By: Staff Writer

December 26, Colombo (LNW): Sri Lanka’s Tourism Development Fund (TDF) has faced significant mismanagement, leading to inefficiencies and irregularities, as revealed by the Auditor General’s 2023 report.

The fund, which is intended to promote tourism development, is financed by a 1 percent contribution from hotel and tourism businesses and 0.5 percent from small enterprises, along with a 0.33 percent of the Embarkation Levy.

Managed by the Sri Lanka Tourism Development Authority (SLTDA), the funds are distributed to various tourism bodies, including the SLTDA, Sri Lanka Tourism Promotion Bureau (SLTPB), Sri Lanka Institute of Tourism & Hotel Management (SLITHM), and the Sri Lanka Convention Bureau (SLCB) based on allocations outlined in the Tourism Act No. 38 of 2005.

However, stakeholders, including hoteliers, tour operators, and other tourism-related businesses, have raised concerns over the lack of transparency in the fund’s allocation and use.

There is little clear communication about how the funds are being spent, leading to dissatisfaction among industry professionals. Many express frustration with the absence of detailed reporting on the effectiveness and outcomes of the TDF.

The 2023 Audit Report highlighted several issues with the fund’s management. These include delays in the utilisation of allocated funds, irregular disbursements, and a lack of systematic monitoring and evaluation.

 In many cases, funds were allocated without proper documentation or approval, which raised questions about the accountability of the distribution process.

Additionally, there were significant lapses in adhering to financial regulations, including incomplete records, improper allocation of expenses, and failure to comply with procurement procedures.

A major concern was the inefficient use of funds, with large portions remaining unspent for long periods.

This inefficiency has hindered the effective implementation of tourism development programs. In some cases, tourism infrastructure projects suffered from cost overruns, delays, or incomplete work, leading to underutilization of resources.

The report also pointed out that some TDF projects were funded without following necessary procedural guidelines, and there were instances where advances to contractors and service providers were not recovered in a timely manner.

Moreover, the audit revealed a lack of strategic planning in the allocation of funds, which led to reactive rather than proactive initiatives.

Without a comprehensive long-term strategy, tourism development efforts have been fragmented, resulting in suboptimal outcomes for the sector.

Inadequate coordination between government bodies, private-sector stakeholders, and local communities has further contributed to inefficiencies in project implementation.

Finally, weaknesses in internal control systems and oversight were noted. The absence of robust internal audits and safeguards against misuse or misallocation of funds makes the TDF vulnerable to mismanagement.

Strengthening financial oversight, improving the disbursement and monitoring processes, and ensuring greater transparency are critical to restoring confidence in the fund and supporting sustainable tourism development in Sri Lanka, audit report observed.

By: Staff Writer

December 26, Colombo (LNW): Sri Lanka is celebrating a significant milestone in its tourism recovery, welcoming its 2-millionth visitor today. The Sri Lanka Tourism Promotion Bureau (SLTPB) is marking this achievement as the country experiences its strongest tourism season since 2018.

December has been a standout month, recording 161,383 tourist arrivals in just the first 22 days. A new daily record of 10,820 arrivals was set on 22 December, while daily numbers exceeded 10,600 from 20-22 December, pushing the average daily arrivals to 7,336.

This surge builds on impressive results in November, which saw 184,168 tourists—a 22% year-on-year increase. December arrivals are projected to reach 256,389, with year-to-date (YTD) figures already surpassing 1.96 million. Sri Lanka is on track to close 2024 with 2.1 million visitors and over $3 billion in tourism revenue.

Speaking at the National Tourism Awards 2024, Sri Lanka Tourism Development Authority (SLTDA) Chairman Buddhika Hewawasam highlighted the industry’s resilience and growth. “We are ending 2024 on a high note, with hotel occupancy climbing to 80% and a vibrancy returning to the sector after nearly five years. The best years for Sri Lanka Tourism lie ahead,” he stated.

India has been the largest source market, contributing 35,131 tourists in December, or 22% of total arrivals. Russia followed with 22,637 visitors, while the UK ranked third with 12,822. Germany and Australia completed the top five with 9,998 and 8,646 arrivals, respectively. For the full year, India accounted for 399,224 visitors (20.3%), followed by Russia (189,299) and the UK (172,404).

Hewawasam emphasized that the ongoing winter season signals the beginning of a new era for Sri Lankan tourism. He announced a structured five-year plan aimed at elevating the sector through institutional reforms and innovative strategies. “Our vision is ambitious but attainable. Tourism’s contribution to the economy, now at 11%, could grow to 15%-20% with effective policies and collective dedication,” he said.

Acknowledging the role of stakeholders, Hewawasam called for continued collaboration to maintain the sector’s growth trajectory. He stressed the need to nurture a skilled workforce to meet the rising demand and create sustainable opportunities across the country.

“Tourism recovery is not just about numbers—it’s about transforming lives and fostering opportunities nationwide,” he noted. He also emphasized the importance of enhancing Colombo’s appeal as a hub for city hotels while promoting lesser-known destinations for balanced regional development.

As Sri Lanka closes in on a record-breaking year, the government and tourism authorities are determined to sustain this momentum. With robust growth, a resilient industry, and a clear roadmap, Sri Lanka’s tourism sector is poised for a brighter and more sustainable future.

By: Staff Writer

December 26, Colombo (LNW): Sri Lankan food and beverage (F&B) exporters made significant strides in accessing the European Union (EU) market through their participation in SIAL Paris 2024, a premier global F&B exhibition held from October 19 to 23 in France.

