The government last week lowered the country’s 2013 foreign direct investment (FDI) target to US$ 1.5 billion, clearly implying that Sri Lanka had failed to materialize the original target of US$ 2 billion for 2012, which was later revised downwards to US$ 1.75 billion.
“Neither I am a believer of numbers nor do I not deny that the FDI target is off-track. But what we need to realize is that the investor sentiments are high as never before. We have also developed a credible investment pipeline which will pay off,” said Treasury Secretary Dr. P.B. Jayasundera, confiding the sustainability of those flows.
Dr. Jayasundera also mentioned that the government was not providing or extending tax holidays for investments as before, except for larger scale investment projects, as the government is committed to fiscal consolidation by way of achieving tax revenue targets, as the country’s tax system was much simplified.
Meanwhile, M.M.C. Ferdinando, the Chairman of the Board of Investment (BoI), the apex investment promotion agency in the country, speaking to Mirror Business said that the full year FDIs were slightly above US$ 1.2 billion for 2012. This is an increase from last year’s US$ 1.07 billion, the highest ever FDI the country attracted.
“Although we have failed short of accomplishing our original target of US$ 2.0 billion, I am certain we would have attracted slightly above US$ 1.2 billion, which can be exactly verified once the audit report is finalized in three months,” Ferdinando remarked.
However, this is amidst the FDIs during the first 11 months of 2012 falling 9.4 percent to record only US$ 614.7 million, way below the full year target.
The FDI figure is arrived at by the accumulation of the funds received throughout the year in a piecemeal basis from the total value of the projects of which the agreements signed this year or in a previous year.