Aerial view of a high voltage substation.Industrial power tower background.

Power producers want dollars for smooth electricity

Ahead of summer months of skyrocketing electricity demand, the Bangladesh Independent Power Producers’ Association (BIPPA) on Wednesday asked the Bangladesh Bank to provide US dollars to local commercial banks in order to ensure smooth power generation, among three other demands.

In a letter, the BIPPA asked for the dollars so those could then be used to settle outstanding LCs, an issue which has persisted since the dollar crisis started.

The association of power producers also asked the Bangladesh Bank to enable local commercial banks to process LCs for critical imports such as HFO (Heavy fuel oil), lube oil and spare parts for power generation.

The BIPPA letter warned that as weather heats up, electricity demand will also surge.

“In addition, demand for electricity will sharply rise for irrigation at the onset of Boro harvest season and upcoming Ramadan.

“We feel that with the support from Bangladesh Bank we may be able to alleviate some of the above mentioned issues before the country faces heavy load-shedding during this critical period.”

It also requested that the single borrower limits for the power generation sector be raised. The single borrower exposure limit is 25% of banks’ regulatory capital. Amid a hike in dollar costs, the Bangladesh Bank in July withdrew the single borrower exposure limit for six months in the case of lending to power producers.

In the 12 February letter signed by BIPPA President Faisal Khan, the association also asked the central bank to support the Bangladesh Power Development Board in paying “the extremely overdue payments”.

The government currently owes independent power producers around Tk16,000 crore, say BPDB officials. The arrears were around Tk22,000 crore last month.

The BIPPA pointed out that due to the shortage of US Dollars in the market, it was not possible for the member companies to comply with their obligation to maintain the required HFO, lube oil and spare parts stock to meet electricity demand.

Similarly, the current financial crisis and prevailing dollar shortage had led to local commercial banks refusing to open LCs to import those items.

“All our member companies are facing severe cash-flow crisis due to the extreme delay in monthly electricity bills payable by BPDB,” the letter said, adding, “Most of our member companies are facing huge financial losses due to the working capital needs and severe losses due to Taka-US Dollar depreciation.”

Mezbaul Haque, executive director and spokesperson, Bangladesh Bank, said, “We have received the letter and will look into the matter. We will also scrutinise the sectors the government is giving importance to and release dollars as needed.”

Faisal Khan, president, BIPPA, told The Business Standard that they had a meeting with the central bank governor on the amount of dollars which needed to be released to import HFO.

“He assured us that he would provide the required currency to open and settle LC,” he said.

“At present, we can only import 70% of the required fuel to generate electricity. But if the remaining 30% of fuel import is not recovered,  power generation from fuel-based power plants will not improve to meet the growing summer demand,” he added.

The BIPPA has also written to the governor of the Bangladesh Bank, requesting a courtesy call.

Normally, the BIPPA requires around 3.5 lakh tonnes of furnace oil each month to supply 26% of total electricity demand.

Currently, 15 lakh pumps are being operated by farmers. Of these, approximately one-third run on electricity and the remaining on diesel.

Alimuddin Bishu of Bogura’s Sariakandi irrigates about 60 bighas of land with an electrical pump. But frequent electricity cuts, now 5-7 times in the daytime, force him to irrigate at night.

Next to Bishu’s land, another farmer Saju Pramanik irrigates the land with a diesel-run machine. He has Boro paddy on 5 bighas of land this season.

According to the Power Grid Company of Bangladesh Limited (PGCB) Bogura office, the power demand in three grids is 120 megawatts during peak hours.

“Now 80%-90% of that is being supplied,” said Iqbal Hossain, assistant engineer of Power Grid Company of Bangladesh (PGCB) Bogura office.

He said power demand goes up by 30% during the summer.

Delays in payments by the BPDB are costing private power producers dearly as four of the eight listed power companies reported loss in the first half of the current fiscal year.

According to officials at the companies concerned, BPDB is supposed to pay for fuel imports and capacity charges within 45 days of power supply, but the state-owned agency is not doing so due to the dollar crisis as the charges are payable in dollars.

