The Ministry of Finance has announced that the state budget allocation for government-owned companies will decrease next year compared to this year. The budget book for the upcoming year includes detailed information related to the budget. According to statistics included in the budget regarding funds allocated to state-owned enterprises, the proposed budget for next year includes 902.5 million rufiyaa. The Ministry of Finance stated that this represents a 72.9 percent decrease compared to this year and a 53 percent decrease compared to the average of the past five years.
According to the budget book released by the Ministry of Finance, capital contributions estimated for this year amount to 3.3 billion rufiyaa. The Ministry explained that the increase in capital expenditure for state-owned companies this year is due to the startup capital required for three newly established government companies. These companies are the Fisheries and Ocean Resources Marketing and Promotion Company established to promote fisheries products, Infrastructure Solution Company specialized in urban development projects, and State Pharmaceutical and Medical Supplies Company established to import medicines to the Maldives. The Ministry of Finance has estimated that 724.4 million rufiyaa will be spent on these three companies by the end of the year.
Additionally, the Ministry of Finance stated that capital expenditures have increased this year because funds previously allocated to Visit Maldives Corporation are now classified as SOE capital expenditure following changes to the expenditure classification system.
Although overall capital expenditures increased this year, the Ministry of Finance stated that the amounts provided to individual companies have been reduced during the year. The Ministry noted that expenditures for all companies except except Maldives Integrated Tourism Development Corporation (MITDC) and Waste Management Corporation (WEMCO) have been reduced. Companies expected to see the largest reductions in capital expenditure include Fenaka, Maldives Fund Management Company, Maldives Post, and Addu International Airport Company. The Ministry of Finance stated that while capital expenditure for these companies has been reduced this year, this amount will decrease further next year. The Ministry also noted that startup capital provided to new companies is a one-time expense, which will further reduce the capital expenditure for companies in next year’s budget.
The Ministry of Finance stated that the 2.014 billion rufiyaa spent on loans to companies this year was for the Velana Airport development project. However, with the completion of this project, no additional expenses for this project have been included in next year’s budget, which will further reduce expenditure. The Ministry stated that loan expenditure included in next year’s budget is for loans to be issued to SDFC. The government’s goal is to reduce state-owned enterprises’ dependence on the budget and strengthen their operations. The government had previously decided to implement reformative changes to these companies to achieve this.
