The total debt of government-owned companies alone reached MVR 98 billion at the end of President Ibrahim Mohamed Solih's government, Finance Minister's Advisor and former Finance Minister Ahmed Munawwar has said.
Speaking to state media, Munawwar said the previous government ran companies at an extremely high cost, suggesting allowing these companies to accumulate debt as the main reason for the state’s economic predicament faced today.
Munnavar noted that, including company debts, the state’s total debt reached MVR 200 billion by the end of the President Solih's term. He said the former government allocated large amounts of subsidies and capital expenditure to companies without reducing their expenditure or strengthening management. No tangible benefits arose from these allocations, he said.
“This is the area that needs to be prioritized the most in reform and restructuring,” Munawwar emphasized.
Munawwar, who served as Finance Minister in former President Abdulla Yameen's government, pointed out that President Solih’s government allocated approximately MVR 6 billion to state-owned companies from the state budget. However, these companies returned about MVR 500 million in dividends to the government, he said.
Criticizing the former government, Munawwar said the government's debt has increased to its current extent because the MDP government abandoned crucial financial responsibilities.
“By the end of the last presidential term, government expenditure was also out of control,” he said.
The adviser added that at the end of the past five years, expenditure exceeded revenue and deficit expenditure stood at around MVR 53 billion, equating to roughly MVR 10 billion annually.
Some of the factors contributing to the increase in expenditure included indiscriminate staffing, undeservingly high salaries and lack of consideration of total expenditure when planning projects, he said.