Imran Karim, former president of the BIPPA, earlier told The Business Standard how they were facing two types of problems due to late payments — increased borrowings from banks and increased losses on foreign currency exchange.

Citing an example, he had said they received the April dues in September and accordingly paid to banks as imported fuel costs. “We got the payment at the April dollar rate. But after receiving the payment in September, we had to pay the energy cost to the banks at a higher rate for dollars,” he said, explaining how rising exchange rates inflated their costs.

Last month, their association proposed increasing the usage of HFO or furnace oil-based power plants to meet the demand surge next summer and save foreign currency used to import costly liquefied natural gas. In its proposal to the Power Division, it estimated that the use of furnace oil-based plants can be increased from 40% to 66% this year and it would help the government save on electricity cost by cutting expensive spot LNG needs.


Bangladesh can have bigger slice of UK’s $327bn light engineering market

Analysts and stakeholders came up with the optimism at a discussion event in the capital

Bangladesh can have a bigger slice of the $327 billion worth light engineering market of the United Kingdom, sector insiders and analysts said, as the northwestern European country offers developing nations privileged access to its markets with a new arrangement, called Developing Countries Trading Scheme.

The generous scheme that came into effect early this year has replaced the UK’s earlier Generalised Scheme of Preferences or GSP. Developing countries like Bangladesh, under the scheme, can now enjoy reduced tariffs and relaxed rules to export goods to the UK.

“The new scheme can be a game changer for Bangladesh to break into non-RMG export sectors, such as light engineering,” Research and Policy Integration for Development (RAPID) Chairman Mohammad Abdur Razzque said.

“With the preferential trading scheme for developing countries, the UK relaxed local value-addition requirements from 30% to 25%, liberal product-specific rules, extended cumulation facilities, and removed the requirement of ratification of certain international conventions,” he said while presenting the keynote at a meeting that the RAPID organised at a capital hotel to discuss opportunities and challenges in exporting light engineering goods to the UK.

Infographic: TBS

Infographic: TBS

As a result, Bangladesh will enjoy benefits and flexibility in exporting goods to the UK market more than the EU, he said.

Talking to The Business Standard after the event, Abdur Razzaque said the competitive labour force is one of the key strengths of Bangladesh, which can significantly help increase exports of diversified products like light engineering.

“Bangladesh exporters, however, are not linked with the international supply chain, which is a key bottleneck,” he further added.

According to the International Trade Centre data, the UK imported light engineering goods worth $327 billion in 2021, while Bangladesh’s contribution was worth $56 million or 0.02% only.

In the meantime, the Bangladesh government announced light engineering goods as an emerging export item beyond RMG.

Bangladesh’s overall export of engineering products in FY22 was $796 million, according to the Export Promotion Bureau (EPB) of Bangladesh, which is 1.5% of the merchandise export of the country.

In the discussion, stakeholders identified some challenges behind the poor performance in the export of the item.

Lack of value chain connection, complexity in customs, absence of international standard testing facilities, lack of access to finance, problems with LC opening, unavailability of skilled labour force, and disruption in energy supply are the major problems, among others, they added.

Industry representatives also talked about the complexity of the generalised scheme of preferences verification from the UK end.

“The customs department sets higher values, instead of actual values in the case of raw material imports. As a result, we pay higher taxes and our production costs go up, which ultimately decreases our competitiveness,” said Rashed Mahmud, managing director of Kitty Industries Limited – an electrical product manufacturer.

For example, customs counted the price of our raw material at $2160 on Tuesday, which was $1450 in actual, he explained and added that there are some other complexities in taxation.

Lutful Bari, secretary general of Bangladesh Bicycle Manufacturers and Exporters Association, said, “We did  not receive Tk5 crore in refunds from the Duty Exemption and Drawback Office over the past 11 years.”

Abdur Rouf, deputy executive director of Walton Group, said the government approved a new import policy order which is expected to ease the duty-free raw material import for the partial importers, but NBR told us that they were not notified of the matter.

