Nandalal cracks the whip on exporters

24 November 2022 03:33 am - 15 - {{hitsCtrl.values.hits}}

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Central Bank Governor Dr. Nandalal Weerasinghe delivers keynote address at post-business session of Sri Lanka Apparel Exporters Association’s AGM
Pic by Pradeep Pathirana

Says only 23% of export proceeds getting converted into rupees
Points out conversion rate of apparel industry is just 14%
Says a CB survey on export proceeds conversion not getting sufficient response
Warns CB won’t hesitate to name and shame exporters not complying with conversion rules
Says it is in best interest of export community to salvage their reputation

By Nishel Fernando

Amid growing public pressure, the Central Bank (CB) this week said it stands ready to name and shame the exporters who fail to provide adequate reasons within next two weeks for falling behind to convert their export earnings to rupees within the mandated time periods.

Delivering the keynote speech at the post-business session of the Sri Lanka Apparel Exporters Association’s Annual General Meeting held in Colombo on Tuesday, Central Bank Governor Dr. Nandalal Weerasinghe highlighted that only 23 percent of the export proceeds have been converted into rupees so far during the year, despite high local value additions claimed by exporters.

“You (apparel exporters) state that you are making 55 percent value addition in exports. However, from January to up to now, only 23 percent of total exports have been converted into rupees. That means value addition is only 23 percent. Your industry says 55 percent value addition. The tea and rubber industries are saying that they are making 90 percent value addition. But overall export conversion is only 23 percent,” Dr. Weerasinghe remarked.

“When you look at the apparel sector separately, the conversion rate is only 14 percent. However, I acknowledge that there could be problems with the data. We asked clarifications from banks but the banks can’t go into your books,” he pointed out.

According to the current foreign exchange regulations, the exporters are required to convert 25 percent of their export proceeds within a month and all export proceeds within 180 days.

In order to understand as to why the exporters are not converting their earnings into rupees, the CB has already launched a survey targeting 100 exporters. However, Dr. Weerasinghe noted that the majority of the exporters are not forthcoming with their responses.

“Out of 100, 23 exporters had a satisfactory conversion rate. So, we didn’t ask to send them the questionnaire. We sent the questionnaire to remaining 77 of these exporters and we have only received any response from 57 so far. Those are also very vague answers,” he said.

If the exporters fail to respond within the next two weeks, Dr. Weerasinghe stressed that the CB would not hesitate to name and shame these exporters.

“To people (exporters) who are not responsive, we will be sending some more letters. However, if we don’t get a response in two weeks’ time, we are going to publish a list of people who are responding and not responding. I encourage you to not go into that level and support us with your cooperation,” he remarked.

In particular, Dr. Weerasinghe said it is in the best interests of the export community to salvage their reputation.

“As a friend of the industry, I would encourage you to come forward and fill us on these missing data points, whether you have spent this forex on fuel or any other inputs. Otherwise, the bad reputation will remain.

Your bad reputation is getting worse day-by-day, with the stories swirling around. Even today, when I was in Parliament, someone alleged that from 2007 to now, US $ 35 billion had been kept abroad by some exporters. I don’t believe in these figures. It’s good for your industry to counter such allegations. Come clean and say that you are not doing that. You have to be open and transparent,” he elaborated.

Further, he stressed that it’s critical for the Central Bank to gain access to the required data in order to make informed decisions related to exporters.

“It is in your best interest to let us know what’s happening. We need to understand what’s happening in order to make data-driven policy decisions. So, we can address your problems, which maybe in the regulatory sphere,” he said.

