Sri Lanka’s post-disaster recovery from Cyclone Ditwah is losing momentum, with tens of thousands still unable to return home despite an expanded humanitarian response, according to the United Nations Office for the Coordination of Humanitarian Affairs.

More than 149,000 people remain displaced weeks after the cyclone, highlighting a shift from emergency response to a more complex, prolonged recovery phase. While initial displacement figures peaked at over 233,000, the decline has been uneven, with many affected families now living in temporary or informal arrangements rather than organised shelters.

Humanitarian efforts under the national priority plan have reached over 291,000 individuals across all districts, supported by dozens of aid organisations. However, the nature of displacement is evolving. Instead of large-scale camps, families are increasingly scattered staying with relatives or in makeshift housing making assistance delivery more difficult and less visible.

Shelter remains a critical concern. Although the number of official safety centres has dropped significantly, hundreds of families still depend on them, particularly in vulnerable districts such as Badulla, Nuwara Eliya, and Kegalle. Authorities are now transitioning some communities to tent-based accommodation, a move that underscores the absence of long-term housing solutions.

 A key bottleneck is the slow pace of resettlement approvals. The National Building and Research Institute is struggling to keep up with demand for hazard assessments required before families can safely return or rebuild. Without these clearances, reconstruction remains stalled, prolonging uncertainty for affected communities.

Meanwhile, the Government has attempted to streamline compensation through updated guidelines, consolidating multiple relief schemes. Financial assistance has also been extended to the agricultural sector, with significant grants allocated for replanting key crops such as tea, rubber, and coconut.

Despite these efforts, funding constraints continue to hamper recovery. A substantial gap remains in the overall humanitarian budget, leaving critical sectors like health, nutrition, and early recovery under-resourced.

The disasters scale affecting over 2.2 million people and causing widespread destruction—means recovery will likely stretch over months, if not years. As the immediate crisis fades, the challenge now lies in sustaining support and ensuring that displaced populations are not left behind in a slow and uneven rebuilding process.

The United States is signalling a strategic shift in its economic relationship with Sri Lanka, calling for a more balanced and reciprocal trade framework as the island emerges from its recent financial crisis. The message, delivered at a CEO forum hosted by the American Chamber of Commerce in Sri Lanka, reflects growing optimism but also rising expectations from US stakeholders.

Speaking at the event, Zachary Bailey highlighted a notable turnaround in investor sentiment. According to him, American businesses operating in Sri Lanka are significantly more confident than in previous years, describing the current outlook as one of “cautious optimism.”

However, this improved sentiment comes with clear conditions. The United States is now encouraging Sri Lanka to move beyond traditional trade dynamics, where developing economies benefited from asymmetric access to developed markets. Instead, Washington is advocating for a more reciprocal model one that includes increased imports of US goods and stronger bilateral investment flows.

 The imbalance is evident in current trade figures. The US remains Sri Lanka’s largest export destination, accounting for approximately $3 billion of total exports in 2025. Yet, US exports to Sri Lanka and investment inflows remain comparatively limited, with American foreign direct investment representing only a small fraction of total FDI.

US officials believe this gap presents an opportunity. Expanding imports of American products—ranging from agricultural goods to industrial machinery and pharmaceuticals—could help rebalance trade while strengthening economic ties.

At the same time, Sri Lankan companies are being encouraged to look outward. The US is actively promoting inbound investment from Sri Lanka, signalling openness to deeper corporate linkages and cross-border expansion.

Despite the positive tone, structural challenges remain a key concern. US investors continue to prioritise regulatory stability, transparent tax policies, efficient customs procedures, and overall ease of doing business. Without progress in these areas, Sri Lanka risks losing momentum in attracting high-quality foreign investment.

Long-term predictability is especially critical. Investors are increasingly focused on whether policies can remain consistent over five to ten years an essential requirement for large-scale capital commitments.

The message from Washington is clear: while Sri Lanka’s recovery has reopened doors, the next phase will depend on whether it can align with evolving global trade expectations and deliver a more predictable, investor-friendly environment.

Sri Lanka’s energy sector is grappling with the fallout of substandard coal imports, as confirmed by the National Audit Department and acknowledged by Anura Kumara Dissanayake in Parliament.

The President emphasized that the core issue lies not in the tender process but in suppliers failing to meet required coal quality standards. However, the audit paints a broader picture one of systemic weaknesses spanning procurement, oversight, and verification processes.

