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Regulations to protect sovereign fund needed: Finance Ministry

Ahmed Aiham
15 November 2018, MVT 10:23
Minister of Finance and Treasury, Ahmed Munawar. PHOTO: HUSSAIN WAHEED/MIHAARU
Ahmed Aiham
15 November 2018, MVT 10:23

Ministry of Finance and Treasure declared on Wednesday that a law must be drafted to protect the 'Sovereign Development Fund', which currently operates without specialized regulations.

The proposed state budget for the year 2019, noted that it is important for future generations that the state protects the reserve fund, as it acts as an economic buffer in times of crisis.

Several countries across the world have integrated such funds, which are to be used under strict policies to fund projects lacking financial support and under emergency situations.

Outgoing President Abdulla Yameen Abdul Gayoom established the 'Sovereign Development Fund' in 2017. The state budget has allocated MVR 705.6 million to be deposited into the reserve from the revenue generated by the Airport Development Fee (ADF)

The Finance Ministry estimates MVR 26.7 billion out of the MVR 29.6 billion budget to be expended during 2019, assuming that free aid amounting to at least MVR 23 billion shall be received during the period and that the economic growth will remain steady at 6.8 percent.

Minister of Finance Ahmed Munawar noted that over the past five years MVR 25 billion was spent on development projects, highlighting that the state debt had increased by MVR 23 billion and that the national debt would accumulate to MVR 48.6 billion by the end of the year 2018.

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