Speaking at the event, Additional Commerce Secretary Abdur Rahim Khan hoped that the cabinet will okay the new tariff policy soon and the next budget will have its reflection.

“So, the NBR will consider some issues.”

Md Abu Eusuf, executive director of RAPID, also spoke at the event, among others.

Source: TBS News


Selloffs wipe out Tk680cr market cap from insurance sector in a week.

In their bid to book quick gains from the recently rallied insurance stocks, investors put huge sell pressure on the sector throughout last week, and the sector ended up losing Tk680 crore in market capitalisation.

Of the amount, general insurance lost Tk434 crore, and life insurance Tk246 crore at the Dhaka Stock Exchange (DSE).

Last week, seven insurance companies made the list of top losing stocks at the DSE, of which, Pragati Life Insurance was the most corrected with a loss of 15.9%, compared to the previous week. The company’s share price stood at Tk125.8 each last Thursday.

Earlier, in January this year, Pragati Life’s share price jumped by 152% in just about four months. The DSE sent query letters to the company twice seeking explanations behind this unusual price hike. But the company said the reason behind this price hike is unknown.

But after the stock’s rally, investors decided to sell their holdings in Pragati Life, and due to this sell pressure, the company’s share price dropped by 25% in the last two weeks.

The same was the case with the shares of other insurance companies.

Other than Pragati Life, Pragati Insurance, Popular Life Insurance, Sonali Life Insurance, Pioneer Insurance, Green Delta Insurance, and Sandhani Life Insurance also made the top losers’ list last week.

DSEX, the benchmark index of the DSE, fell by 11.43 points to close at 6,283 last week, compared to the previous week. The Shariah index DSES also lost 2.07 points, and stood at 1,371.

But the blue-chip index DS30 gained 4.62 points to reach 2,235 as investors reshuffled their portfolio with big companies’ shares – the issuers of which posted earnings growth in the latest quarterly financial statements.

Companies like Apex Footwear, Olympic Industries, Bangladesh Shipping Corporation made the top gainers’ list last week.

EBL Securities said in its weekly market review that the DSEX extended its correction mode for the second consecutive week as investors continued to rebalance their portfolios in response to the earnings disclosures of the listed companies for the latest quarter.

The market has been concentrated on selective issues that have been able to post favourable bottom-line results, defying recent macroeconomic adversities, it added.

However, the daily average turnover of the DSE increased by 14.2% to Tk648 crore in the week, compared to Tk567 crore in the previous week.

The IT sector dominated the weekly turnover list, capturing 17.9% of the total DSE turnover, followed by pharmaceuticals (14%) and miscellaneous (9.5%).

Buyers had been concentrated on selective stocks while the majority of stocks remained stuck at the floor price level. Of 380 issues traded, 200 remained unchanged, 138 declined, while 42 advanced on the DSE floor.

Genex Infosys became the week’s turnover leader with shares worth Tk327 crore changing hands, followed by Bangladesh Shipping Corporation, Shinepukur Ceramic, Orion Pharma, and Olympic Industries.

Most of the major sectors suffered losses with general insurance incurring the highest loss of 4.4%, followed by life insurance, non-bank financial institutions, power, and pharma.

Source: TB News


ICB plans to issue right shares to raise fund.

In 2014, ICB raised Tk1,054 crore through issuing right shares

The Investment Corporation of Bangladesh (ICB), which has been facing a shortage of funds, intends to raise money by issuing right shares to inject fresh funds into the capital market.

On 23 January, the state-owned company formed a five-member committee in this regard.

ICB Managing Director Md Abul Hossain told The Business Standard, “The committee has been asked to submit a report after analysing the money market and capital market. The authorities will take a decision on issuing right shares after that.”

He said that the committee has been formed as part of the feasibility study before taking any decision.

“A decision cannot be taken without market verification. Because, there is no guarantee that shares will be subscribed,” he added.

Issuing right shares is an invitation to existing shareholders to purchase additional new shares in the company. This process grants the existing shareholders securities called right. With the right, the shareholder can purchase new shares at a discount to the market price on a stated future date.