At the center of the crisis is the Lakvijaya Power Plant, a facility responsible for 30–40% of Sri Lanka’s electricity generation. The plant requires approximately 2.25 million metric tons of coal annually, making consistent quality essential for stable output.

Instead, poor-quality coal has led to reduced generation capacity. While the plant is designed to produce around 900 MW, actual output has fallen to roughly 810 MW after internal consumption. Daily fluctuations further highlight the instability, with some units producing significantly below expected levels.

This shortfall has forced authorities to turn to alternative power sources, including diesel generation, significantly increasing operational costs. The President warned that while these costs will be recovered from suppliers where possible, the broader financial burden could reach Rs. 32 billion over a three-month period.

The audit’s estimated Rs. 2.24 billion loss reflects direct inefficiencies from increased coal consumption. However, the wider economic impact including reliance on costlier energy sources has pushed total coal-related losses to around Rs. 7 billion.

To mitigate the crisis, the Government has withheld payments and imposed steep penalties on suppliers. In one instance, the price of coal was reduced from $98 per tonne to $34 under penalty provisions. Legal action remains on the table for non-compliant companies.

Despite these measures, the situation underscores deeper structural issues. Recurring audit findings from 2016 and 2022 had already warned of weaknesses in procurement and quality control—warnings that appear to have gone largely unaddressed.

As Sri Lanka navigates ongoing energy challenges, the coal procurement crisis serves as a stark reminder: without strict oversight and accountability, failures in supply chains can quickly escalate into national-level economic and energy disruptions.

Sri Lanka’s banking sector is facing a critical credibility test following the exposure of a Rs. 13.2 billion internal fraud at National Development Bank PLC, with the Central Bank of Sri Lanka stepping in to contain potential fallout.

While regulators insist the bank remains stable, the scale and duration of the fraud estimated to have unfolded over nearly 18 months has raised serious concerns about governance failures and systemic oversight weaknesses.

The CBSL has moved quickly to reassure depositors, confirming that capital adequacy and liquidity ratios remain above required thresholds and that customer deposits are unaffected. However, confidence in internal controls has been shaken, particularly after revelations that suspicious transaction patterns linked to CEFT (Common Electronic Fund Transfer) accounts—were visible as early as mid-2024.

Financial disclosures show a dramatic surge in receivables tied to CEFT transactions, rising from Rs. 3.1 billion in 2024 to over Rs. 12 billion in 2025. Analysts argue this spike should have triggered immediate scrutiny from management, internal audit teams, and board-level risk committees.

Instead, the alleged fraud continued largely undetected. Investigations suggest that funds were siphoned through repeated transactions, often executed during weekend windows when oversight was weaker. In one instance, more than 70 transactions were reportedly carried out just days before the fraud was exposed.

The financial impact, though significant, remains manageable in proportion to the bank’s nearly Rs. 1 trillion asset base. Net losses are estimated at around Rs. 7 billion after provisioning, with capital adequacy expected to decline but remain above regulatory minimums.

Still, the reputational damage may prove more difficult to contain. Investor confidence has been rattled, and governance activists have pointed to clear lapses in monitoring, calling it a “systemic breakdown” across multiple layers of control.

The CBSL’s directive to suspend dividend payments preserving roughly Rs. 2.7 billion in capital signals a cautious regulatory stance. At the same time, authorities have indicated readiness to provide emergency liquidity support if conditions worsen.

Attention is now turning to accountability at the highest levels. The Board of Directors faces mounting pressure to explain how early warning signs were missed and whether leadership failures contributed to the breach.

With law enforcement, including the CID, now involved, the episode has evolved beyond an internal lapse into a broader test of Sri Lanka’s financial governance framework one that could shape regulatory intervention strategies in the months ahead.

Economic growth in developing Asia and the Pacific is expected to slow this year as the ongoing conflict in the Middle East disrupts trade and energy markets, the Asian Development Bank (ADB) said on Friday.

ADB President Masato Kanda described the situation as a “formidable test” for the region’s economic momentum, noting that the conflict has added fresh uncertainty to an already fragile global environment.

According to the ADB’s latest Asia Development Outlook, regional growth could ease to 4.7% in 2026, down from 5.4% last year, while inflation may rise to 5.6% from 3.0% in 2025 if hostilities persist through the third quarter.

