Honduran businessmen agree that the constant increases in electricity rates are making the country less attractive for investment.
The Honduran Electricity Regulatory Commission (Cree) announced a few days ago that by the beginning of 2020 there will be an average increase of 2.9% in the price of electricity.
After a not very encouraging 2017, manufacturers of harnesses and electrical parts for vehicles intend to increase exports this year.
The best prospects for the automotive industry in the United States, the main destination for harnesses and electric parts for cars manufactured in Honduras, are motivating Honduran industrialists, who plan to increase production and sales abroad.
It is estimated that 4 out of 10 products that are sold in the local market are of illegal origin, mostly medicines, liquors, soft drinks, beers and cigarettes.
The union of Honduran businessmen estimates the country's losses caused by contraband goods at $127 million, a phenomenon which occurs to a greater extent in products for human consumption, such as medicines and beverages.
The industrial sector has announced a request to amend Regulation of the Billing Act to raise from $16 thousand to $228 thousand the minimum annual basis required by companies to use the electronic system.
The National Association of Industrialists (ANDI) has also requested an extension of at least eight months, in the implementation of the new billing system.
Raising electricity rates is one of the measures the government is planning in order to improve public finances in the context of a negotiation for a new agreement with the IMF.
The National Association of Industrialists (ANDI) expressed concern about the effect that a possible increase in electricity rates could have on the competitiveness of the sector and called for the need to address the impact of the crisis in the National Electricity Company (ENEE) on state finances in a different way.
Modifications made to the law after its approval in early 2013 could discourage investments for this year.
The conditions that the industry expected this year are different to those of 2013, as international prices of precious metals have dropped and the changes made to the law passed in early 2013 could discourage foreign investment planned for this year.
Continued economic deterioration during the government of Porfirio Lobo has led businessmen to prefer the leftist opposition candidate over the ruling party man.
An article in Elnuevoherald.com reports that Adolfo Facussé, president of the National Association of Manufacturers, said that the current government "... is an economic disaster, giving out money in political campaigns, increasing public administration and making unnecessary tenders which are not very transparent".
A law in Honduras allows the government to use state resources to raise funds to pay domestic debt.
"The attitude of Congress is irresponsible in dealing with these issues without beforehand consulting taxpayers who pay for these commitments with their taxes , nor conversing with civil society organizations," said Fernando Garcia, director of the National Association of Manufacturers (Andi).
The president of the National Association of Manufacturers indicated that the exodus of textile companies from Honduras to other countries has intensified.
"At least 17 textile companies have moved their investments to Nicaragua and at least seven to Campeche, Mexico, said the president of ANDI, Adolfo Facussé", according to an article in Proceso.hn.
Mexican investors who are to visit Honduras in June, will be looking for business in the agribusiness, education and furniture sectors.
The volume of potential investments would not be less than $20 million.
This was confirmed by Daniel Aguilar, regional president in San Pedro Sula at the National Association of Industrialists (ANDI), who explained that the visit is being managed through the newly created Mexican Honduran Chamber of Commerce.
Harassment and a business climate of animosity in the country has forced 25 Honduran companies migrate to Mexico and Nicaragua.
Latribuna.hn reports that "15 of them moved to Nicaragua and the rest to Mexico to the Yucatan area, because they have found better conditions to invest and grow, therefore, the National Association of Industrialists (ANDI), is anlaysing setting up branches in these places in order to continue serving its members. "
Political instability is making both domestic and foreign investors very nervous.
An article in Laprensa.hn looks at how recent political developments related to legal certainty, are worrying Honduran businessmen, as they complicate the promotion of the country as a recipient of foreign investment.
"The situation we are seeing in Honduras is benefiting neighboring countries such as El Salvador, Nicaragua and Guatemala, which provide more legal certainty" said Jesus Canahuati, a textile entrepreneur.
Honduras' industry is asking government to contain spending, in order to curb the depreciation of the currency and rising interest rates.
In late July 2011, the Central Bank of Honduras (BCH in Spanish) reactivated the exchange rate band system, a scheme under which the dollar fluctuates between two bands, established by the entity that has the power to buy dollars if the exchange change goes towards the lower band, and sell if it is located in the upper limit, in order to increase supply and push the exchange rate lower.
They point to the mining potential as a decisive factor for the country’s development, having the capacity to attract investments of $14 billion.
An article in Tiempo.hn reports that "The National Association of Industrialists (ANDI) is urging the National Congress to approve the new Mining Act in order to attract foreign investment in the order of 280 billion lempiras, about $14 billion.
An agreement is being worked on between the Ministries of Labor in Honduras and in Panama so that around four thousand specialist construction workers can work in the canal country.
Once the agreement has been made firm, Honduran construction laborers (project managers, carpenters, joiners, etc..) will be able to work on the widening of the Panama Canal.