- Mass Media Minister & SLPP Economic Guru Bandula Gunawardana says Sri Lanka can’t get loans from any country after announcing bankruptcy: also says the Govt can’t now “print” money as per IMF conditions: however, Central Bank figures show that Rs.31 bn has been “printed” in the week ending 24 Feb’23 & Rs.33 bn in the week before.
- President Ranil Wickremesinghe declares public transport services for food, drink, coal, oil, fuel, etc, and maintenance of transport services by road, rail, air etc, as “essential services” with immediate effect.
- Stock market Investors take “wait-and-see” approach after official comments about IMF loan: IMF loan was originally expected in Dec’22, but now delayed until 2Q23: China calls for relief from World Bank, ADB & IMF which have been insulated from re-structuring so far as “senior creditors” under current resolution frameworks.
- World Bank’s IFC to provide USD 400 mn SWAP of 1 year to Commercial Bank, Nations Trust Bank & Sampath Bank to help facilitate imports of food, medicine & fertilizer that is traded in USD.
- SJB MP Mayantha Dissanayaka says he will resign from the post of Chairman of the Public Finance Committee.
- Energy Minister Kanchana Wijesekara says a decision has not been taken to suspend the National Fuel Pass QR system from 10th April: also says a decision on the system will be taken in consultation with Finance Ministry & other stakeholders in the next few months.
- Human Rights Commission calls for a report from the IGP on the police use of water cannons and tear gas on protesters in the area of Union Place that led to 28 persons sustaining injuries, including one fatality.
- Nivithigala Pradeshiya Sabha candidate of the Jathika Jana Balawegaya, Nimal Amarasiri (61) who was admitted to the National Hospital after sustaining an injury during their protest, passes away.
- Central Bank Trade Unions Alliance says it will join 40 other unions representing professionals, in a strike on 1st March, over the oppressive tax policy: this will be the first time the Central Bank staff have joined a strike after 2006.
- Court of Appeal issues an interim order preventing the implementation of the gazette issued by the Sports Minister, which outlines regulations pertaining to sports bodies, Including Sri Lanka Cricket.
Sri Lanka Original Narrative Summary: 28/02
Rainy conditions expected to enhance over the island
By: Isuru Parakrama
Colombo (LNW): Rainy condition is expected to enhance to some extent over the island, and showers will occur at times in Eastern, Uva and North-Central provinces and in Mullaitivu and Matale districts, the Department of Meteorology said in a statement today (28).
Fairly heavy showers above 75mm can be expected at some places in the Eastern and Uva provinces.
Showers or thundershowers will also occur at several places in Western and Sabaragamuwa provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts during the afternoon or night, the Dept noted, adding that fairly heavy showers above 50mm can be expected at some places in the above areas.
Several spells of showers may occur in the Northern Province.
Fairly strong gusty winds of about 40kmph can be expected over Northern, North-Central, Central and North-Western provinces and in Trincomalee and Hambantota districts.
General public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.
Marine Weather:
| Condition of Rain: |
| Showers will occur at times in the sea areas off the coast extending from Pottuvil to Kankasanthurai via Batticaloa and Trincomalee. Showers or thundershowers will occur at several places over the sea areas off the coast extending from Colombo to Matara via Galle during the evening or night. |
| Winds: |
| Winds will be north-easterly and wind speed will be (30-40) kmph. Wind speed may increase up to (50-55) kmph at times in the sea areas off the coast extending from Mannar to Colombo via Puttalam and sea areas off the coast extending from Matara to Pottuvil via Hambantota. |
| State of Sea: |
| The sea areas off the coast extending from Mannar to Colombo via Puttalam and sea areas off the coast extending from Matara to Pottuvil via Hambantota will be rough at times. Other sea areas around the island will be fairly rough. Temporarily strong gusty winds and very rough seas can be expected during thundershowers |
Special ‘Community Kitchen’ programme under the patronage of President’s Senior Advisor Sagala Ratnayake
By: Isuru Parakrama
Colombo (LNW): A special ‘Community Kitchen’ initiative aimed at providing a daily nutritious meal to 2,300 individuals including pregnant women and lactating mothers, people with non-communicable diseases, persons with disabilities, and those with low income was organised yesterday (27) at Hunupitiya Gangarama Temple in Colombo, under the patronage of President’s Senior Advisor Sagala Ratnayake.
