From promise to paralysis: Elusive FDI boost in Sri Lanka

EARLY this month, confusion arose as to how much Foreign Direct Investment (FDI) was channelled into the country's economy in the first quarter (1Q) of this year due to various individuals and institutions of the Government apparatus presenting contradictory figures. Minister of Industries and Entrepreneurship Development Sunil Handunneththi stated that Sri Lanka received $ 650 million in FDI during the 1Q of 2025. However, his remark differed from the latest data issued by the BOI.

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According to the state foreign investment promotion agency, the realised FDI over the first three months of the year was $ 203 million representing a surge of 90% over the corresponding period in the previous year. These inconsistencies prompted Opposition politicians to criticise the Government and question the credibility of its statistics. That said, the reported 90% rise in the realised FDI over the 1Q 2024 is undoubtedly a positive development.

Last year coincided with two national elections. It was not a conducive period for investments due to uncertainty over Government policy direction. In contrast, the country today is associated with heightened political and policy stability, with both the Executive and Legislature represented by the same political party. During the run-up to the national election cycle last year, the NPP assured the electorate that an administration led by them would be better poised to attract a significant amount of FDI by eliminating the entrenched culture of soliciting bribes and kickbacks from investors.