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Bridging the Gaps: The COVID-19 crisis and Sri Lanka’s healthcare response

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By Priyanka Jayawardena

Like many other countries, Sri Lanka faces numerous challenges in the battle against COVID-19. The pandemic has caused deep uncertainty and presented a colossal challenge for the country’s healthcare system. With the rapid increase in cases and the emergence of new variants, Sri Lanka began to face shortages of medical resources, including hospital beds and medical equipment.

The vaccination programme was beset with a host of problems early on due to the irregular and inconsistent supply of vaccines, disorganised deployment and deviation from the scientifically agreed prioritisation. There was also alleged misreporting of COVID-19 daily statistics in the Gampaha district and Eastern Province. The absence of real-time data acted as a hindrance to obtain a reliable risk assessment in the country. Against this backdrop, this blog examines the gaps in the ongoing pandemic control programme and outlines ways to bridge these gaps so that more lives could be saved from COVID-19.

COVID-19 Vaccination Programme

By mid-August 2021, more than 12 million Sri Lankans (55% of the population) had been vaccinated with at least the first dose. Other than the delayed supply of vaccines, there were issues related to getting approval for vaccine use and the vaccination prioritisation process. Moreover, many people were seen queuing up at vaccination centres aggravating health risks due to the lack of a properly planned system for vaccine deployment and the lack of an online appointment system. More recently, the government has taken several measures to improve the rollout, including expediting the procurement process and improving administration with the support of the defence services.

Gaps in Pandemic Control

Sri Lanka’s rate of COVID-19 screening has remained inadequate to prevent the spread of the virus. Systematic surveillance is crucial for the rapid identification and detection of suspected COVID-19 cases. With newer variants found to be more transmissible and deadlier, there is a need to identify mutants and track the nature of transmission. Currently, the University of Sri Jayewardenepura is the only institution equipped with laboratory facilities to conduct genomic sequencing to identify new variants.

Countries like Singapore, New Zealand and Australia systematically monitor the pandemic through extensive testing and contact tracing. These countries are conducting 10-100 times more tests than other countries with a similar number of new confirmed cases. Sri Lanka’s extent of testing relative to the scale of the outbreak (positive rate was around 10%), is on par with Thailand and Malaysia but lower than India, Vietnam and Cambodia where the positive rate is below 5%.

Further, a major challenge to the existing healthcare system is inadequate ICU beds, ventilators, oxygen supplies and other necessities required to care for patients with severe respiratory failure. The availability of ICU capacity plays a crucial role in critical cases, and constant and uninterrupted availability of oxygen supplied beds is needed to avert a disaster. Currently, less than 200 ICU beds are in isolation units for patients with severe COVID-19 symptoms, whereas just around 700 ICU beds are available in the hospital system of the entire country.

Equally, it is vital to have timely access to real-time data so that meaningful insights can be drawn but due to capacity constraints and administrative issues, PCR test results are reported to be delayed. In some districts, the delays are said to be longer than one week. Thus, delays in generating test results are a grave concern and represent a major obstacle in the COVID-19 control process. There is a growing need for immediate and accessible healthcare and digital healthcare resources to effectively respond to the challenges posed by COVID-19. However, Sri Lanka’s health information systems are weak and under-funded and the lack of an adequate central health database and IT infrastructure has hampered digital health services.

Towards a Stronger Healthcare Response

The healthcare system has to be streamlined to ensure a successful vaccination deployment and a smooth inoculation programme with online appointments including over the phone appointment facilities. Parallel to an efficient vaccination programme, an enhanced screening capacity is needed for the rapid identification of COVID-19 cases. Sri Lanka’s overall COVID-19 screening capacity remains low; therefore, expanding testing and increasing the health sector’s capacity to identify new mutants is vital to curb the pandemic. Random PCR testing too must be carried out in densely populated areas which are prone to be contagious, thereby taking additional precautionary measures.

There is a growing concern about the availability of medical supplies in emergency contexts. Sri Lanka has to effectively leverage its limited resources in response to the pandemic. The crisis response has seen local innovation in the manufacturing of ICU beds and lab consumables and there is further scope to encourage local enterprise and innovation for this purpose. For instance, a team of Sri Lankan scientists recently invented a new PCR test kit using NANO technology, which is said to drastically reduce the testing time from two hours to half an hour. There is now an opportunity to encourage local innovation and local production through such efforts, where they contribute to efficiency gains.