The event focused five Grama Seva Divisions within the Slave Island Police Division, with Hunupitiya Gangarama Temple serving as the focal point.
During the event, President’s Senior Advisor Ratnayake participated in the serving of food to those who had gathered at the community kitchen.
Hunupitiya Gangarama Viharadhikari Ven. Dr. Kirinde Assaji Thera also graced the occasion.
SL receives $ 400 mn IFC boost
- World Bank’s private sector investment arm extends financing of up to $ 400 m through a cross-currency swap facility to three banks Commercial, Sampath and NTB to ensure essential imports – food, medicine, fertilisers
- International Finance Corporation working on further plans to support client banks with other long-term funding and advisory services
To support Sri Lanka amid an ongoing economic crisis, the International Finance Corporation (IFC) is providing a cross-currency swap facility to three of the country’s leading national banks that deal with over 30% of Sri Lanka’s remittances and exports.
It will support the private sector with critical financing, contributing to the country’s urgent need to stabilise the economy.
Sri Lanka has been facing its worst economic crisis in decades. The country’s output is estimated to have fallen by 9.2% in 2022 and drop a further 4.2% in 2023.
To support the country, the IFC facility will provide $ 400 million over one-year to Commercial Bank of Ceylon (CBC), Nations Trust Bank (NTB), and Sampath Bank to help facilitate imports of essential goods – food, medicine, fertilisers – of which are traded in dollars.
The facility will further support the banks financing of exports of goods and services for their clients while allowing them to make USD-denominated debt repayments.
IFC’s Financial Institutions Group for South Asia Portfolio Manager Joon Young Park said: “Sri Lanka’s economy continues to feel the severe dollars funding constraints. IFC’s cross-currency swap facility will provide critical forex liquidity, helping support the private sector and encouraging longer term funding flows to the market.”
“We expect this financing to boost confidence in the investor community, attract fresh capital inflows to support the Sri Lankan economy. We are also working on further plans to support our client banks with other long-term funding and advisory services in the future,” Park added.
This new swap facility follows the reactivation of trade finance lines with IFC partner banks– under the Global Trade Finance Program – in January 2023, which have been cautiously managing their risks in a challenging operating environment. With this facility, CBC and Sampath Bank will now be able to improve access to medium and long-term finance for its clients, helping local businesses sustain operations.
Commercial Bank of Ceylon Managing Director/Chief Executive Officer Sanath Manatunge said: “In our almost 20-year relationship, IFC has engaged extensively with us to help grow our operations, including new opportunities in trade, climate finance, small and medium enterprises, and was also instrumental in establishing our comprehensive women banking portfolio. This new facility will help us deploy our foreign currencies more efficiently, while lowering our foreign currency exposure, resulting in effective risk mitigation.”
Sampath Bank Managing Director Nanda Fernando said: “The facility provided by IFC comes at a juncture where the Sri Lankan economy is facing a challenging time. The transaction will enable Sampath Bank to better manage our foreign currency holding by borrowing at lower rates and manage our foreign currency exposure, while facilitating foreign currency lending to our customers across the whole economy.”
“The transaction will also renew the longstanding relationship with IFC, which was spread across many business areas such as trade, foreign exchange, and financial services. Sampath Bank is also grateful for the trust placed by IFC by continuing to engage as a major business partner in Sri Lanka and is confident that this will lead to a long and fruitful relationship,” added Fernando.
Nations Trust Bank Chief Executive Officer Hemantha Gunetilleke said: “IFC’s support through the cross-currency swap facility is timely, given the liquidity stress faced by the industry and the overall economy. This transaction will strengthen our hand in our efforts to increase foreign currency lending to our key client groups and thereby support economic revival across key industry sectors. “By arranging this facility, IFC is providing a few selected banks including Nations Trust Bank, an additional avenue to manage liquidity risks which we believe is a positive signal for Sri Lanka at this current juncture.”
“This transaction is also a testament to the long-standing relationship between IFC and Nations Trust Bank that spans over 20 years and we are thankful to IFC for its continued confidence in our Bank as a key banking sector partner in Sri Lanka,” added Gunetilleke.
