Business

‘There is a business case for employer- supported childcare’

Published

4 years ago

2020/11/23

Across the globe, there has been a renewed commitment to expand early years’ services for children under five years of age. Early Childhood Care and Education (ECCE) includes both education and childcare, and while they have traditionally occupied distinctly different spheres, there has been a growing trend to integrate the two to provide more efficient and effective ECCE services for families.

In Sri Lanka, the government provides free access to compulsory primary and secondary education, but not to preschool education which is not mandatory. 70.8 percent of preschools and 78 percent of day care centers are privately operated and entail levy fees, thus reducing access and affordability for a sizeable segment of the population. Enrolment rates in primary and secondary education are high at 99 percent and 84 percent respectively. These rates were 56.6 percent in 2016 for preschool children between 3-5 years of age.

Access to affordable childcare directly affects the country’s labor force. It is worth noting that despite the high educational attainment of Sri Lanka’s women, the country’s female labor force participation rate was just 34.5 percent in 2019. A 2018 study by the International Finance Corporation (IFC) found that having a child under five years of age reduced a Sri Lankan woman’s participation in the labor force by 7.4 percent as compared with a woman who did not have young children.

What’s more, as Sri Lanka’s population ages—it has the most rapidly aging population in South Asia—family structures and gender roles change. Reduced support from the extended family is likely to leave families less able to care for young children at home, increasing their demand for childcare.

The good news is that employer support for childcare is growing. However, it does not reach parents who work in the informal sector, which in 2019 accounted for 57.4 percent of all workers.

Since 2000, successive governments have recognized the need to invest in early years services. The country has traditionally delivered these services through a multisectoral approach, with the involvement of several key ministries led, until August 2020, by the Ministry of Women and Child Affairs and Social Services (MWCASS). In addition, provincial authorities also have the power to pass legislation for the management and supervision of preschools in their provinces.

The involvement of multiple stakeholders and the lack of clarity in administrative structures has posed a major challenge for the ECCE sector. It has led to inadequate policy coherence, impacted resource allocation, and resulted in a duplication of functions. This has made it difficult to enforce uniform standards and regulations, particularly concerning the regulation of and coordination with the private sector.

In January 2020, the Sri Lankan cabinet approved a national Policy on Preschool Education tabled by the Ministry of Education (MoE). Following the parliamentary elections in August 2020 and the reorganization of ministerial mandates, ECCE was brought under the purview of the MoE, and the MWCASS was named as the State Ministry of Women and Child Development, Preschool and Primary Education, School Infrastructure and Education Services (SMWCDPPESIES). Discussions surrounding the details of this reorganization are currently underway.

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Business

Industry and Entrepreneurship Development Minister Handunneththi’s visit to Lumala highlights key industrial concerns

Published

18 hours ago

2025/04/5

Thilina Walpola

Minister inspecting along with Lumala factory manager Ranjith Siriwardana (left)

With the aim of assesing the current challenges faced by local industrialists and explore avenues for government support, Minister of Industry and Entrepreneurship Development Hon. Sunil Handunneththi visited City Cycle Industries Manufacturing (Pvt.) Ltd., widely known as Lumala, on March 24 at its factory in Panadura.

During the visit, Minister Handunneththi engaged with senior officials and employees to understand their concerns and operational difficulties. In a statement shared on social media, the Minister acknowledged the pressing challenges affecting Sri Lanka’s manufacturing sector and emphasized the government’s commitment to providing swift and effective solutions.

Minister Handunneththi further reiterated the government’s intent to position local manufacturers as key stakeholders in Sri Lanka’s economy by addressing regulatory hurdles, market imbalances, and supply chain constraints.

The visit comes amid growing concerns from Lumala employees and management regarding the state of Sri Lanka’s bicycle manufacturing industry, in the backdrop of facing significant challenges, including an influx of imported bicycles and components that circumvent regulatory checks. In addition, the high taxes on raw materials used in local manufacturing has further exacerbated production costs, making it difficult for domestic manufacturers to remain competitive.

Earlier this year, Lumala employees called for urgent government intervention to address these challenges, warning that ongoing financial strain could lead to further shutdowns of critical production units, job losses, and setbacks to the broader industrial ecosystem. With a local value addition of 50-70 percent verified by the Ministry, its workforce remains hopeful that government action will help achieve an ethical manufacturing industry.

Lumala, a household name in Sri Lanka’s bicycle industry, has been a key player in sustainable mobility solutions for over 35 years. The company was recently honored with the Best National Industry Brand award under the Large-Scale Other Industry Sector category at the National Industry Brand Excellence Awards 2024.

With a production capacity of 2,000 bicycles per day and a workforce of 200, Lumala continues to cater to both domestic and international markets, producing a diverse range of bicycles, electric bikes and light electric vehicles. In line with Sri Lanka’s goal to expand forest cover to 32 percent by 2030 and cut GHG emissions by 14.5%, Lumala is actively contributing to this mission—both as a company and through its diverse range of products.

As Sri Lanka works towards strengthening its local manufacturing sector, Minister Handunneththi’s visit signals a crucial step toward addressing industrial concerns and reinforcing government support for sustainable and competitive domestic production.

