President Dr. Mohamed Muizzu ratified the National Fiscal Responsibility Bill and the National Debt Bill on 3rd December 2024, introducing new legal frameworks aimed at enhancing the Maldives’ fiscal discipline and debt management. Both bills were passed by Parliament during its 55th sitting on 27th November 2024 and are set to take effect six months from their ratification.
The National Fiscal Responsibility Bill replaces the Fiscal Responsibility Act of 2013. It allows the government to borrow from the Central Bank to address cash flow needs, limited to 2.5% of the average revenue collected over the past three years. The law also requires the Ministry of Finance to develop and submit key documents to Parliament, including a Fiscal Responsibility Charter, Fiscal Strategy Statement, and Risk Statement. The Auditor General will monitor the implementation of these provisions and report findings to Parliament, which will assess the government’s fiscal performance and offer recommendations.
The National Debt Bill is intended to streamline access to financial mechanisms while ensuring responsible borrowing practices. The law outlines strategies for mid-term debt management and mandates the establishment of a new Debt Management Department within the Ministry of Finance to oversee national debt obligations. This department will replace the existing debt management division and is expected to enhance the efficiency of debt-related operations.
Both laws are part of broader efforts to improve fiscal governance, reduce financial risks, and strengthen the country’s economic framework. The government has described these measures as necessary for ensuring sustainable fiscal operations and responsible debt management while maintaining transparency and accountability in financial practices.
