Published: 11:59 PM, 24 October 2026
Firm Steps Required to Gear Up Investment in Private Sector
Abdullah Al Imran
Private sector investment is one of the most important drivers of economic growth, employment generation, industrial development, and poverty reduction in Bangladesh. As the country strives to strengthen its economic foundations, create jobs for its growing workforce, and prepare for graduation from least developed country status, increasing private investment has become an urgent national priority. However, persistent structural weaknesses, policy uncertainty, high borrowing costs, inadequate infrastructure, and bureaucratic complications continue to discourage many entrepreneurs from expanding their businesses. To overcome these obstacles, the government must take firm, practical, and coordinated steps to create a favorable investment climate.
Bangladesh has made remarkable progress in economic development over the past few decades. The country has expanded its manufacturing base, increased exports, improved infrastructure, and developed a dynamic entrepreneurial community. The ready-made garment industry has played a significant role in this progress, while pharmaceuticals, agro-processing, leather goods, light engineering, information technology, and other emerging sectors offer considerable opportunities for diversification. Nevertheless, the economy cannot sustain strong and inclusive growth by relying on a narrow range of industries. Greater private investment is essential to broaden the industrial base, increase productivity, and develop new sources of export earnings.
One of the major obstacles to private investment is the high cost of doing business. Entrepreneurs frequently face expensive financing, unreliable utility services, complicated regulatory procedures, and delays in obtaining permits and approvals. Small and medium-sized enterprises are particularly vulnerable because they often lack sufficient collateral and have limited access to formal credit. The government should simplify business registration, licensing, taxation, and customs procedures through an integrated digital system. Reducing unnecessary paperwork and ensuring transparent, time-bound approvals would help investors devote more resources to productive activities rather than administrative formalities.
Access to affordable finance is another critical requirement. High interest rates, strict collateral requirements, and limited long-term financing discourage entrepreneurs from establishing new factories or expanding existing operations. Commercial banks must improve their capacity to assess viable business proposals, particularly those submitted by small and medium-sized enterprises. Bangladesh Bank should strengthen credit guarantee mechanisms, encourage responsible lending, and promote alternative financing options, including capital market instruments. A stronger bond market and greater participation by institutional investors could provide businesses with longer-term funds without placing excessive pressure on bank lending.
Policy stability is equally important. Investors generally commit substantial capital only when they have confidence that economic policies, tax regulations, import duties, and investment incentives will remain reasonably predictable. Frequent policy changes and inconsistent implementation can increase business risks and delay investment decisions. The government should consult business associations, chambers of commerce, economists, and other stakeholders before introducing major policy changes. Clear communication, consistent enforcement, and a predictable tax regime would help restore investor confidence. At the same time, tax administration should be modernized to broaden the tax base, reduce arbitrary practices, and ensure fair treatment of compliant businesses.
Reliable infrastructure and energy security are indispensable for industrial expansion. Although Bangladesh has made significant investments in roads, bridges, ports, and power generation, businesses still face challenges involving logistics costs, congestion, gas shortages, and the reliability of electricity supplies. Delays at ports and inefficient transport networks increase production costs and weaken export competitiveness. The government should prioritize maintenance, improve port management, strengthen railway and inland waterway connections, and ensure dependable energy supplies. Greater investment in renewable energy and energy-efficient technologies would also reduce long-term costs and support environmental sustainability.
Bangladesh must also strengthen its institutional capacity to attract both domestic and foreign investment. Corruption, regulatory uncertainty, land acquisition difficulties, and lengthy dispute resolution procedures can undermine investor confidence. Stronger accountability, transparent public procurement, and effective enforcement of contracts are therefore essential. Special economic zones should provide genuine advantages through reliable utilities, efficient customs services, and accessible logistics facilities. Foreign investors should receive equal and predictable treatment, while domestic entrepreneurs should be protected from unfair competition and unnecessary regulatory burdens.
Human capital development deserves similar attention. Modern industries require workers with technical knowledge, digital skills, managerial expertise, and problem-solving abilities. Yet gaps between educational outcomes and industry requirements often prevent businesses from finding appropriately skilled employees. Closer cooperation among educational institutions, technical training centers, and private companies can help align training programs with market demand. Apprenticeships, industry-based training, and research partnerships would improve workforce productivity and encourage investment in higher-value industries.
Abdullah Al Imran studies Software
Engineering in Green University
Bangladesh, Dhaka.