The report also warns that if the conflict continues for a full year, the region could lose around 1.3 percentage points of growth across 2026 and 2027.

Developing Asia and the Pacific includes 43 economies, ranging from China and India to smaller nations such as Georgia and Samoa, but excludes advanced economies like Australia, Japan, New Zealand, Singapore, and South Korea.

These projections differ from the ADB’s baseline scenario finalised on March 10, which assumed a shorter, one-month conflict. Under that outlook, growth was expected to moderate only slightly to 5.1% in 2026 and 2027, with inflation rising to 3.6% this year before easing to 3.4% in 2027.

ADB Chief Economist Albert Park noted that prolonged disruptions to energy supplies remain a key risk. “The ceasefire appears fragile, and markets suggest a low probability that it will hold,” he said, warning that continued instability could further impact growth.

The conflict, which has significantly disrupted global energy flows, has driven up oil and gas prices and intensified inflationary pressures worldwide. The Strait of Hormuz—through which about one-fifth of global oil trade typically passes—has been particularly affected.

The ADB stressed that policymakers should focus on containing inflation and financial stress in the short term, while accelerating energy diversification and improving efficiency to reduce long-term vulnerabilities.

The Ministry of Education (MOE) has announced that the second phase of the first school term for government and government-approved schools concludes today (10).

In line with the Sinhala and Tamil New Year, schools will observe a holiday period from April 10 to April 19.

The second school term is scheduled to commence on April 20 and will continue until July 24.

A no-confidence motion against Minister of Energy Kumara Jayakodi is scheduled to be debated in Parliament today.

The motion, submitted by the Opposition, centres on allegations related to the procurement and quality of coal imports and their impact on power generation. Opposition MPs claim that issues in coal procurement and supply contributed to disruptions in electricity generation, prompting the move against the Minister.

Despite the challenge, the government is expected to defeat the motion, given its parliamentary majority.

A recent audit report highlighting alleged irregularities in coal procurement is also likely to come under discussion during the debate. In addition, Opposition members are expected to raise the Minister’s indictment in court over a corruption case linked to his tenure as a state official.

The motion was handed over to the Speaker last month, with the Committee on Parliamentary Business subsequently scheduling the debate for today. The outcome of the vote is expected later in the day following the conclusion of proceedings.

Passengers travelling ahead of the Sinhala and Tamil New Year holidays are advised that additional bus services have been deployed from the Makumbura Multimodal Centre (MMC) in Kottawa.

Transport services will operate daily from 5.00 a.m. to 10.00 p.m. from April 08 to 13 to accommodate increased passenger demand.

Commuters can obtain bus schedule information by contacting 0112-034474 prior to arriving at the terminal.

NTC Makumbura Bus Terminal Assistant Manager D.M. Wettasinghe urged passengers to arrive early to avoid inconvenience, noting that night services may experience delays depending on the return of buses from Colombo.

The special transport operations are being jointly carried out by the Sri Lanka Transport Board (SLTB), the National Transport Commission (NTC), and the Provincial Road Passenger Transport Authority.

Showers or thundershowers will occur at several places in Western, Sabaragamuwa, Southern and Uva provinces and in Kandy and Nuwara-Eliya districts after 2.00 p.m.

Mainly dry weather will prevail over the other parts of the island.

Misty conditions can be expected at some places in Central, Sabaragamuwa and Uva provinces and in Ampara district during the early hours of the morning.

The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

On the apparent northward relative motion of the sun, it is going to be directly over the latitudes of Sri Lanka during 05th to 15th of April in this year.

The nearest areas of Sri Lanka over which the sun is overhead today (10th) are Nagawilluwa, Galgamuwa, Sigiriya, Palugasdamana and Mankerni about 12:11 noon.

Condition of Rain:
Showers or thundershowers are likely at a few places in the sea areas off the coast extending from Colombo to Hambantota via Galle and Matara.

Winds:
Winds will be south-westerly or variable. Wind speed will be (20-30) kmph. Wind speed can increase up to 40 kmph at times in the sea areas off the coast extending from Galle to Pottuvil via Matara and Hambantota.

State of Sea:
The sea areas off the coast extending from Galle to Pottuvil via Matara and Hambantota may be fairly rough at times. The other sea areas around the island will be slight.

Temporarily strong gusty winds and very rough seas can be expected during thundershowers.