Deliver National Library or be sanctioned, Alausa warns contractors

Education Minister Tunji Alausa has warned contractors and consultants handling the National Library project against further delays and substandard work.

The minister warned that those who fail to meet agreed delivery targets will face sanctions.

Alausa, at a meeting with the contractors, consultants and officials of the Library in Abuja yesterday, said the Federal Government was ready to provide the necessary funding but would demand accountability and value for money.

‘This is a change day. We will make you accountable for the timelines we’re going to set for ourselves,’ the minister told the stakeholders.

He said in a statement by his Special Adviser (Media and Communications), Ikharo Attah, that the government would establish realistic delivery timelines and hold contractors and consultants accountable if they failed to meet the conditions contained in their agreements.

‘If you’re not meeting your guidelines and the timelines, I’m sorry, you’ll be penalised,’ he warned.

Alausa disclosed that the project had been divided into two major components-physical infrastructure and furnishing- for work to progress simultaneously.

He assured the contractors that the government would provide funds for the project, but stressed that funding would be tied to performance, quality and compliance with agreed standards.

The minister said the renewed push to complete the National Library reflected President Bola Ahmed Tinubu’s commitment to education and human capital development.

He described the National Library as more than a physical structure, saying it remained a critical national institution for learning, research, knowledge development and human capital development.

Alausa recalled that the National Library was conceived in 1981, while construction commenced in 2006 with an initial 24-month completion period.

He praised the First Lady, Senator Oluremi Tinubu, for her contribution to efforts to complete the facility.

Tinubu celebrates Pate on birthday

President Bola Ahmed Tinubu has congratulated the Coordinating Minister of Health and Social Welfare, Prof. Muhammad Ali Pate, on his birthday.

He praised his contributions to the transformation of Nigeria’s health sector through the Renwed Hope Agenda(RHA).

The President, in a statement yesterday by his Special Adviser on Information and Strategy, Bayo Onanuga, described Pate as a distinguished and globally- acclaimed health professional whose leadership has advanced his administration’s health and social welfare agenda.

Tinubu particularly highlighted the revitalisation of more than 3,100 Primary Healthcare Centres across the country and the reorganisation of the Basic Health Care Provision Fund (BHCPF), which he noted has enabled more than 37 million Nigerians to access basic healthcare services.

He also cited the ongoing upgrade of health facilities nationwide as evidence of the transformation being recorded in the sector under the RHA.

According to the President, his administration’s investments in healthcare infrastructure and manpower include the establishment of three oncology centres across the geopolitical zones as part of efforts to reduce outbound medical tourism.

He added that more than 20,000 health professionals had also been recruited into federal tertiary hospitals to cushion the effects of brain drain, while over 78,000 frontline health workers have been trained to improve the quality of primary healthcare delivery.

Tinubu further pointed to the vaccination of more than 17.1 million adolescent girls against the Human Papillomavirus (HPV) to protect them from cervical cancer as another major intervention undertaken in the sector.

The President also commended Pate for efforts to attract investments into Nigeria’s healthcare value chain and pharmaceutical industry through the Presidential Initiative for Unlocking the Healthcare Value Chain (PVAC).

According to him, the initiative has so far secured a project pipeline worth more than $5 billion, reflecting growing investment interest in the country’s healthcare industry.

Tinubu said the interventions under Pate’s leadership were helping to strengthen healthcare delivery, expand access to essential services and build the manpower and infrastructure required for a more resilient health system.

‘As Pate celebrates this auspicious day, the President joins family, friends, and associates to wish him good health and renewed strength as he continues to serve the nation diligently’, he added.

Adamawa Gov’t Suspends Schools Board Boss

The Adamawa State Government has announced the suspension of the Executive Secretary of the state’s Post Primary Schools Management Board, PPSM, Mr Birsan Penuel, over alleged irregularities in the discharge of his official tasks.

Chief Press Secretary to Governor Ahmadu Umaru Fintiri, Humwashi Wonosikou, disclosed the suspension on Sunday in Yola, stressing that the suspension is to allow for a thorough investigation in the matter.

Wonosikou explained further that, in the interim, the most senior director in the Board has been directed to take over its affairs and ensure the uninterrupted continuation of its activities.

