Difficulty for public authorities to meet their financial obligations to the government is becoming an increasingly recurring problem with significant consequences for the treasury.
Central Water Authority (CWA), Wastewater Management Authority (WMA), ex-MCCB Ltd, Airports of Mauritius Ltd, Rodrigues Business Park Development Co. Ltd and Rodrigues Regional Assembly have raised several million rupees in government loans. And as of June 2022, these six organizations had accumulated arrears of Rs 2.6 billion. This is reported in a document presented in the National Assembly by the Ministry of Finance after a question asked by the representative of the Mauritian militant movement, Aadil Ameer Meea.
This response from the Ministry of Finance comes when the Audit Office issued a serious criticism of the Ministry of Finance in a report entitled: State’s liquidity management. He believes that the latter was not able to introduce an effective mechanism to ensure the recovery of his debt. The audit office therefore recommended that the Ministry of Finance recover the owed loans as soon as possible. This is to minimize the possibility of this debt eventually becoming uncollectible over the years. This represents a significant shortfall for the government. The audit office also recommended that the Ministry of Finance ensure that funds are only lent when the need arises. He asks the ministry to ensure that the funds are used for concrete projects.
The public authorities’ difficulties in honoring their repayments have often forced the Ministry of Finance to write off this debt. This was the case in 2021 when the ministry took the decision to write off about Rs 2.3 billion in debt owed to WMA, Polytechnics Mauritius Ltd, CWA, Irrigation Authority, National Transport Corporation, Mauritius Broadcasting Corporation and Mauritius Meat Authority.
With knowledge of the economic effort given the current economic situation, the Ministry of Finance announces legislative changes. This is to give more power to the treasury and facilitate the recovery of arrears.
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