News Desk
MALE — The government has cut the direct budget subsidy to MIFCO, Fisheries Minister Ahmed Shiyam announced, in a move that fits squarely within Finance Minister Moosa Zameer’s wider agenda of transitioning state-owned enterprises away from government dependence and into self-sustaining operations.
When the current government took office, the Ministry of Finance was subsidising MIFCO at MVR 13 per kilogram of fish, amounting to MVR 1.1 billion annually. That arrangement has now ended. Zameer has previously said that businesses currently relying on government subsidies would need to transition into self-sustaining operations, and the MIFCO subsidy cut is a direct application of that policy.
Under the revised arrangement, subsidies will be directed specifically to oil sold to fishermen rather than channelled through the company as a whole. MIFCO now purchases fuel through FSM, state fuel company, at standard market rates, the same as any other commercial entity. Shiyam said the company should not be run in a way that burdens the public.
The reform is part of a broader fiscal tightening the Finance Ministry has been pursuing since Zameer took office in September 2024. When the current administration came to power, state debt stood at MVR 124 billion, with 24 percent of government revenue going to debt servicing. Reducing the subsidy burden on state-owned enterprises is one of the levers the government is using to bring that under control.
MIFCO’s own numbers tell the story of why the change was overdue. The company’s 2024 annual report shows revenue fell to MVR 1.076 billion from MVR 2.009 billion the previous year, a drop of nearly half. The company’s dependence on state support grew significantly during the previous administration, and the current management is now working to rebuild its earnings under normal market conditions without a budget lifeline.
The restructuring of the subsidy so that it flows to fishermen directly rather than to the company is also a meaningful policy shift. The previous arrangement meant public money was going into a company that was losing it. The new arrangement puts the support where it was always intended to go: with the people catching the fish.
Whether MIFCO can return to the revenue levels it posted before 2024 without direct budget support will be the real test of the turnaround. The minister says the management strengthening work is already underway. The numbers will show whether it is working.
