"We have paid about MVR 13 billion in these seven months. That is the truth that our opponents and rivals want to hide. We will speak the truth."
This was a proud statement made by President Dr. Mohamed Muizzu at the opening ceremony of the People’s National Congress (PNC) campaign hall on Sunday night. External debt, domestic debt and the Sovereign Development Fund were the most important highlights of the President's speech.
While MVR 18 billion has been spent from the budget so far this year and with 72 percent of that amount spent on debt repayment, the biggest question is how the state finances can be arranged with the remaining MVR 5 billion.
"Is the remaining MVR 13 billion all 'debt' of the previous government? Is this current government not opening offices or buying drones? Are the President and Cabinet ministers not making trips?" former Finance Minister Ibrahim Ameer questioned over the figures.
The remaining MVR 5 billion is not enough to pay the salaries of the employees. While a large number of political posts have been created, Finance Ministry statistics show that MVR 5.5 billion has been spent on the salaries of the employees alone.
"So far this year, MVR 200 million more has been spent on administrative and operational expenditure alone. Salaries and state operating expenditures alone have increased by MVR 600 million. The number of political posts has risen from 700 to 2000," Ameer stated in a post on X.
Fiscal reports show that spending on employees is increasing exponentially. Spending on employees has increased by 11 percent this year. Recurrent expenditure also increased by MVR 617 million compared to the previous year.
All the reform measures planned in the budget have been delayed and the government has started some projects which were not included in the budget. As a result, the state budget and cash flow situation has further deteriorated.
These include increased political posts, introduction of new services such as air ambulance services, purchase of drones, school AC project, student loans for all applicants, nationalism project and financial assistance to various organizations and media.
The government claims to have cut spending, but the official financial accounts show a different picture. Costs were reduced only by postponing projects.
President made false statements about SDF
"At the end of the last government, the Sovereign Development Fund (SDF) had only USD 2 million. It is the reserve to pay off foreign debt. The money in that fund was used up by the former government."
This was the President's statement about the SDF in Maldives. He claimed that the fund has now increased from USD 2 million to USD 54 million. The fund is managed by the Maldives Monetary Authority (MMA).
The SDF was created in 2017 to pay off the state debt. Most of the money in the fund is invested. A year later, when former President Abdulla Yameen’s administration ended, the fund had USD 1.9 billion.
According to the State Finance Rules, the SDF account is maintained by the MMA separately from the public bank account.
"At the end of November 2023, the fund size was around MVR 7.3 billion. That is an increase of MVR 5.4 billion in five years," former Finance Minister Ameer said.
Ameer said that is USD 2 million in the MMA’s SDF dollar account and USD 139 million that had been invested.
According to data obtained by Adhadhu from the Finance Ministry through a Right to Information (RTI) request, the SDF had MVR 7.3 billion as of August last year. This includes MVR 2.6 billion in domestic currency and USD 299 million (MVR 4.6 billion) in foreign currency.
"Claims that this government started depositing money in dollars to the SDF is also untrue. We stopped depositing money in dollars in 2020. It was under an agency agreement with the MMA. However, we started depositing money in dollars again in early 2023," Ameer said.
Most of the money deposited in the fund was invested in Maldivian Rufiyaa and US dollar T-bills. The balance of the investment was in MVR and USD fixed deposit accounts.
The financial figures show that there is no truth in President Muizzu's claim that the dollars in the SDF had been exhausted.
Records show that around MVR 519 million or about USD 33 million was deposited in SDF during this year. During the same period last year, the MDP government contributed MVR 479 million to the fund.