He said, ‘This administration remains committed to sanitising and repositioning the education sector for improved service delivery.

‘The measures put in place by this administration over the last seven years, including the massive recruitment of qualified teachers, rehabilitation and construction of classrooms, provision of instructional materials, and regular payment of salaries and allowances, have helped reverse the negative trends that once bedevilled the sector.’

Preaching compassion, one meal at a time

She came to Uganda for a pastors’ conference. Then Dr Michelle Corral took her ministry into Kampala’s slums and set her sights on Bidi Bidi, where shrinking humanitarian funding is putting pressure on refugee health services.

In Bidi Bidi Refugee Settlement, roughly one in 10 children under five is acutely malnourished. Malaria still accounts for the majority of outpatient visits at the settlement’s clinics. And since March 2025, when the United States terminated most USAID contracts, the health system has lost 250 workers and watched antimalarial medicines pile up in warehouses, unable to reach health facilities.

Into this landscape steps Dr Mitchell Corral, an American televangelist, whose ministry is trying to bridge the gap between pulpit and clinic. Corral has spent nearly five decades building a ministry centered on pastor training and cross-border leadership, with a network that spans seven East African countries and claims to have equipped more than 10,800 pastors. Her arrival in Uganda was not a spontaneous detour; it was part of a scheduled conference circuit that has brought her to the region repeatedly. But her decision to move from conference halls to informal settlements represents a shift in how her ministry operates on the ground.

Dr Corral arrived in Uganda last week for the third East Africa Pastors’ Fire Anointing Conference at Nsambya Sharing Hall, an event that drew church leaders from across the region. Vice President Jessica Alupo spoke on behalf of President Yoweri Museveni, noting that private initiatives which extend practical support to disadvantaged communities help build resilience. Museveni, for his part, challenged the church to use its platforms to lift believers out of poverty. But for Corral, the real work began after the conference ended.

From sermons to slums

Last weekend, Corral led a team of pastors into Katanga, one of Kampala’s most crowded informal settlements. They distributed household items, clothes, shoes, and children’s toys. They also served meals to more than 5,000 residents. For families in Katanga, where daily survival often means navigating open sewers, erratic work, and no formal health access, the visit offered something rare: a full stomach and a moment of relief.

Katanga sits on a wetland between Kampala’s industrial zone and the wealthier neighborhoods of Kololo and Nakasero. An estimated 20,000 people live in cramped, makeshift structures with no running water, no waste collection, and no permanent health clinic. Residents who fall sick typically self-medicate or travel to Mulago national Referral Hospital, a journey that can take hours on foot or cost more than a day’s wages in boda boda fares. Corral’s team did not bring medical supplies or set up a clinic. They brought food, clothing, and household goods, then left the same afternoon.

But Katanga is not the only community on Corral’s mind. She has singled out Bidi Bidi Refugee Settlement in Yumbe District for her next phase of humanitarian support, praising Uganda’s open-door refugee policy as a reflection of Christian values while acknowledging the strain it places on the country’s resources.

‘I am really happy that this nation continues providing an opportune moment for refugees to be safe and rebuild their lives despite the challenges associated with hosting large numbers of displaced people,’ Corral said.

The health crisis

Uganda hosts approximately two million refugees and asylum seekers, making it the largest refugee-hosting country in Africa. Most come from South Sudan and the Democratic Republic of Congo. Since 2022, more than 550,000 new arrivals have crossed the border, including over 80,000 Sudanese fleeing conflict since April 2023.

The burden has fallen heavily on the country’s health system. Acute malnutrition has risen from 5.4 percent to 7.8 percent across 12 of Uganda’s 14 refugee locations. The World Food Programme, which was assisting 1.6 million refugees in early 2025, now reaches only 663,000. At Bidi Bidi, where Corral has pledged to direct her next efforts, residents still face poor sanitation, unpredictable food supplies, and difficulty accessing clinics. Some mothers walk two hours on foot to get their children vaccinated.

