New Bill Propose Measures To Publicise State Debt Every Quarter

A new bill introduced in parliament aims to enhance transparency in the management of state debt, proposing stringent measures to publicise and report details of state debt.

The bill, proposed by Funadhoo MP Mohamed Mamdhooh, mandates the publication of a detailed debt bulletin within 45 days after the end of each quarter.

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This bulletin will outline key aspects of the state’s debt profile, including remaining debt amounts, currency denominations, risk assessments of the debt portfolio, and updates on adherence to debt management strategies.

In addition to quarterly disclosures, the bill requires an annual debt management report to be submitted to parliament within 30 days after the fiscal year concludes. These reports are intended to provide comprehensive insights into the government’s debt management policies and practices.

Furthermore, the bill imposes additional responsibilities on the Minister of Finance for effective state debt management and proposes the establishment of a dedicated debt management office under the government’s purview.

Heated Exchanges and Finger Pointing

During the parliamentary session, heated debates ensued over the economy and debt, with MPs from the ruling party criticising the previous administration for what they described as fiscal mismanagement and excessive borrowing.

MP Mohamed Mamdhooh, in his address, accused the former Maldivian Democratic Party (MDP) administration of jeopardising the country’s economic stability through imprudent borrowing practices.

He alleged that the previous government had accumulated equivalent to 40 years of debt within a five-year span.

His fellow members of the ruling party echoed his sentiments.

Kaashidhoo MP Muthasim Ibrahim claimed that the state debt rose to MVR 120 billion from MVR 60 billion during the MDP’s tenure.

He called for a comprehensive investigation into the use of these funds, suggesting that the previous administration’s actions had led to significant economic damage.

Hithadhoo MP Ahmed Azaan Marzouq criticised the former administration for its failure to boost revenue and for excessive recurrent spending. He argued that projects undertaken did not yield economic growth or generate income.

Azaan highlighted concerns over inflated costs in the construction of new facilities for the state-owned utility company FENAKA, suggesting these projects were exploited for personal gain.

In defence of MDP policies, Galolhu South MP Mikail Ahmed Naseem claimed that over USD 24.7 billion of debt had been repaid between 2019 and 2023, surpassing previous administrations. He criticised President Dr Mohamed Muizzu for spending MVR 21 million on presidential palace renovations and for the high number of political appointees.

Kendhoo MP Mauroof Zakir noted that the current debt transparency bill originated from the former administration but has since been reintroduced. He urged ruling party MPs to scrutinise the bill closely, cautioning that its current form might hinder the current administration’s plans if enacted.

Mauroof pointed out that the MDP government had taken loans for national development projects, many of which, including the RTL ferry project, Addu Road development, MIFCO expansion, and airport developments, have now stalled. He expressed concerns over the government’s decreased credit rating and its challenges in securing loans and budget support.

He criticised the current administration for actions such as potential cuts to the state healthcare scheme Aasandha, tax increases, and reduced basic services, arguing that these were contrary to electoral promises.