Finance Minister Dr Mohamed Shafeeq has categorically denied allegations that the government had borrowed funds from the Maldives Monetary Authority (MMA) to manage state expenses this year. The statement was made in response to former President Abdulla Yameen’s assertion that the government had taken MVR 14.7 billion from the MMA reserve, an act he compared to printing money.
Dr Shafeeq clarified that all state expenditures this year have been covered through revenue generated by the government and the sale of Treasury Bills (T-Bills), which carry interest rates ranging from 3.5 to 4.6 percent. As of the first week of June, state revenue stood at MVR 15.4 billion, while expenditure from the annual budget reached MVR 18 billion.
The Minister emphasized that since January, the government has not tapped into any funds from the MMA, not even the permissible one per cent of the state’s total income from the past three years, as outlined in the Fiscal Responsibility Act. This one per cent equates to MVR 270 million.
Dr Shafeeq acknowledged that funds were overdrawn from the MMA until December of last year but reiterated that no overdraws have occurred since then. “We’ve consistently stated that expenses exceed the revenue generated. Consequently, we need to borrow money to cover these expenses. However, contrary to the President’s claims, we have not taken a high-cost loan,” he explained.
He further clarified, “The state is legally entitled to one per cent from the MMA. So far this year, we have not utilised this provision. According to the law, up to MVR 271 million can be overdrawn, but we have refrained from doing so.”
In a related discussion last Sunday at the inauguration of the new ruling party, the People’s National Congress (PNC) hub, President Dr Mohamed Muizzu claimed that the government has paid off MVR 13 billion in debt since assuming office. Former President Abdulla Yameen countered this by citing Maldives Inland Revenue Authority (MIRA) data, which indicated that only MVR 12 billion was generated in revenue, while expenses totalled MVR 13.7 billion, prompting questions about the source of the additional MVR 1.7 billion.
According to Ministry of Finance data, as of 6th June 2024, the state has collected MVR 12.4 billion in tax revenue, MVR 2.7 billion in non-tax revenues, MVR 9.3 million in capital receipts, and MVR 156.5 million in grants.
The MMA’s report from May also corroborates the Minister’s statements, showing that the last instance of money being printed was in December of the previous year. In December, around MVR 2 million was overdrawn, following an overdraft of MVR 1.7 million the preceding month. The report indicates no withdrawals from the MMA this year.