This facility is aligned with IFC’s work in Sri Lanka over the past five decades. This includes IFC’s strong countercyclical role in Sri Lanka during the COVID-pandemic, where IFC invested over $ 830 million, providing much needed long-term capital and trade financing to help sustain businesses and preserve jobs.
Source: DailyFT
WB’s IFC to provide Sri Lanka with $400 mn financing
COLOMBO, Feb 27 (Reuters) – The International Finance Corporation (IFC), the World Bank’s investment arm, said it will provide Sri Lanka a $400 million cross-currency swap facility to help fund essential imports.
Three private banks, which together deal with over 30% of Sri Lanka’s remittances and exports, will receive the facility to fund essential imports, including medicine, food and fertiliser, the IFC said in a statement on Monday.
The funds will provide a much needed foreign exchange cushion for Sri Lanka, which is grappling with its worst financial crisis in over seven decades partly triggered by a severe shortage of dollars.
The island nation’s economy is estimated to have contracted by 9.2% in 2022 and is expected to shrink a further 4.2% in 2023, according to World Bank data.
“We expect this financing to boost confidence in the investor community, attract fresh capital inflows to support the Sri Lankan economy,” said Joon Young Park, IFC’s Portfolio Manager, Financial Institutions Group for South Asia.
IFC is also working on further plans to support client banks with other long-term funding and advisory services in the future, the statement added.
Sri Lanka signed a preliminary agreement with the International Monetary Fund (IMF) for a $2.9 billion bailout last September but has to put its debt on a sustainable repayment track before the funds can be disbursed.
Source: The Reuters
Power and Energy Minister responds to speculations on suspending QR Code System
By: Isuru Parakrama
Colombo (LNW): Power and Energy Minister Kanchana Wijesekara said no decision was taken to suspend the National Fuel Pass ‘QR Code’ system from April 10, as speculated by certain media reports.
In a tweet, Wijesekara emphasised that the NFP data will be analysed to gradually increase the quotas allocated, adding that decisions on the system will be taken in consultation with the Ministry of Finance and other stakeholders in the next few months.
62 including IUSF Convener Mudalige granted bail
By: Isuru Parakrama
Colombo (LNW): 62 persons including Convener of the Inter-University Students’ Federation (IUSF) Wasantha Mudalige who were arrested over the allegation of breaching the Education Ministry premises in Isurupaya have been granted bail.
This was when the suspects were produced before the Kaduwela Magistrate Court today (27).
The case will be taken up again on May 30.
Person injured during Police assault on NPP rally dies
By: Isuru Parakrama
Colombo (LNW): One of the demonstrators engaged in the protest march orginased by the National People’s Power (NPP) in Colombo yesterday (26) and got beaten by the Police has reportedly died succumbing to his injuries.
The deceased was a NPP contender for the Nivithigala Pradeshiya Sabha, said Janatha Vimukthi Peramuna (JVP) Chief Secretary Tilvyn Silva.
“About 28 people were hospitalised, and some of them discharged themselves. Some of them are still in care. The conditions of two of them were reported to be critical. Now we learn that one of them has lost his life. He was Nimal Amarasiri, a comrade who served as a contender in our Nivithigala Pradeshiya Sabha in Ratnapura District,” Silva said.
His death was confirmed as he had succumbed to the injuries sustained on his face from a tear gas bullet launched by the Police, according to sources.
A protest march was organised by the NPP yesterday demanding the holding of the Local Government Election, and the Police force was deployed to disperse the demonstrators in repressing fashion.
More powers for BOI, assures state minister despite new authority in the offing
In the wake of a high regulatory powered investment promotion agency (authority) to attract more foreign direct investment (FDI), the Board of Investment of Sri Lanka (BOI) will be granted more powers.
Investment Promotion State Minister Dilum Amunugama stated that BOI will be given more powers in future to further facilitate investors through speedy approvals for investment projects, thereby easing the ease of doing business.
He stressed that the new powers would see investors being given more efficient clearance processes for relevant projects, offering investors additional certainty and clarity.
The State Minister made these remarks during a discussion held with the BOI trade union representatives recently.
