Last year, according to data from the Central Bank of Bosnia and Herzegovina, foreign investors invested 1.7 billion BAm in our country, which is 233 million BAM more than the year before. Most of the investments were in trade, banking and the energy sector. However, one of the observations of economic experts is that the increase is not essential but only in terms of value.
Foreign investments are 16 percent higher last year compared to 2022.
Direct foreign investments in our country last year amounted to one billion and 708 million BAM, which is BAM 233 million more than in 2022 and almost twice as much as in 2020.
Several countries and sectors in which investments were made stand out according to the amount of investment.
“The countries that invested the most in Bosnia and Herzegovina are Russia, the Netherlands, then Croatia, Great Britain and Turkey. As for the investment sectors in which the largest inflow of foreign investments is registered, it is the sector of financial and service activities, then production, trade and others” , says Jasmina Penava from the Agency for the Promotion of Foreign Investments in Bosnia and Herzegovina.
Although, looking at the statistical data, one could conclude that Bosnia and Herzegovina is becoming an attractive investment destination, according to economists, the amount of foreign investments is not something we can boast about. The growth of investments, they believe, is primarily the result of inflation, but also accounting acrobatics where foreign-owned companies reinvest their profits made in Bosnia and Herzegovina as an investment.
“We need to have a much bigger increase when it comes to foreign investments, which should be expressed in billions, in order to be able to say that we have done something. But again, it is better than what we had in previous years if we were at the same level or a minimal increase, which is almost negligible. Or God forbid we have stagnation. So we can’t be satisfied with that,” says economic analyst Aleksandar Ljuboja.
“The increase is not substantial but only in terms of value. One very problematic piece of information is that the Russian Federation appears among the leading investors, and we know that there are generally no new investments from the Russian Federation that we can feel. So the question is what are the real investments here or is it perhaps in it’s an attempt by someone to avoid sanctions,” economic analyst Igor Gavran points out.
Foreign investors who are already doing business in Bosnia and Herzegovina highlight a number of our comparative advantages, such as favorable geographical location, proximity to Western Europe, solid infrastructure, low energy prices and favorable labor costs. Of course, there are also disadvantages that deter investment in Bosnia and Herzegovina.
“Political stability and how much manpower is actually available and how much manpower is trained. These are serious challenges and then everyone needs to assess for themselves whether they are ready to take risks. Do they feel ready and able to solve these challenges in order to profit of these comparative advantages”, says Edin Dacić, president of the Council of Foreign Investors of the Banja Luka Regional Chamber of Commerce.
Since the end of the war, foreign investors have invested about 20 billion marks in Bosnia and Herzegovina. At first it sounds like a lot, but in fact it is not, when you know that it is a period of 29 years and that several times more was invested in certain countries of the region, BHRT writes.
