Investment registration in Chattogram, often regarded as the commercial capital of Bangladesh, has seen a steep 40 per cent decline over the past year.
Despite efforts by the previous Awami League government to initiate several mega projects in the region, a combination of inefficiencies hindered the expected growth in investments.
Factors such as economic instability within the country, money laundering abroad, dwindling foreign reserves, and a lack of adequate logistical support have all contributed to the drop in investment registrations in the Chattogram region.
In the financial year 2023-24, a total of 80 companies registered their investments in the Chattogram region, amounting to Tk 3,450 crore. In contrast, the previous financial year, 2022-23, saw 60 companies register investments, totalling Tk 5,726 crore. This reflects a year-on-year decrease in investment volume by Tk 2,275.79 crore, or 39.74 per cent.
Investment potential unmet
Industry insiders suggest that various ongoing crises have undermined investor confidence in pursuing new investments within the country. They warn that without improvements in the domestic economic climate and a resolution to political tensions, the investment potential in Chattogram will remain unrealised.
They noted that despite the implementation of several mega projects in the Chattogram region, the ousted Awami League government fell short in providing sufficient logistical support, limiting the appeal for both domestic and foreign investors.
Industry insiders emphasised that improving the ease of doing business and enhancing logistical facilities for international investors would be essential steps towards increasing investment in the region.
Investment and employment trends
According to data from the Bangladesh Investment Development Authority (BIDA), 80 companies registered to invest in the Chattogram region for the financial year 2023-24. These investments were expected to create employment opportunities for a total of 5,676 people. In comparison, during the financial year 2022-23, 60 companies registered with plans to generate 4,734 jobs.
Looking further back, in the financial year 2021-22, a total of 127 companies registered investments in the region, targeting 13,008 jobs against a total investment of Tk 1,960.46 crore.
In the financial year 2020-21, a total of 124 companies submitted investment proposals in the Chattogram region, amounting to Tk 2,497.67 crore, with a projected employment generation of 8,867 jobs. Meanwhile, in the financial year 2019-20, a total of 174 companies proposed investments totalling Tk 1,540 crore, aiming to create 15,502 jobs.
Setbacks and investor hesitation
BIDA officials note that while the previous Awami League government initiated several large-scale projects centred on Chattogram, many lacked comprehensive feasibility studies, leading to inadequate execution.
Projects such as the Karnaphuli Tunnel, Mirsarai Economic Zone (MEZ), various industrial areas in southern Chattogram, and new initiatives in Cox’s Bazar have yet to achieve full success.
Additionally, challenges during the previous administration, including money laundering, declining foreign reserves, a dollar shortage, reduced financial capacity among banks, corruption across various sectors, and inadequate logistical support in project areas, coupled with political instability, have discouraged both local and foreign investors from pursuing new investments in the region.
Entrepreneurs report that due to recent political shifts, many who registered investments in past years remain hesitant to establish factories, citing concerns over stability. Until the country’s administrative and security situations improve, a significant number of businesses and investors are opting to pause their investment plans, waiting for a more stable environment.
Investment stagnation and potential
Mohammed Moazzam Hossain, director (Deputy Secretary) of the Chattogram Divisional Office of BIDA, told The Business Post that investment registration in the Chattogram region has become somewhat stagnant, partly due to a lack of a comprehensive one-stop service.
Noting that many domestic and foreign investors go through Dhaka to access all required services in one place, he said, “As a result, we do not always have complete data on investment activities in Chattogram.”
Moazzam Hossain further noted that many investors who have been allocated land in economic zones have yet to begin infrastructure development due to a lack of essential facilities. “In Mirsarai Economic Zone (MEZ), there are shortages of water, gas, connectivity, and skilled labour, which has prevented the expected level of investment,” he said.
However, the BIDA Chattogram Divisional Office director pointed to Chattogram’s strategic position, emphasising, “With a seaport, this region is truly the investment hub of Bangladesh.”
Mentioning that international investors often prefer countries ranked highly in ease of doing business, Moazzam Hossain said, “The interim government is trying to attract investors from various countries, further positioning Bangladesh as a promising destination for foreign investment.”
“We hope that both domestic and foreign investors will ultimately choose Chattogram for its strategic advantages,” he added.
