President: Gov’t to settle debts with private businesses within five weeks

President Dr. Mohamed Muizzu announced on Thursday evening that the government will clear all outstanding financial obligations to private businesses within the next five weeks.

This declaration comes amidst growing concerns from the business community regarding delayed payments for services rendered.

In a statement posted on Thursday evening, ahead of a planned rally by the opposition Maldivian Democratic Party (MDP) addressing corruption and financial mismanagement, President Muizzu provided a new timeline for the government's settlement of debts to local private sector entities.

The substantial backlog of payments owed to private businesses has been a persistent issue. On January 7 of this year, during a visit to G.Dh. Hoandeddhoo, the President had previously stated that the government had commenced payments totaling over MVR 500 million to private companies for contracted work, with the promise of full resolution before the month of Ramadan. However, this commitment was not met.

President Muizzu further elaborated that upon assuming office on November 17, 2023, his administration inherited thousands of unpaid invoices owed to Maldivian enterprises. He assured that all bills submitted to the government and government-owned corporations would be processed and paid within the forthcoming five-week period.

Acknowledging the challenging economic climate he inherited, the President stated, “When I took office, the economy was in a deep hole.” He underscored the significance of this payment initiative, asserting, “This is a huge achievement in the efforts being made to revive the Maldivian economy.”

Speaking at a People’s National Congress (PNC) rally on Wednesday, President Muizzu affirmed that the economy is now on a trajectory of recovery, progressing at an appropriate pace. He reiterated his commitment to continuing project implementation while simultaneously addressing both domestic and external debt burdens.

“We will continue to pay off the external debt and the domestic debt of the people while fulfilling our promises to the people. And hopefully without printing money,” he stated, alluding to prudent fiscal management.

The Maldives currently faces significant debt concerns, with approximately USD 500 million due this year and an estimated USD 1.1 billion in the upcoming year.

Meanwhile, numerous business owners have voiced considerable apprehension and dissatisfaction regarding the government's protracted payment delays. Some have expressed grave concerns that the accumulation of unpaid invoices poses an existential threat to their operations, risking business closures.