A pivotal co-financing plan is set to bolster foreign direct investment inflows to Colombia. Through this strategy, Colombia is poised to invest a substantial $2.4 million to nurture supplier development projects, a key driver of its economic progress and prosperity. This plan holds the promise of maintaining and significantly increasing foreign direct investment, paving the way for a brighter economic future for Colombia.
In 2023, Colombia experienced significant economic stability an economic boost, with a substantial $17.1 billion in foreign direct investment (FDI). This success story is a testament to the growing potential of the co-financing plan, which aims to integrate companies into value chains, diversify the supply of goods and services, and set a solid foundation for future growth.
The co-financing plan aims to maintain and attract foreign direct investment
However, with the decline in foreign direct investment inflows to Colombia in the first quarter of 2024, the country received only $3.6 million, a decrease of $489 million compared to the same period in 2023. This stark contrast underscores the urgent need for a co-financing plan to maintain and attract foreign direct investment.
When discussing the allocation of foreign direct investment inflows to Colombia from January to March of the current year, it’s important to note that most investment was directed towards financing productive projects in various sectors. These sectors, including mining and oil, financial services and business, commerce, restaurants and hotels, transportation and communications, and manufacturing, have significantly benefited from the co-financing plan, demonstrating its broad impact.
Regarding FDI by country of origin, resources came mainly from the United States ($1.6 billion), Anguilla ($481 million), Spain ($443 million), Panama ($317 million), England ($148 million), Netherlands ($140 million), Switzerland ($83 million), and Mexico ($82 million).
Now, Colombia is calling on all potential investors to continue to perceive Colombia as an investment destination that meets their industrial supply needs. The Ministry of Commerce, Industry and Tourism and Colombia Productiva have opened their call for ‘Best Suppliers of Foreign Direct Investment (FDI),” which will invest $2.4 million to co-finance supplier development projects. This initiative is designed to ensure that micro, small, and medium-sized enterprises can be inserted into the supply chains of foreign direct investment companies, further strengthening the Colombian economy.
This call is part of the ‘Better Suppliers Chain’ strategy of MinComercio and Colombia Productiva, which provides technical assistance services and training in digital and complementary tools to strengthen the supply capacities of productive units, encouraging their insertion into high-value-added production chains, especially those related to the country’s Industrialization Policy.
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Efforts are aimed at micro, small, and medium-sized businesses
Hernán Ceballos, general manager of Colombia Productiva, explained that “through the EnCadena better suppliers’ program, the Government will allocate more than $34 million to improve the supply capabilities of nearly 2,000 micro, small and medium-sized businesses in strategic industries, of which $2.4 million is destined to strengthen supplies for investing companies.”
The objective of the project is clear. With resources from the Ministry of Commerce and the Inter-American Development Bank, six supplier development projects will be co-financed with up to four hundred million pesos each. These projects must have a proposing company or managing entity, three micro, small, and medium-sized enterprises or beneficiary productive units, and an FDI anchor company as an ally. These resources will co-finance, among others, the acquisition of equipment and software licenses; laboratory services and technological development; inputs, goods, and materials; subscriptions and access to information sources; expenses associated with training activities; payments for compliance with legal, regulatory, technical, and commercial requirements for market access, including the necessary legal advice; costs associated with the implementation of the commercial strategy; and consulting services, technical assistance, training, or specialized technical personnel.
At the end of the initiative, potential suppliers are expected to present improvements in profitability, sales, exports, and development or sophistication of processes, products, or services. This will allow them to create sustainable business relationships with companies that make foreign direct investment inflows to Colombia over time.
Foreign direct investment inflows to Colombia prioritize certain sectors
It should be noted that ‘Best suppliers for foreign direct investment’ projects focused on the strategic sectors of the Industrialization Policy will be prioritized: energy transition, agro-industrialization, food sovereignty, industrialization in the health sector, and industrialization for defense and life.
The country’s commitment to fostering foreign direct investment inflows to Colombia through the co-financing plan is a significant step towards ensuring economic growth and stability. By investing in supplier development projects and enhancing local businesses’ capabilities, Colombia is addressing the recent decline in FDI and paving the way for a more robust and diversified economy. This initiative reaffirms Colombia’s position as an attractive destination for foreign investors, promising a prosperous future built on strong, sustainable business relationships.
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