However his statement has no reference to ongoing process of rehauling of BOI operations under separate agency in accordance with proposal made by President Ranil Wickremasinghe in his capacity as the finance minister of the country,
Special committee appointed by President Ranil Wickremasinghe has already made a recommendation to set up this new agency by bringing the Board of Investment (BOI), the Export Development Board (EDB) and the Sri Lanka Export Credit Insurance Corporation (SLECIC) together into one platform.
National Enterprise Development Authority (NEDA) and other entities that support exports and investments will also come under the purview of the new agency.
The budget 2023 has allocated Rs 100 million to implement the investment and export sector reforms expeditiously.
These institutions connected to investment and exports will function under the proposed new agency following the re-enacting of 1978 Greater Colombo Economic Commission (GCEC) laws making it compatible with modern day needs.
The government has taken this decision after evaluating the performance of the these institutions during the recent past.
On average, it takes around 170 days to approve an investment project in Sri Lanka as these processes involve over 40 line agencies, it has been observed.
At present there are 73 project proposals that are still to get approval at around 10 different agencies. The delay in approving the projects is not auger well for investors.
“It is evident that the modus operandi in obtaining necessary approvals for investment projects causes significant hindrances to investors, which has a considerable bearing on the willingness and confidence of the investors to continue their business. In fact, some projects require approvals from 70 institutions,” Amunugama highlighted.
“In this context, attention has been drawn to leveraging a business model called the plug-and-play model where all clearances and other prerequisites will be in place before the project is awarded to any investor.
Here, the business firms are not required to focus on the basic requirements for setting up a business as everything is arranged by the relevant authority, which would be the BOI,” he explained.
“With the new powers in place, the BOI will be equipped to act more independently and effectively and thus, upbeat about wooing more investors to Sri Lana,” Amunugama added.
Govt. settles Rs.191bn outstanding amount to public project contractors
Sri Lankan government construction contractors numbering around 3000 are in an urgent need of funding for their survival have been relieved as they have received Rs. 191 billion outstanding payment for the work completed in public construction projects including buildings and infrastructure facilities.
The government has settled the majority of the arrears to the tune of Rs.191 billion to contractors and suppliers, after assuming power on August 31, last year, despite an 8 percent contraction in the economy during the year, Finance State Minister Ranjith Siyambalapitiya said.
As of August 31, last year, the government owed Rs.360 billion to various contractors and suppliers. As of January 31, 2023, the government has been able to settle 53 percent of these bills, amounting to Rs.191 billion.
The non payment of dues to contractors of public projects has resulted in widespread unemployment at present due to closing down of small and medium scale construction companies and if the delay in outstanding payments continues, it could affect the livelihoods of about 1.2 million people in the sector, Ministry of Housing and Development sources said.
Siyambalapitiya emphasized that it should be viewed as a positive development that the government was able to settle the majority of the arrears, despite the estimated 8 percent economic contraction in 2022.
According to Siyambalapitiya, the government still needs to settle Rs.169 billion in arrears. Rs.100 billion worth of outstanding bills are categorized as recurrent expenditure, while Rs.69 billion is categorized as capital expenditure.
He noted that several of these outstanding bills would be settled on a prioritized basis and it include Rs.18.9 billion worth of outstanding bills for health and medicine, Rs.19.3 billion for pensions and gratuity and Rs.12 billion for fertilizer and chemical supplies.
Upon the recommendation of a committee appointed by the Treasury secretary, the Cabinet of Ministers approved a proposal to settle the outstanding payments owed to various parties by issuing Treasury bonds.
The Ministry has already suspended the development project work and the repayment of dues to contractors but it is making arrangements to pay a sizable sum of the total amount to them by the in accordance with cash availability, a senior Treasury official disclosed.
It is also considering releasing at least Rs. 500 million from the outstanding payments to the Provincial and District level projects, to provide some relief to small- and medium-scale construction companies.
The Ministry is to formally request for funding from the Central Bank by raising the relevant cash through Treasury bills and Treasury bonds to meet any urgent financial requirements, he said.
Some of these contractors have obtained loans by mortgaging their house and property to carry out the construction work and they are now in danger of losing their homes and assets to banks, several contractors complained.
In addition, the fuel shortages and power outages have affected the efficient production process of the industry, affecting all the stakeholders, from small and medium enterprises to the self-employed.