Auditor General Hussain Niyazi has raised concerns over the government’s record MVR 64.2 billion budget for 2026, warning that the lack of cost-cutting measures could deepen the Maldives’ fiscal challenges and further expand national debt.
Addressing the State Budget Review Committee, Niyazi said the proposed budget contains no concrete strategies to reduce spending, unlike previous years when at least some austerity measures were outlined. He described the government’s approach to expenditure reduction as one that has been continually delayed, arguing that the absence of such measures is unsustainable.
Niyazi cautioned that without decisive action to manage public spending, the Maldives risks losing control over its debt trajectory. He urged lawmakers to request detailed fiscal guidelines and expenditure control measures from the Ministry of Finance before approving the budget.
Director General Mohamed Shan of the Auditor General’s Office noted that while the projected revenue target of MVR 40 billion appeared reasonable, the absence of spending cuts and consolidation plans remained a key concern. He highlighted that austerity policies proposed in previous budgets had not been implemented and that the government’s current spending trend showed no signs of restraint.
The government had earlier considered pension and subsidy reforms to curb expenditure but later reversed these plans. Instead, President Dr Mohamed Muizzu opted to allocate a number of projects to state-owned enterprises, presenting the decision as a cost-saving measure. The move has drawn criticism from private contractors, who argue that they are being excluded from opportunities.
At the same time, the government has awarded more than 200 projects to private companies without competitive bidding, prompting the opposition Maldivian Democratic Party (MDP) to consider legal action.
Transparency issues have also been raised regarding fiscal reporting. The Ministry of Finance has not published weekly expenditure and revenue updates for several months, citing unresolved transactions from the previous administration. Finance Minister Moosa Zameer has since acknowledged that approximately MVR 2 billion in spending remains unaccounted for.
In its advisory to the government, the Auditor General’s Office stated that the deteriorating fiscal situation has made it increasingly difficult to secure external financing, leading to greater reliance on domestic borrowing. The office advised the government to adhere to its medium-term debt strategy to stabilise the fiscal position and ensure sustainability.
While the Ministry of Finance has plans for debt repayment, the Auditor General’s Office warned that the steps outlined could still increase the overall debt burden if not supported by meaningful reductions in expenditure.
