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Government to attract US$ 4 billion in FDI in 2024 rolling out investment law

By: Staff Writer

April 25, Colombo (LNW): Getting into a resilient mode after navigating severe economic turbulence, Sri Lanka is doubling down on its efforts to attract foreign direct investment and investors by rolling out a landmark investment law designed “to eliminate the existing complexities.”

The island nation’s State Minister of Investment Promotion Dilum Amunugama said the Sri Lankan government expects to attract 4 billion to 4.5 billion U.S. dollars in foreign investments in 2024.

The state minister said in 2023 Sri Lanka attracted 1.8 billion dollars worth of foreign investments, although the target was only 1.5 billion dollars.He said that the government has set an investment target of 4.5 billion dollars in 2024.

Amunugama said foreign investments have increased significantly after the country entered into an agreement with the International Monetary Fund (IMF).

He said that due to the political and economic instability in Sri Lanka, foreign investment declined in 2022 and the first half of 2023.

The new investment law, the minister said, will ensure the rights of foreign investors to make Sri Lanka an investment-friendly destination.

The game-changing law will feature several incentives for foreign investors. Also on the cards is an initiative to give free land ownership rights to foreign investors, he said.

Part of the new measures is the setting up of an Investor Facilitation Centre to provide comprehensive facilities, including addressing investor issues.

It will operate in close coordination with various government agencies. The centre would serve as a platform for investors to swiftly address their current challenges. Specific investment zones with the potential to attract investments to Sri Lanka have also been identified, according to the minister.

Going forward, Sri Lanka expects to accelerate the recovery process of its $89 billion economy (2021) by focusing primarily on its agriculture sector, followed by tourism and investment sectors, said the minister.

On debt restructuring discussions with the IMF, the minister said he is optimistic of resolving all pending issues although “we cannot meet all their (IMF) conditions in the current situation.”

The debt restructuring is crucial for Sri Lanka to reach a 2.3 per cent primary budget surplus by 2025, the key fiscal target set by the IMF.

According to data from the finance ministry, Sri Lanka’s external debt was $36.09 billion at the end of March this year. Once the debt restructuring is completed, Sri Lanka hopes to reduce its overall debt by $16.9 billion.

The country owed about $10 billion to multilateral banks like the World Bank and the Asian Development Bank and $11.33 billion to bilateral creditors, including the Paris Club nations and China, Japan, and India. Commercial loans, comprising of sovereign bonds and other time-bound loans, accounted for $14.75 billion.

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