Business

New SL Sovereign Bonds win foreign investor confidence

Published

18 hours ago

2025/04/5

Thilina Walpola

Sri Lanka’s country rating was upgraded from ‘Restricted Default’ to ‘CCC’ following the successful exchange for the new International Sovreign Bonds (SL ISBs) during December 2024. The three types (03) of exciting new sovereign bonds have restored foreign investor confidence.

The Central Bank of Sri Lanka (CBSL) has performed a remarkable role in guiding the economy out of default status and restored economic stability, and gained Sri Lanka a non-default Country Rating of ‘CCC’. Among the key achievements of CBSL, have been to reduce treasury interest rates under 9% and stabilize the currency while rebuilding foreign reserves to $ 6Bn.

SL offers four Macro Linked Bonds (MLBs) linked to GDP growth, a Governance Linked Bond (GLB) and a short term, Fixed Coupon Bond for unpaid Past Due Interest (PDI). The MLBs offer variable returns depending on SL’s GDP growth from 2024 to 2027, (e.g. haircuts can vary between 16% to 39%). The GLB interest can vary depending on meeting 15.3% and 15.4% of Total Revenue/ GDP thresholds in 2026 and 2027 respectively. The PDI bond offers a fixed coupon of 4% until 2028 and trades at around $94.

This combination of unique, variable returns offers global investors an exciting opportunity to capitalize on SL’s economic revival and US interest rate movements. Sri Lanka’s economic resurgence in 2024 was promising, with a 5% GDP growth rate. With improving investor confidence, SL ISB daily turnover now exceeds $10mn.

The Ceylon Dollar Bond Fund (CDBF) is the only USD Sovereign Bond Fund that is exclusively invested in SL ISBs with Deutsche Bank acting as the Trustee and Custodian Bank. The Fund reported returns of 53% in 2023 and 39% in 2024.

We invite foreign investors to enter CDBF while Sri Lanka is rated at ‘CCC’ and consider realizing their investment upon SL reaching a Country Rating of ‘B- ‘. Other advantages of CDBF are, the ability to withdraw anytime and being tax exempted.

Ceylon Asset Management (CAM), the Fund Manager, has commenced an advertising campaign to promote the CDBF to the Sri Lankan Diaspora, South Asian, Middle Eastern and Australian Investors. CAM is an Associate Company of Sri Lanka Insurance Corporation (SLIC) and licensed under the Securities and Exchange Commission of Sri Lanka Act, No. 19 of 2021.

Meanwhile, the Ceylon Financial Sector Fund managed by CAM emerged as the top performing rupee fund in Sri Lanka during 2024, with a return of 64%. Investors can find out more on www.ceylonassetmanagement.com or write to us on info@ceylonam.com.

Past performance is not an indicator of the future performance. Investors are advised to read and understand the contents of the KIID on www.ceylonam.com before investing. Among others investors shall consider the fees and charges involved.(CAM)

Business

Share market plunges steeply for second consecutive day in reaction to US tariffs

Published

18 hours ago

2025/04/5

Thilina Walpola

CSE plunged at open, falling for the second consecutive day yesterday, down over 300 points in mid- morning trade.US President Donald Trump has imposed a 44 percent tax on Sri Lanka’s exports in an executive order which he claimed, spelt out discounted reciprocal rates for about half the taxes and barriers imposed by the island on America.

As a result both indices showed a downward trend. The All Share Price Index dropped 300 points, or 2.32 percent, to 15,294.94, while the S&P SL20 dropped 101 points, or 2.71 percent, to 4,517.37.

Turnover stood at Rs 3.1 billion with six crossings. Those crossings were reported in Sampath Bank which crossed 1.6 million shares to the tune of Rs 181 million and its shares traded at 109, JKH 4.1 million shares crossed to the tune of 80.5 million and its shares sold at Rs 19.5.

Hemas Holdings 400,000 shares crossed for Rs 45.6 million; its shares traded at Rs 114, CTC 25000 shares crossed to the tune of Rs 32.2 million; its shares traded at Rs 1330, Commercial Bank 200,000 shares crossed for 27 million; its shares traded at Rs 135 and TJ Lanka 157,000 shares crossed for Rs 20 million; its shares traded at Rs 46.

In the retail market top six companies that have mainly contributed to the turnover were; Sampath Bank Rs 296 million (2.9 million shares traded), JKH Rs 220 million (11.2 million shares traded), Haylays Rs 195 million (142,000 shares traded), HNB Rs 151 million (519,000 shares traded), Commercial Bank Rs 138 million (1 million shares traded) and Central Finance Rs 129 million (735,000 shares traded). During the day 218 million shares volumes changed hands in 22000 transactions.

It is said the banking sector was the main contributor to the turnover, especially Sampath Bank, while manufacturing sector, especially JKH, was the second largest contributor.

Yesterday, the rupee opened at Rs 296.75/90 to the US dollar in the spot market, stronger from Rs 296.90/297.20 on the previous day, dealers said, while bond yields were up.

A bond maturing on 15.10.2028 was quoted at 10.35/40 percent, up from 10.25/30 percent.

A bond maturing on 15.09.2029 was quoted at 10.50/60 percent, up from 10.45/55 percent.

A bond maturing on 15.10.2030 was quoted at 10.60/70 percent, up from 10.30/65 percent.

By Hiran H Senewiratne