Businesses eye investment turnaround in 2022

As economic recovery is taking hold following the pandemic shock, for growth to be sustainable and reach its full potential, private capital investment is instrumental.

The country’s economy has the potential to grow at a reasonable pace in the post-pandemic period, provided that investment resumes accordingly.

The year of 2021 was largely a period of survival for businesses amid the pandemic that shelved new investment as well as its expansion while supply chain disruption and travel restriction brought the economy to its knees.

The turnaround was noticed in the last quarter of 2021 when private credit growth stood at 10.11 per cent.

“The economy is going through a nascent recovery stage. If we consider return on investment in the new normal situation, the best would come from digital services, information technology, light engineering and highly prospective consumer goods,” said Abul Kasem Khan, director, AK Khan and Company.

Compared to the previous year, there was an uptick in peoples’ income in 2021 and is expected to grow in 2022, opined the business tycoon.

Kasem pointed out that in mid-term and long-term plan, investment focus should be on logistics and communication sector.

Not only in the domestic market, the demand for consumer goods has also gone high in the global market, which is an opportunity for Bangladesh to grab.

In this respect, Chief Executive Officer of Akij Ventures Syed Alamgir told The Business Post with the ease of Covid-19 situation, employment figure is improving which will shoot up the demand for consumer goods.

“To cater for the demand, our investment focus in 2022 is on consumer goods for both local and export markets,” said Alamgir.

“On the other hand, we are digitising operation, supply chain and structural development – all these being new incentives for our consumers.”

According to the Bangladesh Bank data, imports of consumer goods rose by 28.76 per cent to $ 1.47 billion during July-October of 2021 while overall imports went up by 51.42 per cent to $ 23.9 billion at the same period.

Digital economy in wider outlook

Travel restriction and contactless communication to avert Covid-19 infection made digital services an integral part of lives that became the cornerstone during the shutdown and paved ways for new investment to tap opportunities.

In this regard, Muhammadi Group Managing Director Rubana Huq said business people would likely make more investment in digital economy in the New Year.”

“We would all know how the digital world is going to look like with the advent of metaverse. So, any platform playing with the software online technology would have investment in focus,” observed Rubana.

“For the year 2022, 6.6 per cent GDP growth is predicted which is not just a figure, it is a general landscape of the economy that is most important.”

Strong backward linkage takes precedence

The largest contributor to the national export -- Apparel sector -- will focus on developing strong backward linkage, technology upgradation and automation to compete in the global market.

“As an apparel exporter, I won’t make investment in basic products, rather investment will go to semi-automation to improve product quality while focus should be on mid-range and high-value items,” Faruque Hassan, managing director, Giant Group, told The Business Post.

The president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) posited that backward linkage for high-end products like lingerie, suits and jackets is another key area for investment, and the need for strong backward linkage came to the fore due to the pandemic, which disrupted supply chain.

Echoing the same as Hassan, Label Edge Managing Director Al Shahriar Ahmed said when the supply chain hit snag due to Covid-19, apparel sector fell into uncertainty to execute a bevy of work orders.

“So, it is high time we got to improve our capacity to meet domestic demand and our focus is to that end,” he viewed.

Creating financial products

Investors, mostly small ones, are facing problem when it comes to availing funds, and it is time to come up with financial products to ensure cash for them, opined Rizwan-ur-Rahman, director, Eastland Insurance Company.

“Beyond the banking sector, I would like to create financial products like bond to provide long-term collateral free loans for SMEs,” he said.

The president of Dhaka Chamber of Commerce and Industry maintained that insurance will provide guarantee, and that would be his investment focus in 2022.