Badrul Ahsan :
Country’s leading industrialists are now increasingly showing interest to make investment abroad. Central bank officials point to infrastructural drawbacks and some other constraints in doing business in Bangladesh for the industrialists’ least interest in their own country.
Bangladesh Bank (BB) has in the meantime gave go-ahead to some of such proposals for overseas investment. But the recent proposals in bigger number made it worried about a greater pressure on the foreign exchange reserve if those are approved.
Akij Group, Nitol Niloy Group and Ha-Meem Group are among the local group of companies keen on big overseas investment.
Akij Group has proposed to invest $20m in Malaysia, Ha-Meem Group $10m in Haiti and Nitol Niloy $7m in Gambia.
Ha-Meem intends to invest in the island nation’s garment sector to prop up its shipments to the US, while Akij wants to buy a Malaysian company that produce fire board and hardboard. Nitol Niloy look to Gambia’s banking sector for investment.
Besides, some more companies now await BB’s nod, the central bank further said.
Before approving such investment, usually, Bangladesh Bank wants to make it sure, among four issues, foreign exchange funds are used in specific foreign projects to get back such funds.
However, a BB official fears a mounting pressure on the country’s forex reserves if overseas equity investment by the local firms is encouraged.
A High official at the Bank and Financial Institutions Division of Finance Ministry said it is not clear whether the local firms may return home their equity investment.
The official also said local firms’ such investment proposals will go to the Cabinet Committee on Economic Affairs as the Bank and Financial Institutions Division does not take decision on its own.
The Bank and Financial Institutions Division has forwarded the Bangladesh Bank proposals to the cabinet committee.
“The proposals will be placed at a meeting of the Cabinet Committee on Economic Affairs next week on Finance Minister AMA Muhith’s return home from Japan after attending the annual meeting of the Asian Development Bank,” the official added.
The local firms’ least interest in investing in the country also resulted in an additional liquidity of Tk 2,77,956.29 crore in the banking sector, another official pointed out.
But Bangladesh needs 32 percent investment of its GDP locally to achieve targeted economic growth, the Banking Division proposal notes.
In the main proposal, Bangladesh Bank said Bangladeshi firms’ have capacity to invest in foreign countries.
As funds are being spent to import fuel oil and capital machinery along with consumer products, the growth in foreign exchange reserves becomes slow.
BB data show deficit in the balance of payment stood at $ 790m at the end of December 2016. Foreign exchange reserves stood at around $33bn – enough to honour at least 7-8 months’ import bills.
Bangladesh Bank hopes that there will be new avenues of export earnings if Bangladeshi businessmen invest overseas.
There is a possibility that the three firms will return home some foreign currencies.
The country will financially benefit from the local firms’ foreign investment, sources say.
