• Targets US $ 25bn in merchandise exports and US $ 11bn in service exports by 2029
• EDB says political stability will help drive economic growth and exports
• NCE stresses need for reduced production costs and taxes

By Nuzla Rizkiya

The government has set its sights on an ambitious annual export revenue target of US $ 36 billion to be achieved by 2029, according to the Export Development Board (EDB). 

The plan, as outlined by EDB Chairman Mangala Wijesinghe, aims to nearly double the merchandise export revenue by increasing it from the current average of US $ 12 billion to US $ 25 billion, while increasing service exports from US $ 3.6 billion to US $ 11 billion in the next five years.

This growth also includes elevating the current export growth rate of 4-6 percent to a projected 14-15 percent, starting next year, aiming for a total revenue target of US $ 45 billion, including the earnings from tourism.

Sharing the update at an EDB media briefing yesterday, Wijesinghe emphasised that the government has a strong understanding of the crucial role exports play in driving economic growth, noting that several strategies have been outlined to achieve these ambitious targets.

“The government, now backed by a two-thirds majority, is hoping to leverage the political stability in the coming years to drive economic growth. By focusing on strategies such as stringent anti-corruption measures, an increased focus on attracting FDIs and streamlining the approval processes by interconnecting export-related agencies under the government’s digital economy initiative, we aim to create a more conducive environment for both the large-scale and small-scale exporters,” Wijesinghe stated.

He further shared that currently only 9-10 percent of Sri Lanka’s exporters in the large-scale manufacturing category generate over US $ 1 million in revenue annually. Therefore, more products and small and medium-scale enterprises should be encouraged to enter the larger-scale category, to broaden the export base and drive overall growth.

“Value addition in key sectors such as tea, rubber and ICT can make a significant contribution to these aspirations. Moreover, we must make better use of Sri Lanka’s strategic position in the Asian region and focus on strengthening our foreign reserves,” he stated.

Meanwhile, industry stakeholders imply that the new target might be an even bigger challenge for the government, considering factors such as global market demands, market access, production capacity and the availability of both intellectual and infrastructure resources in the country.

Speaking to Mirror Business, National Chamber of Exporters (NCE) President Jayantha Karunaratne reiterated that Sri Lanka should focus on creating a more conducive environment for the exporters to overcome  obvious challenges such as the high cost of production.

“Elevating merchandise exports to US $ 25 billion in such a short span of time is a very high challenge target because the most important thing to consider when increasing exports is finding the market and whether we can produce it here in Sri Lanka in a competitive and efficient manner,” Karunaratne commented.

He stressed that export production is comparatively very expensive in Sri Lanka and to make matters worse, the situation is further compounded by factors such as the current 30 percent tax on the export sector, which is highly discouraging for the exporters.

“The strategies should be practical and we have to make sure we keep our costs down. When people export, bring back the money and reinvest it for development and still have to pay a 30 percent tax, they definitely will not consider making long-term investments,” he stated.