Furthermore, a robust laboratory strategy, which includes laboratory networking, communicating real-time information on COVID-19, quality assurance and adequate workforce capacity is important for rapid detection and case management. South Korea, for example, practised the disclosure of real-time information on COVID-19 by the government via dedicated websites, mass media, phone messages and mobile apps. Digitalisation of healthcare and effective use of technology for sharing real-time data, contact tracing and surveillance and coordinating the efficient use of clinical resources are vital for successful pandemic control. It is also necessary to improve systems to manage real-time data and decision-support systems. Improved functional integration and coordination in treatment centres and laboratory services bring in many benefits.

*This blog is based on the comprehensive chapter on “Coping with Pandemics: Sri Lanka’s Healthcare System” in IPS’ forthcoming ‘Sri Lanka: State of the Economy 2021’ report.

Link to original blog: https://www.ips.lk/talkingeconomics/2021/09/02/bridging-the-gaps-the-covid-19-crisis-and-sri-lankas-healthcare-response/

Priyanka Jayawardena is a Research Economist at the Institute of Policy Studies. Her research interests include education and skills development, labour economics, inequality analysis, health economics and child nutrition. She holds a BSc (Hon) in Statistics and an MA in Economics from the University of Colombo, Sri Lanka. (Talk to Priyanka – priyanka@ips.lk)



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Tax revenue rebound seen as reshaping SL’s sovereign risk outlook

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Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando

Sri Lanka’s improving tax performance is reshaping its sovereign risk outlook. With the tax-to-GDP ratio rebounding to 15.4% from pre-crisis lows near 10%, markets are seeing early signs that fiscal consolidation is becoming structurally anchored—supporting debt sustainability, IMF programme credibility and a gradual return to capital markets.

Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando said on Monday that tax revenue is on track to reach 16% of GDP by the end of this year, marking one of the strongest fiscal reversals in the country’s recent history. Speaking at a ceremony at the Inland Revenue Department (IRD) to present appointment letters to 100 newly recruited Assistant Commissioners, he said all three main revenue-collecting agencies—the IRD, Sri Lanka Customs and the Excise Department—have exceeded their annual targets.

From a macroeconomic standpoint, the recovery in revenue mobilisation reduces Sri Lanka’s reliance on debt accumulation, monetary financing and ad hoc tax measures—key vulnerabilities highlighted during the economic crisis. Dr. Fernando said the Government’s medium-term objective of lifting the tax-to-GDP ratio to 20% is achievable if credibility in fiscal governance continues to improve.

He attributed the revenue surge primarily to the restoration of trust between the state and taxpayers rather than to technology or enforcement alone. Improved compliance, he said, reflects growing confidence that public funds are being managed transparently and directed towards development priorities, reversing years of entrenched tax evasion linked to weak governance.

Fernando also stressed the correlation between higher tax ratios and lower corruption, noting that Sri Lanka’s revenue base had eroded sharply during periods of institutional decay. The recent rebound, he said, signals renewed accountability and more disciplined public financial management.

On public sector reform, he rejected the narrative that the public service is inherently a fiscal burden, arguing that inefficiencies stemmed from decades of politically motivated recruitment. The government, he said, is now rebuilding the public service through merit-based, competitive recruitment, aligned with broader public sector transformation and fiscal capacity. The newly appointed officers, he added, will play a critical role in strengthening revenue administration and policy implementation.

Turning to structural growth constraints, Dr. Fernando highlighted low labour force participation—particularly among women—as a key drag on income expansion and future revenue potential. Despite women accounting for a majority of the population, female participation remains below 30%, limiting productivity growth and narrowing the tax base. Raising participation levels, he said, is essential to sustaining higher growth over the medium term.

He also stressed the importance of simplifying the tax system to improve predictability and compliance while ensuring all eligible taxpayers are captured. Sustainable revenue growth, he reiterated, must come from broadening the base rather than imposing excessive burdens on a narrow segment of taxpayers.

