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Former govt's loan at MVR 54 B with MVR 28 B from India

Mohamed Rehan
20 November 2023, MVT 15:02
Former President Ibrahim Mohamed Solih and former Finance Minister Ameer speaking at a previous forum.-- Photo: Mihaaru
Mohamed Rehan
20 November 2023, MVT 15:02

Statistics from the Ministry of Finance revealed that the former government, which ended its term on November 17, had acquired USD 3.5 billion (MVR 54 billion) in loans and guarantees.

In the ministry's report regarding state loans and debts, the previous government took 42 loans with a combined total of USD 2.7 billion (MVR 42 billion) in the past five years. Nine of these loans were needed for cash injections and capital for state-owned enterprises (SOEs), amounting to USD 750 million (MVR 11.5 billion).

This is an MVR 14.4 billion increment compared to the former president Abdulla Yameen's administration. During the five-year term of Yameen's government, the total loan amount reached MVR 39.6 billion.

Solih's administration acquired six loans and four state-guaranteed loans from India's EXIM Bank reaching a total of USD 1.8 billion (MVR 28.4 billion). Six out of these loans amount to USD 1.4 billion (MVR 22 billion), while the government acquired USD 447 million (MVR 6.8 billion) through the EXIM Bank to inject to SOEs.

Out of the SOEs, the largest loan amount was acquired for Fahi-Dhiriulhun Corporation (FDC). The state acquired a loan amount of USD 227 million (MVR 3.5 billion) towards the development of 4,000 housing units initiated by FDC.

Besides India's EXIM Bank, Maldives acquired loans from the World Bank and the Asian Development Bank (ADB) as well.

Inclusive of the state debt accumulated during former President Solih's government, the current state debt is at a total of MVR 119 billion; which is 111 percent of the Gross Domestic Product (GDP).

The government's fiscal strategy report highlights the government's aim to reduce the debt-to-GDP ratio to 95 percent by 2026, which can be achieved with strong austerity measures including loan acquisition cuts and increment of revenue streams.