$23 billion export earnings vanish into thin air
Startling discrepancy in export earnings has come to light as the authorities have recently wiped out export records worth $23.34 billion.
The Export Promotion Bureau (EPB) initially reported $93.14 billion in exports for the first 10 months of the fiscal year 2023-24 and the same period in 2022-23.
In a surprising twist, the central bank has recently claimed that exports were only $69.80 billion during the period, which is down by $23.34 billion or 25 per cent from the previous figure.
On the condition of anonymity, multiple officials of the bureau admitted that their export data have been erroneous for the past two to three years.
The authorities concerned did not provide any explanation for the discrepancy, while business leaders said it substantiated their longstanding suspicion on intentional ballooning of export figures. The inflated figures misguided the policymakers and affected the businesses eventually.
Economists, however, appreciated the move to accept the reality and disclose the actual data on export earnings. Since exports data are crucial for the balance of payment and foreign currency exchange rate, they welcomed the 'positive' initiative, though it is already late.
The EPB officials kept mum on the massive discrepancy. On the condition of anonymity, some of them admitted that the export data have been erroneous for the past two to three years.
The wrong estimates have tarnished our image. The actual exports were inflated through inclusion of other estimates. The stimulus for the export of ready-made garments might have been downsized considering the inflated export figures
While explaining the issue, some central bank officials said they have so far been depending on the EPB data to estimate export earnings. But the actual earnings were consistently falling short of the desired figures, and the central bank faced questions from local and international agencies in this regard.
Against such a backdrop, the export data were verified and the actual exports were found lower than the reported figures. From now on, the export reports will be prepared with actual data and the revenue board (NBR) and the EPB will use the same figures, they added.
As per the actual export data, the central bank recalculated the balance of payment on Wednesday and saw the financial account turning from a deficit to a surplus. The current account fell in deficit due to the export data fluctuations. Besides, there has been a $5.56 billion deficit in the balance of payment during the July-April period of the fiscal year 2023-24.
According to the EPB, exports were $45.67 billion in the first 10 months of the last fiscal year, 2022-23, but the central bank found the figure to be $36.13 billion, down by $9.54 billion.
According to the EPB, exports were $45.67 billion in the first 10 months of fiscal year 2022-23, but the central bank found the figure to be $36.13 billion, down by $9.54 billion.
Similarly, the EPB claimed $47.47 billion in exports for the first 10 months of 2023-24, while the central bank reported $33.67 billion for the time, showing a $13.80 billion shortfall.
This correspondent visited the office of EPB vice chairman Anwar Hossain on Thursday afternoon, to collect their explanation on the discrepancy. He could not be reached there as multiple staff said he went to the commerce ministry for an emergency meeting.
Alongside flaws in reporting, non-repatriation of export proceeds is another significant reason behind the discrepancy in figures.
Attempts to reach him over the phone remained unsuccessful. As no other officials could not be contacted, the official explanation of the EPB has still been missing.
Ready-made garments constitute some 84-85 per cent of the country's total exports. Garment exporters have been expressing doubts over the EPB export figures since the middle of the fiscal year 2022-23.
Some exporters said their purchase orders declined significantly amid rising inflation on the onslaught of the Russia-Ukraine war. Some 20-30 per cent of their production capacity remained unused, and it impacted the country’s overall exports adversely.
But the EPB showed a 10 per cent growth in garment exports following the fiscal year 2022-23, contrasting sharply with the NBR that estimated a 4 per cent decline in exports. There was a $8.47 billion discrepancy in export figures of the EPB and the NBR.
For the just concluded fiscal year, the central bank estimated $29.68 billion in exports in the first ten months, while the EPB claimed the amount to be $40.49 billion.
SM Mannan, the president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Prothom Alo that they have long been casting doubts about the EPB export data, and it has been substantiated through the revelations of the central bank and the revenue board.
“The wrong estimates have tarnished our image. The actual exports were inflated through inclusion of other estimates. The stimulus for the export of ready-made garments might have been downsized considering the inflated export figures,” he said.
Asked about the issue, the research director of the Centre for Policy Dialogue (CPD), Khondaker Golam Moazzem, said it shows that there still persists some confusion over data. The central bank initiative, however, is positive, though it is late.
“Alongside flaws in reporting, non-repatriation of export proceeds is another significant reason behind the discrepancy in figures. There is a scope to bring back the export earnings if the calculations are done on the basis of letter of credit (LC),” he added.
This report first appeared on the print edition of Prothom Alo and has been rewritten in English by Misbahul Haque.