Government Payment Delays Push Small Businesses to the Brink

Since President Mohamed Muizzu assumed office eight months ago, small and medium-sized enterprises (SMEs) have faced severe financial strain due to halted payments from state-owned enterprises (SOEs). SOEs like Fenaka and Road Development Corporation (RDC) have worsened payment delays. Many small businesses have exhausted cash reserves, leading to salary cuts, staff reductions, and shutdowns. Economic analysts warn of a severe economic slowdown. The government has announced cost-cutting measures targeting Public Sector Investment Programme (PSIP) projects, but political appointees are at a record high of over 2,000, costing over MVR 86 million monthly. Foreign trips are increasing, and the government is considering raising the Goods and Services Tax (GST) to 10%.

Since President Mohamed Muizzu assumed office eight months ago, small and medium-sized enterprises (SMEs) have faced severe financial strain due to halted payments from state-owned enterprises (SOEs). SOEs like Fenaka and Road Development Corporation (RDC) have worsened payment delays. Many small businesses have exhausted cash reserves, leading to salary cuts, staff reductions, and shutdowns. Economic analysts warn of a severe economic slowdown. The government has announced cost-cutting measures targeting Public Sector Investment Programme (PSIP) projects, but political appointees are at a record high of over 2,000, costing over MVR 86 million monthly. Foreign trips are increasing, and the government is considering raising the Goods and Services Tax (GST) to 10%.

Since President Mohamed Muizzu assumed office eight months ago, small and medium-sized enterprises (SMEs) have faced severe financial strain due to halted payments from state-owned enterprises (SOEs). SOEs like Fenaka and Road Development Corporation (RDC) have worsened payment delays. Many small businesses have exhausted cash reserves, leading to salary cuts, staff reductions, and shutdowns. Economic analysts warn of a severe economic slowdown. The government has announced cost-cutting measures targeting Public Sector Investment Programme (PSIP) projects, but political appointees are at a record high of over 2,000, costing over MVR 86 million monthly. Foreign trips are increasing, and the government is considering raising the Goods and Services Tax (GST) to 10%.

This story involves 1 source and may affect public understanding of smes / economy.