The net inflows of overseas investment in Bangladesh declined by 10.80 per cent to $2.56 billion in 2020 as the global investment was hit hard by the Covid-19 pandemic.
According to data provided by the Bangladesh Bank, the net inflow of foreign direct investment (FDI) stood at $2.56 billion, down by 10.80 per cent in 2020, compared to $2.87 billion of 2019.
However, foreign investment during the October-December period of 2020 increased nearly 15 per cent to $828 million, which was $720 million during the same period of the preceding year.
“As the Covid-19 pandemic hit the global economy badly, there was slower inflow of foreign investments. While the local investments also went through a dull trend sending the overall investment in the negative territory,” Zahid Hussain, former lead economist of the World Bank, Dhaka office told The Business Post.
He also said that the investment scenario would not also improve in the current year as the second wave of the pandemic already hit the country's businesses and economy.
In attracting investment from home and abroad, the economist suggested to boost investors' confidence by bringing most of the countrymen under Covid vaccination.
Besides, the government has to simplify the rules and regulation in doing business as well as improve the business climate in the country.
As per the BB data, equity investment increased by 4.8 per cent to $842.29 million while reinvestment rose by 6.73 per cent to $1.56 billion in 2020. On the other hand, intra-company loans declined by 74.26 per cent to $155 million in 2020.
The Netherlands made the highest investment of $400 million, while the United Kingdom was the second largest investor with an investment of $396.65 million followed by the United States with $296.35 million.
Like the previous year, the power sector received the highest investment of $508 million followed by food $332.54 million and $302 million in banking.
Textile and weaving sector received $271 million investment.