Despite the SOEs generating revenue of MVR 13.27 billion, it appears that these enterprises are facing significant financial challenges, leading to the outcome resulting in a major loss by the end of the year.
SunOnline International
As the Maldives grapples with its escalating debt situation, the financial management and performance of state-owned enterprises (SOEs) have come under intense scrutiny. In 2024, evaluating the loss and profitability of these enterprises has become crucial for those seeking to advise the government on cutting losses and investing in more profitable sectors. A major concern is the lack of profitability among Maldivian SOEs, particularly throughout 2023, which has highlighted the need for strategic financial reforms and targeted investments to bolster the country's economic stability.
According to the statistics by the Privatization and Corporation Board (PCB), SOEs in the Maldives reported a collective loss exceeding MVR 2 billion in the final quarter of 2023. There is no doubt that 2023 was a tough year financially, as the taxes were increased in order to increase the revenues of the Maldives as a way to curb the increasing debt of the country. However, despite the SOEs generating revenue of MVR 13.27 billion, it appears that these enterprises are facing significant financial challenges, leading to the outcome resulting in a major loss by the end of the year.
The PCB highlighted some of the biggest SOEs that made staggering revenues while also noting the SOEs which has been accounting for a major portion of the MVR 2 billion loss in 2023. According to the PCB statistics, the State Trading Organisation (STO) was the leading revenue generator among the SOEs with a contribution of approximately MVR 4 billion in profits. The statistics show that this profitability amounts to 30 percent of the total revenue from SOEs for the year 2023. The statistics also highlighted the stark contrast to the profitability of STOp by highlighting the substantial loss made by the Housing Development Corporation (HDC), which made a loss of MVR 3.2 billion during the same period. Although both of these corporations are some of the largest in the Maldives, the contrast between the two SOEs highlights the financial difficulties faced by HDC compared to STO - which includes the halted construction of a yacht marina in Hulhumale', unpaid dues from STELCO for the utility network setup in Hulhumale' Phase 2, and reduced rents and fines from Hiyaa flats.
This report also shed light on some of the biggest expenditures taken up by the SOEs, which include expenditure on salaries. This has also been one of the biggest focal points of conversations as of late, as citizens have started calling out for the Government to stop employing so many political employees during a time when the country is trying to manage its debt. The statistics showcase that the number of employees across SOEs increased from 30,866 in 2022 to 34,369 by the end of 2023. The sectors that saw the largest increase in employment during this time period include Fenaka, HDC, STELCO, and MTCC, with Fenaka hiring 682 new staff members, MTCC 734, STELCO 302, and HDC 642.