Bidi Bidi was established in 2016 as a temporary reception centre for South Sudanese refugees. It has since grown into one of the largest refugee settlements in the world, with a population that now exceeds 250,000. The settlement’s health facilities are meant to serve a population of roughly 50,000 per clinic, but staffing shortages and drug stockouts have left many residents waiting for hours only to be told that basic treatments are unavailable. The clinics that do function often run on a combination of government funding, United Nations support, and whatever non-governmental organizations can still provide.

The mental health toll is equally stark. Refugees are ten times more likely than the general population to experience depression symptoms. In Bidi Bidi, rising suicide rates have alarmed local health workers.

Ministry on the front lines

Corral is not the first faith leader to arrive in Uganda with a mandate to help. Over nearly five decades of ministry, she has equipped more than 10,800 pastors across seven East African countries. She was recently honored with the Selfless Servant Global Impact Award from the Hosanna Broadcasting Network for cross-border leadership.

But in Uganda, the metric that matters is not awards. It is whether the 5,000 meals in Katanga and the promised supplies for Bidi Bidi can offer more than temporary relief in a system that is losing capacity by the month.

President Museveni and First Lady Janet Museveni have welcomed her support, recognising the growing reality that faith-based organisations have become an unofficial pillar of Uganda’s refugee response. As international aid contracts are terminated, and clinics lose staff, pastors and ministry teams have increasingly found themselves on the front lines of a public health crisis they were never trained to manage.

This is not a new pattern. For years, Uganda’s health system has relied on a patchwork of government clinics, NGO-run facilities, and faith-based organizations to serve both citizens and refugees. When international funding contracts, churches and mosques often step in to fill gaps they are not equipped to handle. They distribute food, offer counseling, and sometimes provide basic first aid. What they typically do not provide is the sustained clinical care, diagnostic testing, and pharmaceutical supply chains that chronic malnutrition and endemic malaria demand.

The question of scale

At Bidi Bidi’s health clinics, malaria still consumes the majority of outpatient consultations. Malnutrition screening programs have scaled back. And with international funding evaporating, the number of health workers on the ground has dropped.

Dr Corral’s ministry is not equipped to run a malaria clinic. But in a settlement where mothers walk hours for vaccines and where thousands of children are malnourished, her arrival highlights a deeper question: as Uganda’s refugee health system approaches the brink, who will step in when the international funding dries up, and will individual charity be enough?

She has called on the Church to complement government efforts by translating messages of compassion into tangible interventions. She urged Christian leaders to look beyond preaching and actively participate in initiatives that improve the lives of refugees.

For now, Corral has pledged to return. The refugees in Bidi Bidi, like those in Katanga, will be waiting to see what that promise looks like in practice. And the health workers left behind will keep treating malaria with dwindling drugs, screening children for malnutrition with shrinking rations, and wondering whether the next shipment of antimalarials will ever make it out of the warehouse.

Uganda Clays is profitable again: Can it finally put its troubled years behind it?

Uganda Clays wants investors to believe 2026 is the year the company stops falling and starts compounding.

The clay building materials manufacturer made Shs19.8b from sales in the first half of 2026, 32 percent more than the same period last year.

After paying for raw materials, wages, and everything else it takes to run the factories, what was left over, which is the operating profit, grew more than 20 times to Shs6.4b.

And once loan interest and tax were also paid, the company ended the six months with Shs3.05b in its pocket, compared to a loss of Shs1.4b over the same period a year before.

Board Chairman Martin Kasekende says the company achieved ‘a significant turnaround in its performance from years of decline or stagnation between 2022 and 2024, now to profitability.’

Uganda Clays’ revenues were 7 percent above target, and profit after tax was just half a percentage point ahead of plan.

Those are the more conservative numbers, since the eye-catching year-on-year growth rates (32 percent revenue, 322 percent profit) are measured against a first half of 2025 that was close to break-even to begin with.

Kasekende says that ‘although the company recorded net profit of Shs3.05b during the period, the board of directors has not proposed an interim dividend to preserve cash for the ongoing operational recovery and investment.’

In 2024, Uganda Clays posted a loss, so skipping a dividend was automatic.

In 2025, it actually returned to profit, posting a net income of Shs141.7m, and the board still chose not to pay anything out, opting instead to hold the cash for the turnaround already underway.

