The World Food Programme (WFP) says 66 percent of Sri Lankans surveyed have been found to have reduced the number of meals eaten daily.The WFP and the Government conducted a joint rapid food security assessment in April.

It surveyed the poorest households in 17 districts and found that 86 percent are using coping mechanisms such as purchasing cheaper, less nutritious food (95 percent); limiting portion sizes (83 percent); and reducing the number of meals eaten daily (66 percent).

Sri Lanka is facing its worst economic crisis since its independence in 1948. The population is struggling to meet their daily food and nutrition needs in the face of shortages and higher food prices for food and fuel.

Employment and household incomes have been battered by COVID and this latest economic crisis, directly affecting people’s ability to afford food and other essential items.

Food inflation in Sri Lanka is 57 percent, driven by rising global food prices, dwindling foreign reserves, unfavourable exchange rates and low domestic food production.

The United Nations is appealing for US$ 47.2 million to meet the most urgent humanitarian needs of 1.7 million people until September. Of this, USD10 million is for WFP activities.

The Government is providing cash transfers to 3.3 million people through its social safety net programme with support from international financial institutions. However, several vital national nutritional support programmes have stalled due to lack of funds.

Sri Lanka’s average monthly household income was estimated at Rs. 76,414 prior to the country’s economy fell deep into a recession and incomes deteriorated in the two years of the pandemic in 2020 and 2021, according to Department of Census and Statistics (DCS) data.

While the average household income was over Rs.75, 000 and appeared attractive, this reflects the income for an average household comprising 3.7 people and there are also vast disparities between the three segments—urban, rural and estate. 

The latest Household Income and Expenditure Survey 2019 results published by the Department of Census and Statistics recently showed that while the average income of an urban household was at Rs.116,670, the rural family generated an average of Rs.69,517 which has become even weaker for an estate sector family at Rs.46,865. 

While the results reflect the average income level when the country entered the pandemic, during the two years of the pandemic the country saw its incomes falling amid hyperinflation resulting in families losing 40 percent of the value of their nominal incomes within just one year through May 2022, based on the official consumer price indices. 

The survey also found out that the poorest 20 percent of the households in Sri Lanka were generating only Rs.17,572 while the poorest 40 percent of the households generating Rs.26,931. 

However, the richest 20 percent of the households in Sri Lanka on average earn Rs.196,289 per  month, which may have grown in the last two years in nominal terms, although their purchasing power fell sharply in the last six months due to double-digit inflation, which accelerated into runaway prices from March onwards. 

Meanwhile, the middle 60 percent of the households generated an average monthly income of Rs.56, 079 for a family of 3.7 persons. 

This reflects how badly the living standards of 80 percent of the households in Sri Lanka have been affected while the bottom 40 percent may have been plunged into dire poverty due to inflation which acts as an insidious tax on people’s incomes.

 U.S. Launches Training to Strengthen Sri Lanka’s Public Sector Accounting and Auditing Capabilities’’

The U.S. Government, through its development agency, the U.S. Agency for International Development (USAID), is partnering with the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and the Association of Public Finance Accountants of Sri Lanka (APFASL) to strengthen Sri Lanka’s accounting and auditing sectors.

This partnership will train approximately 600 public sector accountants and audit professionals, and 1,200 officers on IT applications and other platforms that support strategic decision making.

Speaking at the official launch of the training program, U.S. Ambassador to Sri Lanka, Julie Chung said, “The U.S. is excited to provide public sector professionals with the necessary tools to further strengthen their knowledge on compliance requirements and contribute towards greater accountability in the public sector.

 As one of Sri Lanka’s longstanding development partners, our vision is to help the country to emerge from crises stronger than before, she added.

The training will focus on Sri Lanka’s Public Sector Accounting Standards (SLPSAS), which provide a framework for the preparation and presentation of financial statements in compliance with international best practices for quality financial accounting and reporting.

The training, conducted in all nine provinces, will strengthen the capacity of public sector accounting and auditing professionals on the recent developments and applications of SLPSAS 11-20, enhancing public sector financial management functions and reporting as well as improving financial analysis, planning, and management in the public sector.

“Strong public financial management is very critical for Sri Lanka to achieve its long-term goals. Therefore, APFASL in its capacity as the public sector wing of CA Sri Lanka, has been playing a critical role in strengthening public financial management practices in line with international best practices.

 The collaboration with USAID comes at a very opportune time as we continue to strive to enhance public sector accounting and auditing professionals so that they continue to remain relevant.

This partnership with USAID is also a testament to the important work both CA Sri Lanka and APFASL have been doing to enhance the sector”, said Mr. Sanjaya Bandara, President of CA Sri Lanka.

Additionally, the training program will strengthen public sector finance professionals’ effective use of IT systems to support strategic decision-making across all provinces.

As the facilitator of the training, the APFASL will support the implementation of the National Policy on Fiscal Management and enhance financial management systems in public institutions, universities, and local governments.

“Since its inception, APFSL has been at the forefront in developing the professional skills and expertise of the public sector accountants and auditors, and chief among the numerous groundbreaking initiatives the association launched was to publish the Sri Lanka Public Sector Accounting Standards., said Mr. V. Kanagasabapathy, President of APFASL.

 The Embassy of the United States of America announced today that the U.S. International Development Finance Corporation (DFC) Board of Directors has approved $120 million in new loans to grow and support the Sri Lankan economy.

“For seventy years, the United States has provided foreign assistance, loans, and trade opportunities to help grow the Sri Lankan economy and support the Sri Lankan people,” said U.S. Ambassador to Sri Lanka Julie Chung. 

She said “Today’s announcement is good news for the private sector, as the DFC’s $120 million in new investments will reach small and medium-sized businesses and help to provide equity, jobs, and futures.”

The projects announced today include a $100 million direct loan to the Commercial Bank of Ceylon, Sri Lanka’s leading commercial private bank, to expand lending to micro-, small-, and medium-sized enterprises (MSMEs) and address the credit gap for women-owned businesses, which represent 25% of MSMEs in Sri Lanka.

In addition, DFC announced a $15 million loan to BPPL Holdings PLC, a polyester yarn manufacturer incorporating recycled plastic materials.  The loan will support increased production and strengthen Sri Lanka’s recycling infrastructure in support of efforts to reduce plastic waste in Sri Lanka.

Also announced today was a $5 million loan to MA’s Tropical Food Processing (Private) Limited, a sustainable food company, to finance its expansion and grow its supplier network.  This effort will strengthen Fair Trade practices in Sri Lanka and create new jobs, with an emphasis on increasing women’s employment.

These new loans build on DFC’s existing por.”tfolio in Sri Lanka of nearly $300 million in funding for the MSME sector over the past two years.“The diverse set of transactions announced today will make real impact across a range of sectors and development challenges,” said DFC CEO Scott Nathan. “These transactions showcase how DFC strategically catalyzes private capital where it matters most