Monday, 02nd August – The International Monetary Fund (IMF) details out a set of recommendations to Maldives government on improving the state’s fiscal transparency.
In a detail report by IMF, compiled by its team of advisors and financial experts, it was noted that the the island nation was slowly making considerable progress in fiscal transparency over the recent years.
Moreover, the delegation remotely conducted a thorough assessment of the country’s existing fiscal policies as well as the dissemination of financial statistics of the government bodies for public consumption.
Furthermore, IMF had found that the overall performance “across fiscal reporting practices” to be mixed noting that “firm foundations are in place, but some fundamental elements need to be reinforced.”
The IMF made out a list of recommendations to Maldives government in order to improve fiscal management and transparency, which entails;
- Improve the timeliness and reliability of the year-end consolidated financial statements
- Enhance the transparency of tax expenditure by improving their reporting and coverage
- Establish clear fiscal policy objectives to effectively guide the fiscal stance
- Continue to refine the MTBF, supported by robust and reliable macroeconomic and fiscal forecasts, to enhance budget credibility
- Enhance the spending efficiency on public investment projects and the transparency around project selection and procurement
- Improve the analysis and disclosure of fiscal risks
- Improve the analysis of pension liabilities, and assess and manage the short-term and long-term liabilities of the various pension schemes
- Enhance and strengthen the management of guarantees by ensuring greater compliance with the MoF’s guarantee policy
- Strengthen the transparency around SOEs finances by publishing an ownership policy and more comprehensive reporting
Furthermore, thorough their assessment the IMF had found a few areas which did not meet the best practice standards, which includes;
- Coverage of Tax Expenditures
- Timeliness of Annual Financial Statements
- Internal Consistency
- Historical Revisions
- Investment Projects
- Fiscal Policy Objectives
- Independent Evaluation
- Forecast Reconciliation
- Long-Term Fiscal Sustainability Analysis
- PPPs
- Fiscal Sector Exposure
- Natural Resources
- Substantial Governments
The IMF recommends on improving the areas through strong policies and consistent reforms.
The team was lead by Sandeep Saxena and comprised of IMF-FAD and SARTTAC PFM advisors, who worked closely with the Chief Financial Budget Executive of Ministry of Finance, Mr. Saruvash Adam during their assessment.
Moreover, assessment had followed a virtual inception mission conducted on August 2020 while the actual assessment was carried from 23 November until 14 December of the previous year.