Inside the profit

The company did not just sell more. It also got much better at not spending money it didn’t have to.

This is the more important half of the story, because a factory can sell more tiles every year and still lose money if its costs rise even faster, which is what had been happening at Uganda Clays for years.

What changed this half-year is that costs grew slower than sales: total costs fell to Shs13.7b from Shs14.7b, even as the amount of product sold rose 52 percent.

Once a factory has paid for its machinery, its land, and its core staff, costs that stay the same whether it makes 10 tiles or 10,000, every additional tile sold becomes cheaper to make and more profitable to sell.

Economists call this operating leverage, and it is a large part of why a 32 percent rise in sales could turn into a profit swing of more than Shs4b.

Once the fixed costs were covered, most of the extra money coming in dropped straight to the bottom line.

Jones Muhumuza, the managing director, says the half-year is not a single win but several things pulling in the same direction at once.

‘What drove the turnaround,’ he says, was ‘strong operating performance and margin expansion, supported by disciplined cost management.’

The company, in essence, can cover all of its costs with what it made because its revenue in the half-year results was Shs19.8b while its total costs were Shs13.7b.

Most of the fall in costs is in administration. The average number of people the company employed fell to 221 in 2025 from 282 in 2024, a 22 percent cut, almost entirely in production, where staff numbers dropped from 190 to 105.

Over the same period, output per worker rose 52 percent, nearly matching the rise in production volumes exactly.

This means that the same jump in output was achieved with far fewer hands on the factory floor.

Muhumuza explains this, noting that: ‘It is being efficient and ensuring that each unit of cash that you have should be able to produce much more.’

The cost discipline is, in essence, a smaller workforce producing more.

Debt won’t quiet

Even as the core business improved, the interest the company pays on money it borrowed years ago grew faster than almost anything else.

Finance costs rose 21 percent to Shs2.06b in the first half.

This is old debt owed to NSSF, dating back to 2010, that financed the company’s Kamonkoli factory and now stands at Shs25.3b.

Economists sometimes call this a debt overhang where money is still being repaid for a decision made more than a decade ago, sitting on top of a business that has since moved on, eating into the profit that would otherwise stay with shareholders.

Muhumuza told investors the company plans to get ahead of it.

‘We are going to start paying NSSF beginning next quarter, which is October 2026, ahead of schedule,’ he said, adding that starting early would let the company finish paying by ‘2031 against 2034, as per the agreed schedule.’

Kamonkoli’s real fix

The Kamonkoli factory in eastern Uganda has long been treated internally as the company’s biggest headache because it was a half-finished plant that cost more to run than it earned.

The half-year results suggest the day-to-day running of the factory has genuinely improved.

But that is only half the picture because once the cost of servicing the factory’s debt is counted alongside its running costs, the full financial story becomes more complicated.

Kasekende says the factory’s kilns ‘were originally designed to be fired with petroleum gas,’ a fuel that became ‘very expensive’ as oil prices rose.

The company responded by ‘changing the source of fuels to biofuels,’ mainly coffee husks.

This is a good alternative but imperfect as well because there is rising demand for husks from cement makers, which is now making this material pricey.

Kasekende says the kiln itself had been left unfinished at 63 metres when the company ran out of construction money years earlier, and was extended to about 93 metres using the company’s own cash, letting more product bake through the same process and improving both output and quality.

Kamonkoli sold slightly less in 2025, but profit from running the factory jumped more than eightfold, from Shs176m to Shs1.47b.

Same output, lower cost, more profit, just what the fuel and kiln fix should do.

That combination matters because it means the improvement came from running the plant more cheaply, not from selling more, exactly as Kasekende described.

How market prices

Uganda Clays’ share price has moved up sharply this year, proof that the market believes in the turnaround.

Uganda Securities Exchange data shows that Airtel Uganda, NIC, Stanbic, and Uganda Clays are some of the counters that led the market’s gains, with Uganda Clays up 42 percent in terms of the price over the past 12 months.

The stock has moved from Shs5 per share at the start of 2026 to Shs7.7 by September 4, moving the company’s market valuation from Shs4.5b to Shs6.93b.