By Ifham Nizam

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WTS IPO opens tomorrow

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The Initial Public Offering (IPO) of WealthTrust Securities Limited (WTS) will open tomorrow, inviting the public to subscribe for 71,548,244 Ordinary Voting Shares at an Issue Price of LKR 7.00 per share. Through the Issue, WTS seeks to raise a total of LKR 500,837,708, with the Company’s shares expected to be listed on the Diri Savi Board of the Colombo Stock Exchange (CSE).

WTS is a Primary Dealer authorised by the Central Bank of Sri Lanka, and is also licensed by the Securities and Exchange Commission of Sri Lanka as a Stock Broker (Debt) and Stock Dealer (Debt). The proceeds of the IPO are intended to further strengthen the Company’s core capital buffer and support the expansion of its investment and trading portfolio in government securities, enhancing capacity to manage market and interest rate risk while supporting sustained value creation.

The Issue is being managed by Asia Securities Advisors (Private) Limited as Manager and Financial Advisor to the Issue. With the offering priced at a discount to valuation benchmarks cited in the Prospectus, and with broad-based interest typically seen in well-positioned capital market listings, WTS enters its opening day with positive sentiment and strong anticipation among prospective investors.

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CBC Finance lists on the Colombo Stock Exchange

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(Left – Right): Delakshan Hettiarachchi, Executive Director and Acting CEO – CBC Finance Ltd; Sanath Manatunge, Managing Director and CEO – Commercial Bank of Ceylon PLC; Rajeeva Bandaranaike, CEO – CSE; Sharhan Muhseen, Chairman –Commercial Bank of Ceylon PLC & CBC Finance Ltd; Sarath Jayasuriya, Senior Director – CBC Finance Ltd; Ms. Nilupa Perera, CRO – CSE; Akila Karunarathne, Manager – Investment Banking – Commercial Bank of Ceylon PLC.

CBC Finance Ltd, a subsidiary of the Commercial Bank of Ceylon PLC commemorated its listing on the Colombo Stock Exchange (CSE) by way of the issuance of LKR 1.5 bn worth of debentures by the ceremonial ringing of the market opening bell on the CSE trading floor.

CBC Finance Ltd raised LKR 1.5 Bn on 27th November 2025 with an oversubscription of an issue of 15 Mn Listed Rated Unsecured Subordinated Redeemable Debentures for a tenure of five years and a fixed interest rate of 11.50% p.a. payable annually (AER 11.50%), with a par value of LKR 100/- and an issue rating of “BBB+(lka)” by Fitch Ratings Lanka Limited.

Sharhan Muhseen, Chairman of CBC Finance Ltd and the Commercial Bank of Ceylon PLC, who was the events keynote speaker remarked upon the companies listing and CBC Finance’s role, commenting: “We are a key part of the economy. The development of the capital market is essential for the economic growth of the country. Thus, through this debenture issue, we encourage investors to participate in the development of the capital markets which is a key driver of economic growth.”

Delivering her welcome address at the event, Ms. Nilupa Perera, Chief Regulatory Officer of CSE, remarked upon the wide array of products CSE offers, stating: “The Colombo Stock Exchange has introduced several innovative instruments, from Shariah compliant debt instruments to GSS+ instruments – Green bonds, Social Bonds, Blue Bonds, sustainable and sustainability linked bonds, perpetual bonds and high yield debenture bonds. We hope that CBC Finance Ltd will use CSE to raise capital through these instruments.”

CBC Finance Ltd., formerly known as Indra Finance Ltd. and subsequently re-named as Serendib Finance Ltd., was acquired by Commercial Bank of Ceylon PLC in 2014. The company was established in 1987 as Indra Finance Ltd and has 21 branches island wide, delivering a wide range of financial services to Individual and SME segments, and enjoys an A (lka) Stable from Fitch Ratings Lanka Limited. In the financial year 2024, the company recorded a net profit of LKR 82 Mn and successfully expanded its Total Asset Base to LKR 17 bn. Its parent company, The Commercial Bank of Ceylon PLC, was named Sri Lanka’s Best Trade Finance Bank at the prestigious Euromoney Transaction Banking Awards 2025.

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