Staff Reporter :
Bangladesh is projected to undergo substantial population growth over the next two decades, resulting in a sharp rise in domestic demand and creating significant opportunities for private sector investment across a range of industries, according to a new report by the World Bank (WB) Group.
The report – titled “Bangladesh: Country Private Sector Diagnostic (CPSD)” – was jointly prepared by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). It highlights Bangladesh’s demographic trajectory, which is expected to outpace that of most other middle-income countries, and its implications for private sector participation in manufacturing, housing, consumer goods, and services.
Launched during a session of the ongoing Bangladesh Investment Summit at the InterContinental Dhaka, the report emphasises the importance of policy reforms to unlock employment generation across critical sectors.
manufacturing, housing, consumer goods, and services.
Launched during a session of the ongoing Bangladesh Investment Summit at the InterContinental Dhaka, the report emphasises the importance of policy reforms to unlock employment generation across critical sectors.
Citing the success of the ready-made garments (RMG) industry as a blueprint, the report notes that Bangladesh has demonstrated its capacity to export manufactured goods and attract foreign direct investment (FDI). Scaling similar achievements in other sectors will be crucial to absorbing the growing youth workforce.
The CPSD identifies four key sectors with high potential for private investment and job creation: green RMG, middle-income housing, paint and dyes, and digital financial services.
According to the report, construction of new housing units could generate approximately 2.37 million jobs annually.
Expanding local production in the paint and dye sector could create over 664,000 formal jobs, while reforms in digital financial services could contribute between 96,000 and 460,000 new employment opportunities.
However, the report also warns that without strategic reform, Bangladesh risks missing out on the benefits of its demographic dividend, pointing to the current 28 per cent unemployment rate among tertiary-educated youth.
To enhance private sector investment, the report outlines several persistent challenges including corruption, outdated customs procedures, complex tariffs, limited access to finance, high tax rates, unreliable electricity supply, and a large informal sector.
Lengthy customs clearance times in particular force businesses to maintain large-and costly-inventory reserves.
Despite these hurdles, the report acknowledges the interim government’s stated commitment to improving governance and transparency.
In the green RMG sector, the report recommends reforming labour laws to secure continued EU market access after Bangladesh’s graduation from Least Developed Country (LDC) status.
Other suggested measures include eliminating the 10 per cent cash incentive on exports of polythene and flakes, aligning duties on solar equipment, and introducing water efficiency certifications.
To bolster the housing sector, the report advises repurposing unused government land for residential development, raising the floor area ratio, digitising land registration, and establishing a legal framework to support a mortgage refinance company.
For the paint and dye industry, digitisation of customs classifications and alignment of import tariffs are key proposed interventions.
In the area of digital financial services, the report calls for regulatory amendments to allow mobile financial service providers to issue and verify higher-limit merchant or corporate wallets.
It also recommends publishing the Bangladesh Bank’s fee structure methodology and eliminating transfer taxes on asset movements to structured finance entities.
The CPSD concludes that reforms in these priority sectors would signal Bangladesh’s readiness to embrace a more transparent, inclusive, and investment-friendly economic framework.