Uganda Clays’ price-to-earnings ratio, which is how many years of current profit it would take to earn back what you paid for a share, improved to 2.27 times, based on annualized half-year’s profit.

More importantly, this move happened on almost no trading.

Uganda Clays’ stock changed hands in just 65 deals over the period, worth Shs57.5m out of a market-wide Shs101.8b, 600th of 1 percent of everything traded on the exchange.

With so few buyers and sellers, a single trade can shift the price sharply, because there isn’t enough competing buying and selling activity to settle on a steadier number.

A 42 percent jump built on 65 trades says more about how rarely this stock changes hands than about how strongly the market as a whole believes in the turnaround.

Even after the rise, Uganda Clays trades at just 0.14 times its book value, meaning the market values the entire company at a small fraction of what its own assets are worth on paper once debts are subtracted, while trading at 49 times trailing earnings.

This is a very high multiple that mostly reflects how tiny last year’s profit was to begin with, rather than genuine excitement about future earnings.

The company’s market capitalization of Shs6.9b, the value of all its shares added together, is a sixth of its own shareholder equity of Shs41b.

That gap is the market’s way of saying it isn’t fully convinced this is a lasting recovery yet, even as the price moves in the right direction.

A watchlist stock

Uganda Clays is not the only stock on the exchange being watched for the same reason: a business whose true value looks held back by one specific, nameable problem, rather than by weak performance across the board.

In investing, these are sometimes called special-situation stocks.

These are companies where the price mainly reflects a single identifiable risk, and removing that risk is what could unlock the value the market is currently withholding.

DFCU Limited, one of Uganda’s largest banks, is a clear example.

It has just reported a half-year loss of Shs15.8b, reversing a Shs34.5b profit a year earlier, after legal costs tied to a long-running court case in London rose to Shs76.6b in 2025 from Shs42.3b the year before.

The case, brought by the defunct Crane Bank and its former shareholders, challenges the 2017 transfer of Crane Bank’s assets to DFCU after Bank of Uganda took over the failed lender.

It goes to trial in London starting in October 2026 and is expected to run into January 2027.

DFCU maintains its core banking business remains sound, and that the loss reflects an exceptional legal cost rather than any weakness in day-to-day operations.

NIC Holdings presents a different kind of overhang: ownership.

Cornerstone Asset Managers is acquiring 73 percent of the insurer through a vehicle called Twenty-One Ventures, taking over from its longtime Nigerian majority shareholder.

The move has already brought a new board and a new chief executive, Dan Musiime, who started in July, and Cornerstone has committed Shs50b toward rebuilding the company’s technology and operations.

As with Uganda Clays, shareholders have been asked to forgo dividends while the transition plays out.

Market analysts consulted for this article grouped all three stocks for the same reason.

Each carries a specific, disclosed problem like a legacy debt schedule, a foreign lawsuit, a change of controlling shareholder that has kept its share price lower than its underlying business might otherwise justify.

Should any of those problems be resolved, they argue, there is real room for the share prices to re-rate upward.

That all three stocks have already started moving before any of those resolutions are confirmed suggests the market is beginning to price in that possibility in advance, rather than waiting for certainty.

This is a pattern common to how markets treat unresolved risk generally, where prices start moving on the probability of good news well before the news itself arrives.

MCC library in UK accepts Ranjit Fernando’s memoirs ‘Hobnails To Spikes’

Well known former Sri Lanka Cricket Vice Captain, manager, coach, selector and commentator Ranjit Fernando’s beautifully written Memoirs ‹ Hobnails to Spikes ‹ has been accepted by the prestigious MCC Library in the United Kingdom.

It covers an interesting period, when Sri Lanka emerged from Non Test playing status to one of the best teams in the cricketing world in all formats by the turn of the millennium.

The presentation of the book was made by his brother Sunil Fernando, who had the honour of leading the Invincible 1964 Champion Cricket Team , in which Ranjit playing under his younger brother , won the Schoolboy Cricketer of the Year Award. In 1964 , St. beat S. Thomas›, Royal , St. Joseph›s , St. Peter›s , St. Anthony›s Kandy outright and St. Sebastian›s , Ananda in the first innings, in the 7 matches they played that year.

