The administration is working towards changing the ownership structure of state-owned enterprises (SOEs) and will determine which companies will sell shares publicly, Principal Secretary to the President on Public Policy Abdulla Nazim Ibrahim confirmed during a press conference at the President’s Office on Sunday.
The Ministry of Finance submitted a cabinet paper proposing policies with a view towards ensuring the profitability of SOEs and, as such, the Cabinet decided to implement the policies presented in the paper, Ibrahim said.
Policies outlined in the paper include:
- The review of the classification of SOEs and the institution, and implementation of key performance indicators for individual companies to increase interest in strengthening the management of companies
- The strengthening of company governance, identifying and formulating policies for companies to be operated under; 100 percent state ownership, public-private partnerships and public offerings under IPOs
- Strengthening corporate governance and making necessary changes to boards and committees
- Initiating measures to strengthen the conditions under which subsidies will be given to companies and the procedures for providing subsidies and capital
- Strengthening the management capacity of companies which are not operating optimally and providing them with cash flow
Ibrahim outlined that the cabinet had decided to do all this within the next three months; however, companies will have up to the first six months of 2025 to improve their management.
The cabinet will decide on companies which are not operating optimally by that date and formulate measures to restructure, merge, or liquidate SOEs where necessary, Ibrahim said.
The privatisation of SOEs was also touted by the previous administration, with the ministry conducting studies on the effect. The Maldives Monetary Authority (MMA) had also recommended privatising some SOEs.
President Mohamed Muizzu’s “Week 14” roadmap also includes proposed milestones to make SOEs profitable without the state having to fund operations through the state’s annual budget.
The Ministry of Finance clarified that the state has a stake in 32 companies, of which only a limited few are financially viable while most continue to operate at a loss — and funded from the state budget.
Additionally, according to international financial institutions, the increased role of SOEs in the economy has had an adverse impact on private enterprises.
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