Govt decides to dissolve MITDC and AgroNat

The Maldives’ cabinet has decided to dissolve two state-owned enterprises – the Maldives Integrated Tourism Development Corporation (MITDC) and the Agro National Corporation (AgroNat) – the latest in a series of decisions to cut down costs.

The government has been making a number of key decisions to improve its finances. This includes the decision to merge multiple state-owned enterprises.

The decision to dissolve MITDC and AgroNat was made during a cabinet meeting held last Sunday.

Also during Sunday’s meeting, the cabinet decided to merge Regional Airports Company Limited (RACL) with the Maldives Airports Company Limited (MACL), Fahi Dhiriulhun Corporation (FDC) with the Housing Development Corporation (HDC), and the Business Center Corporation (BCC) with the Maldives Fund Management Corporation (MFMC).

According to the President’s Office once BCC is merged with MFCM, the MITDC will be dissolved and its mandate transferred to the MFCM.

Meanwhile, the mandate of the AgroNat – an enterprise established by the former administration to develop the agriculture sector – is set to be transferred to the Maldives Industrial Development Free Zone (MIDFZ).

According to the President’s Office, the cabinet decided to implement the changes before the end of this year.

Last week, the cabinet decided to make Fenaka Corporation, a state utility company which has racked up debt, a subsidiary of the State Trading Organization (STO).

The merger of insolvent SOEs with larger more profitable SOEs is a component of the austerity measures announced by the Maldivian administration to improve the state’s finances.

The government has announced a string of measures to cut costs and boost revenue. This includes legal revisions to reform Aasandha, introduce targeted subsidies, and have companies that earn US dollar revenues pay taxes in US dollars.

With the country’s rising external debt servicing obligations, Fitch has downgraded Maldives’ credit rating from ‘CCC+’ to ‘CC’, warning of an increased risk of default.