The acceptance of the book to the prestigious MCC Library is a rare honour for Ranjit, St. Benedict›s and Sri Lanka.

Ogilvy Group tops awards tally at Dragons of Sri Lanka 2026

Ogilvy Group Sri Lanka delivered a standout performance at the recently concluded Dragons of Sri Lanka 2026 Awards, securing a total of nine awards comprising two Gold Dragons, one Silver Dragon and six Black Dragons, among the festival’s highest overall award tallies.

Gold Dragon wins for Phoenix Ogilvy and Ogilvy Digital, together with the seven additional recognitions across multiple categories, highlighted Ogilvy’s ability to combine creativity, strategic thinking and commercial effectiveness to deliver business results.

Organised by the 4As Sri Lanka, the third edition of Dragons of Sri Lanka shortlisted more than 50 agencies and corporates, making it one of the country’s most competitive marketing communications awards. These local awards, along with the chapters in Malaysia and Pakistan are part of the Dragons of Asia platform, one of the region’s leading programmes for marketing communications effectiveness, with entries being judged on strategy, originality, execution and measurable results.

Ogilvy Digital accounted for eight awards in total, including a Gold Dragon in the Business and Trade Marketing category, and a Silver Dragon in the Innovative Idea or Concept category. The Agency additionally received six Black Dragons across the categories of Innovative Idea or Concept, Business and Trade Marketing, Content Creation, Small Budget, Event or Experiential, and Brand Trial or Sales Generation.

Ogilvy Digital Chief Operating Officer Sajith Weerasinghe said: ‘These recognitions reflect the breadth of capabilities we’ve built across strategy, creative, content, experience design, technology and performance marketing. The fact that the work was recognised across so many different disciplines demonstrates our ability to apply creativity to a wide range of business challenges and objectives. We’re proud that this achievement spans multiple clients, categories and types of work, reflecting both the versatility of our people and our commitment to delivering results.’

The Ogilvy Group’s second Gold Dragon win was Phoenix Ogilvy’s recognition in the Product Launch or Re-Launch category for the relaunch of American Premium Water. It was a multi-dimensional campaign which refreshed the identity and rejuvenated the positioning of one of Sri Lanka’s pioneering bottled drinking water brands, bolstering its 30-year heritage while connecting with a new generation of consumers.

Phoenix Ogilvy Chief Operating Officer Siddhartha Roy said: ‘There’s always something special about reimagining a brand with a rich heritage. American Premium Water has been a trusted name in Sri Lanka for more than three decades, but the challenge was to make it relevant and compelling for a new generation of consumers. We created a new blueprint for growth for the brand’s positioning, proposition and visual identity, and manifested it through design, packaging and storytelling. To see that transformation recognised with a Gold Dragon, and more importantly reflected in the brand’s renewed momentum in the market, makes this a particularly rewarding achievement.’

The Ogilvy Group Sri Lanka operates across multiple marketing communication disciplines and comprises over 290 staff in creative, strategy, digital, media, public relations and integrated communications. As part of the global Ogilvy network, the Group partners with leading local and international brands to create integrated campaigns that build brands, influence behaviour and drive business growth.

Kites Global wins Gold and Bronze at Dragons of Sri Lanka 2026

Kites Global is a full-service creative and digital agency that partners with brands to turn business challenges into ideas that create meaningful impact. By bringing together strategy, audience insight, creativity and digital execution, we focus on developing work that not only connects with people, but also delivers against clear business objectives.

This approach was recognised at the Dragons of Sri Lanka 2026 Awards, where Kites Global secured a Gold and a Bronze for two campaigns created in partnership with clients.

Leading the recognition was HNB Life’s ‘Like for Life’, which won Gold in the Small Budget category. Using just seven social media Reels, the campaign challenged misconceptions surrounding life insurance and made financial protection more relevant to younger audiences. The campaign reached over 2.29 million people, generated over 5.32 million impressions, and contributed to a record-breaking 42% sales increase, the highest annual growth in HNB Life’s history.

DSI USofto’s Teachers’ Day 2025 campaign also received a Bronze Award in the Content Creation category. Built around the unseen sacrifices teachers make beyond the classroom, the campaign used emotional storytelling to transform criticism into gratitude. It generated 11.5 million+ video views, reached over 4.8 million people, and achieved over 399,000 engagements, while also contributing to increased gift voucher performance.

