Advisor to the Minister of Finance Ahmed Munawwar has attributed the rise in state debt to the financial mismanagement of the previous administration. He made these comments during a programme aired on PSM News.
Munawwar noted the former government’s greatest failure was its handling of the financial health of state-owned enterprises (SOEs). He criticised the previous administration for increasing expenditures through poor staffing decisions, unmatched pay scales, and a lack of comprehensive project planning.
Munawwar highlighted that by the end of the previous administration, the government’s deficit had reached USD 3.4 billion, translating to an annual shortfall of USD 649 million. He also pointed out that SOEs were operated at excessively high costs, resulting in their collective debt climbing from USD 2 billion at the end of 2022 to USD 6.4 billion by the conclusion of the former government’s term.
Additionally, Munawwar revealed that the total national debt, encompassing both government and corporate debt, stood at USD 12.9 billion at the end of the previous administration.
Munawwar detailed how capital and subsidies paid to SOEs surged under the previous government, rising from around USD 32 million in 2018 to approximately USD 389.5 million annually over the last five years.
He provided specific examples of SOE debt increases: Fenaka Corporation’s debt grew from USD 77.9 million in 2018 to USD 279 million by November 2023. During the same period, State Electric Company Limited (STELCO) saw its debt rise from USD 181.7 million to USD 246.7 million. Additionally, Island Aviation’s debt escalated from USD 64.9 million to USD 259.7 million over the five years.