DCCI Head Highlights Key Challenges in Industry: Bank Fund Shortages & Energy Crisis

Monetary Policy DCCI

The most pressing challenges facing industries over the past six months have been the scarcity of bank funding and ongoing issues with gas and electricity supply, according to Ashraf Ahmed, President of the Dhaka Chamber of Commerce and Industry (DCCI).

Speaking at a seminar titled “Bi-economic State and Future Outlook of Bangladesh Economy – Private Sector Perspective,” organized by the DCCI on September 28, Ahmed stated, “We are still grappling with gas and electricity shortages. If we cannot address the issues of labour unrest and energy shortages, and fail to keep factories operating continuously for at least four hours a day, it will severely impact exports.”

Ahmed further noted that production in Micro, Small, and Medium Enterprises (MSMEs) is also declining. He warned that if these challenges persist, they would not only affect export levels but also significantly harm employment.

Impact on Non-RMG Sectors and the Importance of Alternative Solutions
The DCCI president emphasized that the crisis extends beyond the ready-made garment (RMG) sector, severely impacting non-RMG sectors as well. “We are already hearing that gas reserves are depleting. However, if the nuclear power plant is connected to the grid by the end of this year, there may be a positive shift. Immediate alternative measures are critical to overcoming this situation,” he added.

Ahmed also highlighted that labour unrest, initially confined to Ashulia, has now spread to other regions, raising concerns about its potential to disrupt industrial stability further.

Threat to Investment and Call for Confidence Restoration
Addressing the broader economic outlook, Ahmed stressed that restoring confidence in resolving the energy and labour crises is vital for maintaining investment levels. He warned that private sector investment growth, which has remained around 24% over the past three to four years, could face setbacks if confidence is not rebuilt.

Financial Reforms and Economic Stability
In his address, Ahmed pointed out that the interim government had proposed several financial reforms aimed at stabilizing the economy. “If these reforms are properly implemented, they will positively influence the economy, although it may take time to see results. Increasing tax revenue is also crucial for improving the government’s capacity to repay international debts, so revenue collection should be prioritized,” he noted.

Ahmed also remarked on Bangladesh Bank’s efforts to curb inflation by raising the policy rate. However, he cautioned that the effects of this measure would take three to six months to materialize. He also highlighted the need for careful handling of reforms in the banking sector, particularly for the 10 to 12 weak banks under scrutiny, to avoid negative consequences for the entire industry.

Recommendations for Industry and MSMEs
In his concluding remarks, the DCCI president recommended that bank loans to the industrial sector and MSMEs should be maintained at a consistent, normal level to ensure the stability and growth of these sectors.

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