Kites Global said these awards represent more than recognition. ‘They reflect our ability to look beyond the brief, uncover the insight that matters and turn it into creative work that delivers real results. From strategy and creative development to digital execution and performance, our focus remains simple: creating ideas that move people and move business,’ the company added.

Union Bank partners SLBFE to promote ‘Ethera Diriya’ housing loans

Union Bank reinforced its commitment to overseas Sri Lankan workers by signing a Memorandum of Understanding with the Sri Lanka Bureau of Foreign Employment (SLBFE) to promote the Ethera Diriya housing loans offering loans up to Rs. 10 million with repayment terms spanning up to 10 years to support migrant workers seamlessly convert their foreign earnings into secure, long-term family homes. The MoU was formalised by SLBFE Chairman Koshala Wickremasinghe (centre left) and Union Bank Chief Business Officer Asanka Ranhotty in the presence of officials from SLBFE and Union Bank.

Crisis fatigue, shifting demand and rising rivals impacting Sri Lanka apparel

Sri Lankan apparel manufacturers have fallen behind regional competitors on automation and technology adoption, not for want of capability but because the industry has spent much of the past decade absorbing one crisis after another, Joint Apparel Association Forum (JAAF) Secretary General Yohan Lawrence said.

Speaking at a recent First Capital Research Stock Talk podcast on ‘Global Trade Reset: What It Means for Sri Lanka’s Apparel Industry,’ Lawrence said that from the end of the civil war to the pandemic and the 2022 economic collapse, successive shocks had left the industry with little capital or management bandwidth for upgrading production lines.

He pointed to China, where higher labour costs are offset by substantially higher labour productivity, itself a result of sustained investment in automation and new technology. Closing that productivity gap, he said, would help offset Sri Lanka’s structural cost disadvantages as a small, non-scale producer.

Lawrence described the push to get both new and existing manufacturers investing in automation as a ‘quick win’ for the industry, adding that the JAAF was exploring possible incentive schemes with the Government to encourage such investment, alongside separately flagged gaps in renewable energy adoption that some international buyers are increasingly using as a sourcing criterion.

On demand, Lawrence said Sri Lanka’s apparel exporters had benefitted from a global consumer shift towards athleisure, a category he said the island was well-positioned to capture given its existing expertise in lingerie and technical garment construction. Combined with continued strength in infant wear and children’s wear, and a retreat from the declining formal wear segment, he said the country’s current product mix was broadly the right one.

That positioning, however, sits atop consumers with less spending power. With US inflation running close to 4.5%, oil prices near $ 120 a barrel, and similar pressures building in the UK, Lawrence said apparel purchases are discretionary rather than essential and are among the first casualties of a domestic cost-of-living squeeze.

Faced with tighter budgets, buyers will trade down, he said, weighing whether to pay $ 17 for a garment from an established, higher-cost origin such as Sri Lanka or $ 12 for an unbranded alternative from an unproven source. For a country positioned at the premium end of global sourcing, he said a sustained squeeze on Western household budgets posed a direct risk to order volumes, independent of tariff or trade policy.

Lawrence also flagged a revival of interest in African apparel manufacturing, with Egypt cited as the most prominent example given its proximity to Western markets, as both a competitive threat and an expansion opportunity for the Sri Lankan industry. He attributed the shift primarily to trade preference arrangements such as the African Growth and Opportunity Act (AGOA), rather than any inherent manufacturing advantage, noting that Africa lacks the deep pool of skilled garment labour built up over decades in Asia.

Rather than viewing the trend purely defensively, Lawrence said a number of Sri Lankan apparel companies already operate manufacturing bases in Africa, giving them the flexibility to offer international brands a choice of sourcing locations depending on trade terms and cost.

He drew a parallel with Sri Lankan investment in India, driven by that market’s own domestic sourcing requirements, arguing that the industry’s long-term competitiveness will depend on maintaining a compelling enough domestic offer that Sri Lanka remains a preferred base even as manufacturing capacity diversifies globally.