BB: FDI in Bangladesh fell 20.46% last year, not 56%

Bangladesh received $2.87 billion in Foreign Direct Investment (FDI) in 2019, down by 20.46% on last year’s overseas investment inflows, the Bangladesh Bank (BB) has claimed.

The figure, however, contradicts the amount of $1.6 billion in FDI, as mentioned in Tuesday’s report of the United Nations Conference on Trade and Development (UNCTAD).

The FDI in the country fell by 56% year-over-year to $1.6 billion in 2019, according to UNCTAD.

BIDA officials said the BB had failed to provide data for the last quarter in time to UNCTAD, which had led to confusion and given misleading information to the world about the country’s foreign investment.

“The figure ($1.6 billion) mentioned in the UNCTAD report does not reflect the real picture of Bangladesh’s FDI as it did not include the investment of the last quarter of 2019. As per Bangladesh Bank data, the FDI was $2.87 billion in 2019,” Sirajul Islam, executive chairman of Bangladesh Investment Development Authority (BIDA), told Dhaka Tribune.

It could well be that the central bank had failed to provide data to UNCTAD in time due to the Covid-19 pandemic, he added.

Sirajul Islam said the fall in FDI was lower than the figure released by UNCTAD.

Since the FDI depended on the global economic situation and willingness of investors, it could be up or down anytime, he added.

“In 2018, we had a good investment in tobacco and the stock market , which helped to register a sharp rise by 68% over last year,” he explained.

In 2018, Japan Tobacco invested $1.47 billion to buy United Dhaka Tobacco, a venture of Akij Group, while two Chinese stock exchanges invested Tk947 crore on buying 25% of DSE stake.

Contacted by Dhaka Tribune, the central bank spokesperson declined to make any comments on why the data had not been given or what actually had happened with regard to the actual FDI inflows last year.

“I cannot make a comment on whether the relevant department provided the data to the UNCTAD or not. I can say that the figure is much higher than in the report and it is $2.87 billion,” BB Executive Director and spokesperson Md Sirajul Islam said.

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Contacted, Astrit Sulstarova, Chief, Investment Trends and Data Section, Investment Issues Analysis Branch Division on Investment and Enterprise, UNCTAD, yesterday says the FDI data provided by the BB had been for up to September, 2019.

“Unfortunately, when we finalized the data for the World Investment Report 2020, the Central Bank of Bangladesh have reported only three quarters. Therefore (we) used annual data reported by the IMF,” says Astrit in an email response.

“I would like to mention that FDI data are continually revised, updated and corrected by relevant national authorities.”

Sectors and country’s investment status

According to the BB data, equity investment declined by 28.50% to $803.70 million, while reinvestment increased by 12.08% to $1.47 billion last year.

Besides, intra-company loans declined by 48.90% to $603 million in 2019.

As in the previous year, China came out as the largest investor in the country with $625 million FDI, followed by the United Kingdom with $416 million and Singapore with $272 million. The United States made an investment of $197 million last year.

Norway and the Netherlands made investments of $194 million and $191 million, respectively in the given year.

The power sector received the highest investment of $942 million, with $562 million alone coming from China, while the banking sector got $335.33 million during the period through December 31, 2019.

The third recipient sector was food with $248.51 million in FDI , while the textile and weaving sector got $244.18 million, with the telecommunication attracting $208.35 million.