KARACHI: Foreign direct investment (FDI) in to the country jumped by 78 per cent in the first five months of current fiscal year mainly on account of large inflows in the telecommunication sector.
The massive jump in the FDI comes after one-off payments were made by the telecom companies — Telenor, Warid and Zong — for licence renewal during the first five months of current fiscal year.
Latest data released by the State Bank of Pakistan (SBP) showed the country received $850 million in FDI during July-November period against $477.3m in the same period last fiscal year.
The data further revealed that net inflows of $19.5m in the portfolio investment account, during the first five months of current fiscal year compared to an outflow of over $330m in the corresponding period last year, helped bolster the overall tally of foreign investment.
The FDI inflows in November also increased to $285.4m compared to $200m in the same month last year, largely on account of a $70mn capital injection made by Telenor into its bank.
According to the SBP report, private foreign investment jumped by 493pc to $869.7m during the period under review compared to $146.7m in the same period last fiscal year.
The data showed that foreign public investment — investment in government debt papers ie T-bills — rose to $1.137 billion which pushed the overall investment in the country to $2.0bn. Compared to that, public investment during the same period last fiscal year was almost zero.
Despite being largest investor in the country, China was second to Norway during the period under review as investments from Beijing clocked in at $141.9m compared to $94m in the same period last fiscal year.
Moreover, Norway emerged as the leading foreign investor with the inflows of $334m against a net outflow of 74.2m in the last fiscal year. The investment included the license renewal fee paid by the Norway-based telecom firm and $70m capital injection into the Telenor Microfinance Bank.
On the other hand, the cumulative $100.8m inflows from the UK came under the FDI and portfolio investment accounts at $65.1m and $35.7m respectively.
Sector-wise data showed the telecommunication attracted highest amount of $280.4m against a net outflow of $122.7m during the same period last year.
Financial business received an investment of $131m during the period compared to $64.9m last year. Investment in the electrical machinery sector dipped to $83.4m compared to $124.4m last fiscal year.
Further, investment in the power sector, which has been the pick of investors during the last few years, clocked in at $53.7m in the first five months of current fiscal year compared to a net outflow of $346.7m during the same period last fiscal year.
The biggest debacle was noted in the construction sector where foreign investment rose rapidly in the last few years but the inflows in the current fiscal year clocked in at $7.5m compared to $242.7m last year.
Published in Dawn, December 18th, 2019