According to the Ministry of Finance, the outgoing government which ended its term on November 17, had acquired USD 3.5 billion (MVR 54 billion) in loans and guarantees.
The previous government led by Ibrahim Mohamed Solih took 42 loans with a combined total of USD 2.7 billion (MVR 42 billion) in the past five years, with nine of these used for cash and capital injections for state-owned enterprises (SOEs); which amounted to a loan total of USD 750 million (MVR 11.5 billion).
The collective loan total of the previous government is an MVR 14.4 billion increment compared to former President Abdulla Yameen’s administration. During his five-year presidency, Yameen’s administration had acquired MVR 39.6 billion in loans.
The Solih administration acquired six loans and four state-guaranteed loans from India’s EXIM Bank; which reached a total of USD 1.8 billion (MVR 28.4 billion). Six out of these loans stood at a total of USD 1.4 billion (MVR 22 billion), while the state acquired USD 447 million (MVR 6.8 billion) through the EXIM Bank to inject to SOEs.
The largest cash injection was allocated for Fahi-Dhiriulhun Corporation (FDC) at USD 227 million (MVR 3.5 billion) which went towards the development of 4,000 housing units.
Besides the EXIM Bank, Maldives government had acquired loans from the World Bank and the Asian Development Bank (ADB) as well.
Inclusive of the state debt accumulated under the outgoing administration, the current state debt is at MVR 119 billion; which is 111% of the Maldives GDP.
The government’s fiscal policy aims to curtail loan acquisitions and increase revenue streams. The plan also includes a reduction of the debt-to-GDP ratio to 95% by 2026.