The Export Development Board (EDB), the apex body driving exports of the country, is working on an export strategy to boost exports to the African region, China and India in a bid to diversify the country’s export market, a top official of the EDB told the Business Observer on the sidelines of the 19th Exporter Forum at the EDB last week.
EDB Chairperson Indira Malwatte said the EDB has already commenced work on the strategies for China and India, two major markets for Sri Lanka with a population exceeding 2.5 billion.
“The strategies for China and India are being worked out and we hope to commence work on the strategy for Africa shortly,” Malwatte said.
Bilateral trade between Sri Lanka and South Africa leans in favour of South Africa. Trade figures between the two countries in 2017 reveal that Sri Lanka’s exports to South Africa was US$ 42 million while imports was US$ 286 million.
Malwatte said the EDB is confident of achieving this year’s export target of US$ 20 billion.
However, achieving the target does not seem to be a smooth sailing according to the EDB chief.
“The target set this year for exports is achievable but it would be an uphill task given the volatile global economic conditions that weigh in heavily on demand for goods from key markets,” Malwatte said.
The global economy is slated to slowdown to 2.6 percent this year according to the World Bank’s latest update on the global economic forecast released last week.
The World Bank in its bi-annual global economic prospects report expects global growth to be weaker than the expected 2.6 percent this year and inch-up to 2.7 percent next year.
Export turnover for the first three months this year recorded an 8.9 percent growth over the corresponding period last year and the dividends from the National Export Strategy (NES) has been over 30 percent according to EDB data.
The NES targets US$ 28 billion in 2022 from merchandise and service exports. Export turnover in 2018 fell short of the target of achieving US$ 17.4 billion following a deficit of US$ 430 million.
The NES Plan of Action was adopted as the next five-year plan for export promotion of focused sectors. The national export strategy 2018-2022 was formulated under the guidance of the Ministry of Development Strategy and International Trade with other government and private sector stakeholders with the support of the EU and technical assistance from Geneva.
On the implication of the Brexit issue on Sri Lanka’s exports Malwatte noted that the EDB with the government has taken cognizance of this fact.
“EDB is closely monitoring the developments of Brexit and will take appropriate action accordingly,” Malwatte said.
However, last week economists said a soft, hard or no Brexit at all should not be taken for granted. Sri Lanka needs to have clear cut strategies to overcome challenges and move forward in bilateral and multi- lateral trade with UK and the EU which are key markets for Sri Lanka.
Referring to the post Easter scenario for exports the EDB chief said so far there is no major impact on exports by the tragedy. However, according to Malwatte two business delegation visits had been postponed.
The April 21 attacks have had a crippling effect on small and medium scale entrepreneurs whose operations are interlinked with a vast chain of businesses. Delivery of good on time has been a huge issue resulting in loss of orders from sourcing markets.
Businesses linked to tourism are the most vulnerable sector as tourist arrivals have plummeted by around 70 percent according to the Sri Lanka Tourism Promotion Bureau Chief.
Meanwhile exporters grappling a plethora of issues that stifles opportunities to excel in performance noted that the slow pace of issues being sorted out at EDB forums has failed to address issues expeditiously.
“We have been attending the exporter forum for the third time but so far have not received a favourable answer to our issue,” an official of Factory Style Lanka (Pvt) Ltd said.
The company is requesting a land and building owned by Lanka Salusala Ltd. on a long term lease which has been approved by the Cabinet.
The company representatives claim that Lanka Salusla has breached the Cabinet directive in refusing to release the land and building at Thumpane, Galagedera in the Central Province.
“The EDB will take up the matter with the minister to find an alternative land in the area to be released for Factory Style Ltd.,” Malwatte said.
Representatives of Regency Tea (Pvt) Ltd., claimed that the company has not been issued the Certification of Country of Origin by the Ministry of Foreign Affairs. It noted that Libyan banks charge discrepancy and delay payments. Verox Labs (Pvt) Ltd. said that Research and Development companies are unable to recover money paid as guarantees. “There is no VAT/SVAT exemptions for small scale R&D companies,” a representative of the company said.