Officials stated that prior to making any decisions regarding the issuance of right shares at the ICB board meeting, the approval of the shareholders is mandatory. Once secured, the corporation will then submit an application to the Bangladesh Securities and Exchange Commission (BSEC) in connection to this matter.

They said that ICB will utilise the funds collected from the right shares by investing them in the capital market. At present, it is unable to sell its shares due to the floor price restriction imposed by the regulators.

In the first half of the current fiscal, from July to December, the profit of ICB declined drastically as they failed to gain capital from share sales.

Meanwhile, around Tk667 crore of the corporation has got stuck in different non-bank financial institutions due to bad investment choices.

Md Abul Hossain said, “Some institutions have already renewed their contract by paying the interest and some companies are yet to do so. We are trying to recover the capital.”

The ICB has fallen into another woe as the Universal Financials Solution’s (UFS) owner has fled away embezzling around Tk158 crore.

According to its latest annual report, the ICB has invested Tk48 crore in three mutual funds under the UFS asset management company.

In 2014, ICB raised Tk1,054 crore through issuing right shares.

At that time one right share was issued against every two shares. Each share was issued at Tk500 with an issue price of Tk100 and a premium of Tk400.

It invested Tk554 crore from the amount raised in the stock market and Tk500 crore was used to repay loans.

Seeking anonymity, an official of the Bangladesh Securities and Exchange Commission told TBS, “The commission is taking new initiatives to increase liquidity in the market. As a result, initiatives are being taken to increase the capacity of ICB. In the current situation of the capital market, the commission has taken the initiative of issuing right shares positively.”

Keeping depository funds out of exposure limits

ICB collects funds in the form of term deposits from public and private banks for investment in the capital market, which is calculated in the exposure of the respective banks.

Recently, ICB requested the Bangladesh Bank to keep term deposits out of exposure due to a fund crisis.

Senior officials of ICB held a meeting with the central bank to get this facility. However, the central bank has not announced any decision in this regard.

Md Abul Hossain said, “Banks will be keen to invest in ICB if depository funds are kept out of exposure. And if funds are available, ICB can increase investment in the capital market. Besides, ICB has also sought Tk1,000 crore from the central bank.”

According to the financial report of ICB, till June 2021-22 FY, the corporation has raised a capital of Tk5,774 crore as term deposits from different banks and non-bank financial institutions, which is 17% less than the previous year.

In the first half of the current financial year, ICB’s profit fell by 67% to Tk46.50 crore due to a decrease in capital gain.

At the same time in the previous fiscal, its net profit was Tk140.08 crore.

Its capital gain from shares has declined by 59% to Tk208.61 crore in July-December 2023, which was Tk512.31 crore at the same time in the previous fiscal.


BB injects $330m into market since IMF loan!

The Bangladesh Bank has injected $330 million into the country’s foreign exchange market since February 1 when the International Monetary Fund disbursed $476.27 million to Bangladesh as the first installment of a $4.7 billion loan.

The Bangladesh Bank has injected $330 million into the country’s foreign exchange market since February 1 when the International Monetary Fund disbursed $476.27 million to Bangladesh as the first installment of a $4.7 billion loan.

web-Bangladesh bank-bb

The Washington-based lender approved the loan in January under the extended credit facility (ECF) and the extended fund facility (EFF) to help the country defuse the ongoing volatility in its foreign exchange market.

Although the IMF has suggested Bangladesh reduce the frequent injection of US dollars into the market, the central bank has not followed the recommendation yet, said Ahsan H Mansur, executive director of the Policy Research Institute.

Between July 1 and February 9, the central bank supplied a record $9.44 billion to the market, according to data from the BB.

After the disbursement of the first tranche of the loan, the reserves stood at $32.69 billion on February 2, but the volume fell to around $32.6 billion yesterday owing to the continuous dollar injection into the market.

The reserve was $45.39 billion on February 9 last year.

The IMF support came as Bangladesh continues to face an exchange rate instability fuelled by a US dollar shortage caused by the fast depletion of the reserves amid escalated import payments against lower-than-expected export and remittance receipts.