A key focus of Sri Lanka’s involvement, organized by the Sri Lanka Export Development Board (EDB) in collaboration with the Sri Lankan Embassy in France, was promoting EU PGI-certified Ceylon Cinnamon products.

With financial support from the International Finance Corporation (IFC), a dedicated promotional area was set up to highlight the premium cinnamon offerings of 10 Sri Lankan companies, including Samagi Spice Exports Ltd., Pasanka Ltd., and Jaith Ceylon Cinnamon Ltd. This initiative was aimed at boosting Ceylon Cinnamon’s visibility and enabling its penetration into the lucrative EU market.

To enhance exposure, the Embassy produced a promotional video featuring French Chef Dominique Pambrun, showcasing the culinary versatility of Ceylon Cinnamon to European audiences. A pre-event social media campaign in French and English further created awareness among potential EU buyers.

The Embassy also facilitated business-to-business (B2B) meetings and invited top European importers, such as Carrefour, to visit the Sri Lanka pavilion. In addition, the EDB shared importer contact details with participating companies beforehand, enabling them to arrange meetings and negotiations effectively.

By the end of the exhibition, Sri Lankan firms had secured $2.8 million in confirmed orders from EU and other buyers. Moreover, negotiations for an additional $3.6 million in potential business were ongoing for spices, coconut products, confectionery, and processed foods.

Sri Lanka’s proactive efforts at SIAL Paris reflect a strong commitment to expanding its F&B exports into the EU, leveraging the event’s global platform to establish long-term commercial partnerships and enhance the country’s presence in international markets.

The Sri Lankan Embassy in France, led by Sri Lankan Ambassador Manisha Gunasekera, provided comprehensive support to the EDB in organising Sri Lanka’s participation at the event. The Embassy connected several leading buyers with the Sri Lankan companies, including the Carrefour supermarket chain in France.

The Ambassador visited the Sri Lanka pavilions and had discussions with the Sri Lankan companies during the trade fair.

Prior to the exhibition, the EDB, with the assistance of the Sri Lankan Embassy, shared the contact details of potential importers for all product sectors displayed by Sri Lankan companies, enabling the participant firms to arrange business meetings.

Further, the Sri Lanka Mission in France invited all potential importers to visit the Sri Lanka pavilion and arranged B2B meetings with potential importers at the pavilion.

The Embassy also organised a successful social media campaign in the French and English languages for a period of more than five weeks.

To give more visibility and to attract potential commercial partners to the Sri Lanka pavilion in two locations, the EDB organised a webinar series before the exhibition for the individual participants/companies highlighted by SIAL Paris.

By: Staff Writer

December 26, Colombo (LNW): On December 20, 2024, Sri Lanka achieved a major milestone in its economic recovery by officially exiting sovereign default. This accomplishment follows a period of painful reforms and complex debt restructuring, Treasury Secretary Mahinda Siriwardena announced.

He emphasized that Sri Lanka must adhere to key economic principles, regardless of political changes. These include fiscal discipline, sound monetary policies, and the stabilization of public finances to create fiscal space for development and honor commitments to both domestic and international stakeholders.

Encouragingly, there are early signs of the de-politicization of macroeconomic policy, a shift that Siriwardena believes will be further solidified by strong legal frameworks like the Central Bank of Sri Lanka Act, Public Financial Management Act, and Public Debt Management Act.

“This upgrade is a critical milestone,” Siriwardena said, “but it is only the beginning of Sri Lanka’s journey towards shared prosperity. To succeed, we must avoid repeating policy errors driven by dogmatic beliefs or unsustainable practices.”

Moody’s Upgrades Sri Lanka’s Credit Rating

Global rating agency Moody’s recently upgraded Sri Lanka’s Long-Term Foreign Currency Issuer Rating to Caa1 from Ca, with a stable outlook.

Previously under review for an upgrade, this decision reflects the successful restructuring of Sri Lanka’s international bonds held by private creditors, significantly reducing default risks on future issuances.

Moody’s noted that the new rating reflects improvements in Sri Lanka’s external vulnerability and government liquidity risks, as well as prospects for fiscal and debt sustainability.

These improvements are underpinned by ongoing reforms aligned with programs supported by development partners, including the International Monetary Fund (IMF).

The government’s ability and willingness to implement these reforms also highlight improvements in governance, which contributed to the rating action.

However, Moody’s warned that challenges remain. Despite the upgrade, Sri Lanka’s debt affordability remains weak, and its debt burden is high compared to peer nations, limiting fiscal flexibility. Additionally, the country faces significant social challenges that need attention.

The stable outlook reflects balanced risks. On the positive side, sustained reform implementation could further strengthen Sri Lanka’s credit profile, potentially leading to higher ratings.

 On the downside, risks remain due to a narrow government revenue base, limited fiscal space, and reliance on external financing. Adverse global economic conditions could threaten sustained recovery and reform progress.

Progress on International Bond Restructuring

Concluding the review initiated on November 28, 2024, Moody’s has assigned definitive Caa1 ratings to Sri Lanka’s new USD-denominated Macro-Linked Bonds (MLBs), Governance-Linked Bonds (GLBs), and Past-Due Interest (PDI) Bonds. Additionally, the agency raised Sri Lanka’s local and foreign currency country ceilings to B1 and B3, respectively.

The upgrade highlights reduced external risks, increasing foreign exchange reserves, and improved macroeconomic stability. However, Moody’s noted that challenges such as high external debt and a fragile domestic political environment continue to pose risks.

Sri Lanka’s exit from default and the recent rating upgrade by Moody’s mark a new chapter in its economic recovery. Continued commitment to reforms and prudent policymaking will be crucial to achieving long-term stability and prosperity.