Foreign Direct Investment (FDI) in Bangladesh has risen sharply by 68 per cent in 2018 compared to the total FDI of $2.1 billion in 2017, Bangladesh Investment Development Authority (BIDA) said yesterday. From January to December 2018, the total FID flowing into Bangladesh was $3.6 billion, and this rising trend was expected to continue in the coming years, said BIDA chairman Kazi M Aminul Islam.
Regarding the rise in FDI, he said certain factors were attracting investment and helping to increase FDI, and BIDA played an important role. The factors he cited were the expansion of the Bangladesh economy, integration of Bangladeshi companies with foreign companies, prospects foreigners see in the Bangladesh economy, economic and political stability, limited inflation and the availability of a young and talented workforce.
“We are witnessing a rising trend in FDI due to these enablers including online one-stop services aimed at attracting investors. We hope the FDI trend will continue,” he said at a press conference at his office in the capital.
He also said infrastructural development was a big factor that was attracting FDI, as Bangladesh had taken up some mega projects to improve the country’s infrastructural facilities.
He said various reforms would be made to rules and regulations to create a more enabling environment for FDI and businesses.
Bangladesh has seen the highest investments in various sectors in 2018, mainly in power ($1012 billion), food ($730 billion), textile and wearing ($408 billion), banking ($283) billion, telecom ($220), gas and petroleum ($111 billion), and trading ($102 billion).
China made the highest investment in the power sector at $834 billion, while the United Kingdom invested $68 billion.
BIDA chairman said, “When the global FDI flow decreased by 23 per cent in the year 2018, Bangladesh witnessed an increase of 68 per cent compared to the year 2017.”
The chairman said Bangladesh has been seeing a rising FDI trend since 2016 due to various pragmatic steps taken by the government.
Equity and reinvestment by existing foreign companies doing business in the country were the two major contributors to the rising trend in FDI, BIDA said.
Aminul Islam said that the equity capital had doubled in 2018 compared to 2017.
In 2017, the equity capital was $538.90 million, while it has been doubled in 2018 to $1124.13 million.
On the other hand, the reinvested earnings have also increased to $1309.11 million in 2018 from $1279.42 million in 2017.
Even intra-company loans have witnessed a rising trend. In 2017, intra-company loans were $33.24 million but rose to $1180.06 million last year.
BIDA chairman said the companies were reinvesting because of a comfortable business environment and were reinvesting in existing companies. That was a good sign for FDI, he said.
In reply to a query, he said the government had taken measures to upscale the skills of the workforce so that entrepreneurship and innovation were enhanced at the same time and people could get employment.