According to an IMF document, rebuilding foreign exchange reserves remain a critical priority for Bangladesh in the short term.

Greater exchange rate flexibility, including attracting remittance inflows through formal channels, and scaling back non-monetary use of foreign exchange reserves, are expected to stabilise the reserves in the context of the ECF and the EFF programme, the IMF said.

“Foreign exchange interventions, which increased since the start of Russia’s war in Ukraine, should be limited to addressing disorderly market conditions.”

The government will have to start following IMF conditions from March this year.

As per the global lender’s quantitative performance criteria, foreign exchange reserves can’t be below $24.5 billion in June, $25.3 billion in September, and $26.8 billion in December.

Mansur explained that around $7 billion would have to be added to the reserves calculated by the IMF as the central bank considers the Export Development Fund and the funds under some other schemes while calculating its reserves.

This means the central bank will have to keep a reserve of at least $32 billion in June.

“So, the central bank should cautiously supply foreign currencies to the market. If the reserves slip below the level, the IMF may discontinue its programme and postpone its next disbursement,” Mansur said.

The IMF will disburse $4.7 billion in several installments over a 42-month period.

If the export earnings and remittance don’t increase to the expected level, the government will have to take more austerity measures, said Mansur, also a former high official of the IMF.

Although still in the positive territory, the current trends of export and remittance earnings, the two biggest sources of US dollars for the country, don’t promise that the receipts would go up in a massive way this year as the global economy continues to face challenges posed by the war-related disruptions.

Between July and January, exports grew 9.81 per cent year-on-year to $32.44 billion, according to data from the Export Promotion Bureau.

Expatriate Bangladeshis sent remittances amounting to $12.45 billion, in the first seven months of the current financial year, up 4.25 per cent from a year earlier.

Mansur says that the financial account of the balance of payments is now in the negative zone, so the central bank should take more policy measures, including the withdrawal of the ceiling of a 9 per cent interest rate on loans.

The deficit in the financial account stood at $1.09 billion in the first six months of 2022-23 in contrast to $6.89 billion during the same period a year ago, BB data showed.

Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue, thinks that it will not be possible to stop the erosion of reserves by only using the IMF’s funds given the volume of the debt servicing and import payments.

Imports fell 2.15 per cent year-on-year to $38.13 billion in July-December.

“Both the government and the central bank should start the reform programmes in the financial sector that have been suggested by the IMF and local economists,” Rahman said.

Local economists and analysts have recommended the government take more measures to tackle the hundi cartel, an illegal cross-border financial transaction, to increase the remittance inflow.

Their calls came as the flow of remittance is still lower than expected given that a record number of Bangladeshis went abroad in 2022 in search of jobs. More than 11.35 lakh Bangladeshis left the country for jobs abroad last year.

“On top of that, the central bank should ask businesses to repatriate export proceeds as early as possible,” Prof Rahman said.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, says that although the deficit in the current account has narrowed in recent times, the majority of banks is still facing a shortage of dollars.

“Some banks are unable to open letters of credit as per the requirement of clients.”

Source: The Daily Star


Japan wants to invest another fertiliser factory in Bangladesh

The Japan Bank for International Cooperation (JBIC) has expressed interest in setting up another fertiliser factory like Ghorashal Fertilizer Factory in Ashuganj, Bangladesh.

The JBIC has also shown interest in financing in different sectors including sugar, automobile and electronics.

The information came on Thursday while the meeting between Industries Minister Nurul Majid Mahmud Humayun and JBIC Governor Hayashi Nobumitsu at Industries Ministry in the city, reports BSS.

Humayun said Japan is helping Bangladesh in agriculture and industry in various ways.

“We are working together on setting up fertiliser plant. The development of the Japanese economic zone in Narayanganj is ongoing,” he added.

Source: The Financial Express


Policy making on offshore investment faces dilemma

Capital Account Transaction (Overseas Equity Investment) Rules 2022 have similar provisions.

