A recent national survey conducted by LIRNEasia, a regional policy think tank, showed that 44% of Sri Lanka’s population aged 15 and above were internet users in 2021. Internet use was lower amongst the rural, elderly, less educated and poorer groups. Those residing in rural areas, for example, were 19% less likely to be online than their peers residing in urban areas (Figure 1).
The pandemic situation has brought many online, with 31% of new users (aged 15 and above) in 2020 and 2021 citing that they came online due to a need brought about by the pandemic. Despite the growth experienced, internet use levels in Sri Lanka this year were below that of countries such as India and Nigeria. Sri Lanka’s sub-par performance in this regard is notable for two reasons. First, because empirical evidence shows that countries with higher per capita income often have higher internet use levels. Sri Lanka’s internet use levels were below that of countries with lower per capita income levels. Second, because Sri Lanka has out-performed these countries in the past, but recent high growth in countries such as India — where internet use grew by 25% annually — have led to them overtaking Sri Lanka (Figure 3).
“Concerted efforts should be made to bring and keep those at the margins online,” Senior Research Manager, Gayani Hurulle of LIRNEasia, stated. “These include ensuring that high-quality, affordable internet is available to all, and digital skills of users are built to allow for productive, responsible and safe internet use.”
The survey findings were released at a virtual launch event conducted on 8 December 2021, which included a panel discussion with leading government, private sector and civil society representatives. Panelists included Oshada Senanayake (Director General, Telecommunications Regulatory Commission of Sri Lanka & Chairman, ICT Agency of Sri Lanka), L. Ilaangovan, Secretary of Education, Cultural Affairs, Sports and Youth Affairs of the Northern Provincial), Jiffry Zulfer (Founder and CEO, PickMe), Karin Fernando (Team Leader for Sustainable Development, CEPA) and Gayani Hurulle (Senior Research Manager, LIRNEasia). The discussion was moderated by Rohan Samarajiva (Chair, LIRNEasia).
Seven factors of concern at upcoming Monetary Policy Review
by Sanath Nanayakkare
The Central Bank of Sri Lanka (CBSL) is scheduled to announce its latest monetary policy review on 20th January 2022, with all eyes on dwindling foreign reserves and foreign currency exchange in the country.
In this context, First Capital Research has named 7 factors of concern that could be taken into account at the upcoming monetary policy review. They are as follows.
* Foreign Reserves USD 3.1 billion – Dec 2021
* Inflation CCPI 12.1% – Dec 2021
* GDP Growth -1.5% – 3Q2021
* Private Credit LKR 60.5 billion – Nov 2021
* 03M T-Bill rate 8.38% as at 12.01.22
Liquidity and CBSL Holdings LKR -364.0 billion and LKR 1.42 trillion
Balance of Trade (BOT) and Balance of Payment (BOP) USD -6.5 billion and USD -3.3 billion for Jan-Oct 21
First Capital Research’s Policy Rate Forecast – Jan 2022-Apr 2022 notes that they believe the CBSL may highly consider tightening the monetary policy rates in this policy review but given the concerns over economic growth, there is a probability of 40% for CBSL to maintain its policy stance at current levels.
“With high frequent indicators improving in line with expectations, we have eliminated any probability of a rate cut. We expect a continued increase in probability for a rate hike in order to prevent overheating of the economy amidst the given fiscal and monetary stimulus,” they said.
As per First Capital’s view, CBSL either can choose to hike policy rates by 50bps or 100bps or hold policy rates steady, while a rate cut is off the table due to the high debt repayment and the high domestic borrowing requirement.
First Capital believes that there is a 60% probability for a rate hike due to the remedial actions required in achieving external stability.
However, there is also a 40% probability to maintain the policy rates at its current level in order to further improve the high frequency indicators.30%, they noted.
Sri Lanka’s dash brand enters international markets
Multichemi International Ltd, which manufactures and distributes a wide range of products under dash, one of Sri Lanka’s leading detergent and household care brands, has begun exporting its products to several international markets in Asia and Oceania, with plans also to enter Africa. The dash brand includes a wide range of products in car care, household care, home fragrances and laundry care sectors. Multichemi International Ltd, which has been awarded ISO 9001:2015 certification, is a Sri Lankan pioneer in environment-friendly cleaning products, having launched the country’s first biodegradable, safe cleaning products over 28 years ago.
Amila Wijesinghe, General Manager of the Company said,”Having conquered the domestic market, we are now ready to capture the international market. We are confident that our products which are of high quality will receive a good demand overseas as well. The feedback we have received so far from our overseas customers is extremely encouraging. We are dedicated to taking our products to the international market, to bring in foreign currency to the country and help uplift the economy”,
Janaka Abeysinghe appointed SLT CEO
Sri Lanka Telecom PLC has announced the appointment of Janaka Abeysinghe as its Chief Executive Officer (CEO) with effect from February 1, 2022.
The incumbent CEO Kiththi Perera will be overseas on leave for a period of two years to pursue higher studies, according to a stock market filing by the company.
Abeysinghe joined SLT in 1991. In his present role, he leads the enterprise and wholesale business of SLT that provides integrated voice and data solutions to enterprises, government institutions, domestic telco operators and global wholesale carriers.
In his career at SLT spanning 29 years, he has held a number of senior positions, including general manager Enterprise and International Sales and has extensive experience in the areas of Enterprise Digital Services, Enterprise Communications Solutions, Data Communications, Business Development, Domestic and International Switching Operations and Global Wholesale Voice & Data Business.
He holds a Master’s Degree in Electrical and Computer Engineering from the University of Kansas, USA and a BSc degree in Electronics and Telecommunications Engineering with a First Class Honours from the University of Moratuwa.
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