Written by The Banking Post
Bangladesh’s readymade garment sector could see export earnings surge to as much as US$94 billion by 2029—up from roughly US$50 billion today—if it breaks into non-traditional markets and ramps up manmade fibre production, a joint World Bank–IFC–MIGA diagnostic warns. Achieving this 15 percent annual growth target will hinge on coordinated reforms across trade, industry and finance.
Growth Projections and Reform Agenda
- US$94 billion in annual RMG exports by 2029 at a 15 percent compound growth rate.
- Key enablers: market diversification beyond traditional Western buyers and scaling up manmade fibre (MMF) manufacturing.
- Required reforms span tariff policy, environmental and labour regulation, digitalisation and financing to underpin sustainable expansion.
Job Creation and Sectoral Spillovers
According to the Country Private Sector Diagnostic (CPSD) released in Dhaka:
- 664,000 new formal jobs in paint and textile-dye manufacturing.
- Up to 460,000 positions in digital financial services, including 360,000 formalised roles.
- Mobilisation of US$2 billion private investment into middle-income housing, generating further employment in construction and related industries.
Four High-Potential Sectors
The CPSD identifies four priority areas for targeted private investment:
- Greening the RMG supply chain
- Affordable, middle-income housing
- Domestic production of paints and textile dyes
- Expansion of digital financial services (DFS)
Business-Climate Hurdles
Stakeholders pointed to persistent obstacles that constrain private-sector growth:
- Frequent electricity shortages
- Limited access to long-term finance
- Corruption and widespread informality
- High effective tax burdens
Targeted Policy Recommendations
To unlock sectoral potential, the report urges:
RMG Sector
- Cut import duties on MMF inputs and align incentives with sustainability goals.
- Regulate fabric waste and groundwater use; incentivise water-efficient processes.
- Reform labour laws to meet forthcoming EU ecodesign and social-compliance standards after LDC graduation.
Green Energy and Trade
- End cash subsidies for PET-bottle exports; harmonise duties on solar panels and inverters.
- Introduce water-efficiency certification for garment factories.
Paints & Dyes
- Digitalise customs clearances; standardise HS codes for imported inputs.
- Revise bonded-warehouse rules to allow third-party operators and reduce inventory costs.
- Enhance logistics infrastructure to lower trade costs.
Housing
- Simplify land registration through digital records and streamline municipal-service connections.
- Expand mortgage and construction-finance access for developers and homebuyers.
Digital Financial Services
- Promote wholesale transactions via mobile money platforms.
- Remove taxes on asset transfers between originators and financing vehicles to boost structured finance.
Stakeholder Perspectives
At the CPSD dissemination event in Dhaka:
- Suhail Kassim (World Bank) highlighted high MMF duties and low green-tech investment as barriers to sustainable growth.
- Syed Nasim Manzur (LFMEAB) decried policy inconsistency, regulatory overreach and systemic corruption as investor deterrents.
- Martin Holtmann (IFC), Jean Pesme (World Bank), Hosna Ferdous Sumi and Miah Rahmat Ali (IFC) joined the discussion, urging digital transformation and regulatory clarity to fully unlock Bangladesh’s private-sector capacity.
Realising the report’s vision will require sustained public-private collaboration, clear policy direction and targeted financing to propel Bangladesh’s RMG industry into its next growth phase.
