President Dr Mohamed Muizzu has announced plans to clear a substantial portion of the outstanding debts owed by state-owned enterprises (SOEs) to private contractors before Ramadan. The initiative aims to address financial mismanagement under the previous administration, which left companies such as Fenaka Corporation, the Road Development Corporation (RDC), WAMCO, and MTCC unable to pay their dues.
Speaking during his visit to GDh. Hoandhedhdhoo, President Muizzu confirmed that the Finance Ministry is releasing over MVR 500 million this week to Maldivian companies for completed government projects. He stressed that efforts are being made to settle a majority of the payments in January and February, providing much-needed relief to small and medium enterprises (SMEs).
“These are works that were contracted by the government to various people. Funds will be disbursed to small and medium enterprises. This was done during the previous months as well,” the President said.
Financial Challenges of SOEs
Several SOEs, including Fenaka Corporation and RDC, are struggling with significant debts. Fenaka alone reportedly carries a debt burden of MVR 4 billion. The mismanagement of these enterprises under the previous administration has led to widespread issues, with many contractors going unpaid for projects completed earlier this year.
Small private contractors have borne the brunt of this crisis, with some companies teetering on the verge of bankruptcy. President Muizzu acknowledged the severe impact of these delays and emphasised the urgency of addressing the problem.
A Commitment to Financial Discipline
President Muizzu reiterated his administration’s commitment to financial stability. He ruled out increasing national debt or printing money to meet obligations, stating, “We are working to fulfil our financial obligations without compromising the value of our currency or increasing our debt burden.”
The President also affirmed his policy of prioritising the nation’s interests, adding, “My policy is a Maldives-first policy. Leading the country without dependence on any single nation is essential.”
Restoring Confidence in Governance
Efforts to clear the SOE debts are part of a broader push by President Muizzu’s administration to restore confidence in government institutions and support the private sector. While the financial challenges are significant, the government’s initiative to prioritise payments to SMEs offers hope to struggling businesses.