Pix by Pradeep Pathirana

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Comments - 15

Priyantha Kankanamge Thursday, 24 November 2022 07:28 AM

Mr Governor we have good respect on you. But if you try to pressure exporters it is not good for the country as they may shift business to other countries. Keep you pressure on government expenses and SOEs and will enhance your reputation

Go home Nandalal Weerasinghe the corrupter Thursday, 24 November 2022 07:53 AM

Publishing and making in public is by the idiot Nandalal Weerasinghe is like trying to take mafia like the Private Bus owner, confectionery maker and rice mill owners. Government and Nandalal Weerasinghe will find how their tyrannical ways has made fraud and corruption the norm in business. If the country is unfair democratically, all deceit is fair against the government.

sss Thursday, 24 November 2022 08:01 AM

Hey governor, how about shaming the importers who use dollars to import stuff and turn around and sell keeping huge margins. Also how about people who steal through corruption and convert the ill gotten rupees to housemaid earned dollars to import luxuries and send their kids abroad

Be Fair Thursday, 24 November 2022 08:41 AM

I think if we had a solid base, these exporters will not resort to such. Cant blame them in one hand?

Banker Thursday, 24 November 2022 10:37 AM

Exporters are following the way of the rogue Politicians who are hiding their ill gotten wealth in secret Accounts abroad. What is the logic in demanding the Exporters to repatriate their legal earnings ?

Jude Thursday, 24 November 2022 10:52 AM

Hey Nanda, what Have you done as head honcho of CB !??? In one word, Nothing!! You get in front of a podium and talk to some Dumass people with Financial Jargon and non of them understand what you said, then you start threatening entrepreneurs in SL who sacrificed their whole adult-life to build a export-orinted company employing millions of lankans!! You're a low life, low level bureaucrat and a bootlicker yeah!!

Adwani Thursday, 24 November 2022 11:28 AM

First it was Nandasena and now his great grand stooge Nandalal, this idiot must know that already he is named and shamed for remaining silent when the Nandasena and his Golyas were robbing from the USD reserves.

Aragalayek Thursday, 24 November 2022 12:12 PM

Tax them higher. They are the root cause of the problems today.

Chris Thursday, 24 November 2022 12:34 PM

First find out what happened to the dollars that were in reserve before 2019.He always avoids that question. Another big talker who has done nothing but peg the dollar to save his skin. No better than Cabraal.

SL Thursday, 24 November 2022 12:58 PM

Gvt provide Oil/Electricity and other infrastructures ,LC opening for exporters using USDs.It's the responsibility of exporters to bring the USDs they earn at least to compensate gvt expenditures on them!! it's an open secret that many exporters keep their USDs away from SL .why???

Raj Thursday, 24 November 2022 01:15 PM

Will anyone invest in an asset which is decreasing in value by the day?

Silva Thursday, 24 November 2022 01:17 PM

Mr, Nanda, you will never get positive response from anyone by way of threatening. Encourage people to get what you want. Further the cost of production is very high for export products now. So exporters make losses when it's converted to rupees. The main problem is pegging the dollar. Leave it to float or give some form of incentives to Exporters to convert their Dollars.

L Jaya Friday, 25 November 2022 04:19 AM

If the local content of exports stands at 23%, then it is justifiable to convert the proceeds at the same rate. As there is no stability of SLR, reconverting to dollars may require (most of the time) more Rupees. I remember, Nivad Cabrral's road map (Oct 2021) had same goals to convert 75% of proceeds, but never materialized. Therefore, stability of parity and easy re-conversion need to be established in my opinion.

Demuni Uduwara Friday, 25 November 2022 06:02 AM

It's crystal clear that 77% of export proceeds have not been reached Sri Lanka during the year ! Govt knowingly the "drama" well, is in deep sleep !

Dileepa Manawadu Saturday, 26 November 2022 03:50 PM

Good one! This has been going on for years. We have been wondering when is the central bank going to wake up. I can see some folks barking up on CB/governor. While there is much to be solved here, this one is a move to salut. It is not Only the politicians that are unethical. There are plenty bureaucrats and whether we like it or not there are many in the private sector. Its a myth that the private sector is all puritan.

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Nandalal cracks the whip on exporters

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