, reforms are extending to Sri Lanka’s largest retirement fund. A governance review of the Employees’ Provident Fund has already been completed, with a policy paper containing structural recommendations expected to reach Cabinet in September.
The anti-corruption drive is backed by stronger enforcement powers. Planned amendments to the National Audit Act would permit direct fines on public officials who fail to comply with financial management and reporting obligations.
Authorities are also preparing an Asset Recovery Law together with a Proceeds of Crime Act to identify, freeze and recover assets believed to have been acquired through corruption or other illicit activities.
Another major reform is the creation of a public register identifying the beneficial owners of companies. Officials believe the registry will help eliminate corporate anonymity, reduce opportunities for tax evasion and strengthen financial transparency.
Finance Ministry sources say these initiatives represent a shift from compliance-driven reforms towards institutional transformation. Whether the ambitious legislative timetable can be achieved and whether enforcement proves stronger than in previous reform efforts—will ultimately determine whether Sri Lanka succeeds in rebuilding public trust and convincing investors that governance standards have fundamentally improved.