A latest policy preparation facilitating Bangladeshis making offshore investment in foreign countries gets into a dilemma as some officials mentioned that an already-existing law on ‘Capital Account Transaction’ holds identical provisions.

Sources said different state agencies, including finance ministry and Bangladesh Bank (BB), were not in favour of making the new policy on this issue.

They believe that there is no need to prepare a separate policy on the matter under Bangladesh Investment Development Authority (BIDA) as there is a law styled ‘Capital Account Transaction (Overseas Equity Investment) Rules 2022’ in the country.

“The authority will send a summary paper to PMO (Prime Minister’s Office) to attach opinions…,” says one official, adding that the entire opinions will be put in the paper to consider whether the proposed policy can be prepared or not.

An inter-ministerial committee formed by the PMO has prepared the draft of the policy titled ‘Bangladeshis Foreign Investment Abroad 2021.’ The draft was already submitted to the PMO on September 29, 2021.

However, it finds similarity in the objectives and contents between the existing and proposed policies.

In this circumstance, the sources said, the PMO instructed the Financial Institutions Division and the central bank (Bangladesh Bank) to take next course of action.

In that context, the inter-ministerial committee was presented a comparative statement on the final draft of the ‘Capital Account Transaction (Overseas Equity Investment) Rules 2022’ and the ‘Bangladeshi Foreign Investment Policy 2021’ in its 6th meeting.

It also decided to send the draft Bangladeshis Foreign Investment Policy to all the member-agencies and trade bodies, including foreign affairs, and agriculture ministries, finance division, BB, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) for eliciting their opinions.

Only eight agencies, including foreign, and agriculture ministries, FBCCI, Dhaka Chamber of Commerce & Industry (DCCI) and Bangladesh Securities and Exchange Commission (BSEC) suggested some amendments and additions to the policy.

On the other hand, three agencies-finance division, FID and BB-recommended that there is no need for a separate policy as already there is Foreign Equity Investment) Rules 2022. The dissent came at the 7th meeting of the committee.

“The members of the inter-ministerial committee framed the draft policy through stakeholder consultations and workshops in different levels for around three years,” reads the meeting minutes.

Contacted, a senior official said, “We will send the draft policy to the PMO for taking next decision. All members of the high-powered committee have given same opinions on PMO decision about the policy.”

He said it’s for the BIDA to take decision on the policy according to the PMO instructions.

According to the existing Capital Account Transaction (Overseas Equity Investment) Rules, Bangladeshi exporters can make overseas equity investment subject to sufficient balance in their export-retention quota (ERQ).

In this past January, the Financial Institutions Division issued the Capital Account Transaction (Equity Investment Abroad) Rules 2022 under Section 26 of the Foreign Exchange Regulation Act 1947.

In this context, some conditions and provisions have been laid down in the existing rules. The applicant will be able to invest 20 per cent of the average annual export earnings of the organization for five years or less than 25 per cent of the net assets shown in the latest audited annual financial report as equity abroad under rules.

Source: The Financial Express


Runner launches locally-made three-wheeler

Runner Automobiles yesterday launched the country’s first “Made in Bangladesh” autorickshaws for the local and foreign markets.

Runner opens three-wheeler manufacturing plant

Runner Automobiles yesterday launched the country’s first “Made in Bangladesh” autorickshaws for the local and foreign markets.

At least 70 per cent of the vehicle except for some components of the engine have been made locally through technical collaborations with Indian automaker Bajaj Auto, said Hafizur Rahman Khan, chairman of Runner Group.

Around 30,000 autorickshaws run by liquefied petroleum gas and compressed natural gas will be produced a year at Runner Automobiles’ three-wheeler plant in Mymensingh’s Bhaluka, he said at the launch.

Some 300 local and 400 foreign workers have already been employed for the 10-acre Runner factory established at a cost of about Tk 300 crore, Khan said.

“A few local organisations have also cooperated with us. This vehicle will help in transportation of the common mass along with creating more jobs.”

“Through this, a domestic company for the first time brought a three-wheeler autorickshaw to the market after manufacturing it in the country,” said Salman F Rahman, prime minister’s adviser on private industries and investment, after inaugurating the plant.

