Inspenet, May 31, 2023
The mining-energy sector and the oil industry drove a historic increase in the flow of foreign currency from abroad during the month of April. According to the Bank of the Republic , Colombia received a total of 1,951 million dollars in that period.
Of the aforementioned sum, more than 88 percent, equivalent to 1,721 million dollars, entered thanks to the activity carried out in the mining-energy field.
The mining-energy sector becomes the main source of foreign currency income for Colombia
While currency flows increased 79 percent in the oil and mining sector in April, 70 percent in the rest of the sector’s activities fell, compared to the fourth month of 2022. They went from 778 million dollars last year to 230 million this year.
For May, the flows slowed down again, with a 2 percent drop in the total, during the first 12 days of the month. In that period, in oil and mining there is an advance of 6.8 percent, and in the other sectors, a fall of 33 percent.
The Colombian Petroleum Association (ACP) assured that it is reviewing the information presented by the Bank of the Republic to be certain of what this increase in investment corresponds to, “because it seems to respond to something specific because so far this year the investments of the sector have remained relatively stable”.
This flow of currency is one of the parts that make up Foreign Direct Investment (FDI), whose data for the first quarter of 2023 have not yet been published by the Bank of the Republic.
The part of foreign investment reported in the exchange balance only records foreign currency flows from abroad. Total foreign investment, which is recorded in the balance of payments, includes, in addition to foreign currency flows, the reinvestment of profits and capital contributions other than foreign currency (such as machinery).
The latest data available on total FDI is from December of last year, which shows that during 2022 there was a record of 17,048 million dollars, mainly due to the historical behavior of the first and second quarters of that year.
Foreign investments in Colombia are concentrated in the mining-energy sector
According to the ACP, in order for the investments and operations of the oil sector to remain viable in the country and continue contributing to energy self-sufficiency and with the necessary fiscal resources to leverage the productive transformation and energy transition, it is essential to guarantee legal stability.
In addition to rigorous speed in environmental licenses and permits; law enforcement and security in the regions; and be attentive to legal and regulatory initiatives that limit its development and a robust institutional articulation.
For example, in Colombia, the 2022 tax reform approved a surcharge on income for the production of oil and coal and it was prohibited to deduct royalties from income tax for the production of hydrocarbons and minerals.
Source : News ES Euro
Cover photo : Freepik
Internal photo : Envato
Don’t miss the Inspenet News at: https://inspenet.com/inspenet-tv/
Loading...