Although the autorickshaws have been produced in the country, Bangladesh still has to import 20-30 per cent of the parts to make the three-wheeler, Rahman said.

“We want to be fully capable of manufacturing three-wheelers. Runner will fulfil this gap in future.”

He said the government will extend all-out support for the expansion of the export-oriented automobile industry.

Domestic companies should adopt modern technologies to increase production and remain competitive, he said.

“Runner is the first manufacturer and exporter of motorcycles in Bangladesh,” said Subir Kumar Chowdhury, managing director and CEO of Runner Automobiles.

“With the autorickshaw, we entered into the three-wheeler industry today. We hope we will be successful in this industry like motorcycles.”

“This is not only the first three-wheeler factory in Bangladesh, but also the first Bajaj three-wheeler factory outside of India,” said KS Grihapati, president of Bajaj Auto.

“We are excited to work with Runner. The organisation has already proved their capabilities.”

He said Bajaj will contribute to the development of automobile industry in Bangladesh.

There are about five lakh three-wheelers in the country, but only one lakh are registered, said Abdul Matlub Ahmad, president of Bangladesh Automobiles Assemblers and Manufacturers Association and chairman of Nitol-Niloy Group.

“It becomes difficult to hold these vehicles accountable in case of an accident.”

The government should take strong measures to ensure registration of all three-wheelers in the country, he said.

Source: The Daily Star

Chittagong Customs office.

Growth in CTG Customs revenue is declining as a result of reduced imports

Chattogram Custom House, the largest customs station in the country, witnessed a decline in revenue growth in the first seven months of the current fiscal year 2022-23, due to fall in imports amid the ongoing dollar crisis and global slowdown due to the Russia-Ukraine war.   

The customs station reported negative growth in December and January following zero growth in the sixth and seventh months.

According to data from the customs house, the revenue growth was 40.87% in July of FY 2022-23, which declined to 24.67% in August and -0.17% in September. Afterwards, the growth increased to 3.91% in October and 14.13% in November.

The growth in revenue collection again dropped in the next two months. The growth was -9.18% in December and -4.38% in January.

Chittagong Customs office.
CTG Customs


The customs station posted 8.28% overall growth in the July-January period of the FY 2022-23, which was 25.26% during the same period of the FY 2021-22—a decrease by 17% in the seven months.

In January of FY 2022-23, the customs house collected Tk4,744.61 crore as revenue, less by 28.67% than the target of Tk6,652 crore. In December, the revenue collection was Tk4,388.05 crore against the target of Tk6,604 crore.

The target of revenue collection was set at Tk74,206 crore in the fiscal year 2022-23. Tk34,915.74 crore was collected during the July-January period against the target of Tk43,212 crore in the seven months. The earnings were recorded at Tk32,246.53 crore during the same period in FY 2021-22.

In the first seven months of the FY 2022-23, revenue collection was less by Tk8,296.26 crore or 19.20% than the target.

In the FY 2021-22, the Chattogram Customs House collected Tk59,159.83 crore against the target of Tk64,159.83 crore, posting a growth of 14.70%.

“The revenue collection in the current fiscal year has decreased compared to the previous year. Imports of low-duty products, especially food items and capital machinery have increased. But revenue collection has decreased due to decrease in imports of luxury goods including cars, cosmetics, electronics, which are high revenue collection,” Md Bodruzzaman Munshi, deputy commissioner of Chattogram Customs House, told The Business Standard.

“Earlier, the price of the dollar was Tk84, which has now crossed Tk100. As a result, the traders have to pay extra in both the price of the imported goods and the duty. On the other hand, customs revenue has also decreased. I do not see any solution to this crisis until the war situation becomes normal,” Chattogram Chamber of Commerce and Industry President Mahbubul Alam told TBS.

Chattogram Customs House collects duty on goods imported through Chattogram Port, which oversees 92% of the country’s import and export trade.

Apart from the country’s main seaport, the customs house also collects duty on goods coming through Shah Amanat International Airport in the port city.

Source: TBS News