Former Economic Minister Fayyaz Ismail has warned that the country could run out of foreign exchange reserves to pay the USD 500 million sukuk due in April, and could endanger the country's sovereignty by allowing foreigners to own land.

In a post on social media X on Sunday (January 18), Fayyaz said that the government should prepare in advance to pay the sukuk, but has not yet shown a reliable fiscal plan.

Referring to rumors of US-based Cargill Financial Services International (CFSIT) offering USD 300 million at very high interest to repay sukuk, Fayyaz said "rushed private borrowing at opaque terms" show "a clear absence of planning."

The government has not commented on reports about seeking a loan from Cargill.

Noting that President Mohamed Muizzu came to power criticizing the debt of the COVID-19 era, Fayyaz said his administration had failed to present an economic reform plan over the last two years.

He warned that this could empty the country's reserves and sovereign development funds, "pushing us into a position we never should have reached."

"More worrisome, however is the possibility of threats to our sovereignty as may be suggested from rumours of land sales to foreign countries," Fayyaz said.

He further highlighted that the Solih administration took out the debt to cover the MVR 25 billion revenue deficit caused by the COVID-19 pandemic and to maintain jobs and businesses.

"Compare that to this government. Debt today is being used to satisfy political whims, from military drones to an ever expanding list of political appointees," Fayyaz said.

He called on the government to be more transparent because "the Maldivian population deserves to know if we are sliding down a path towards an imminent economic collapse or a safe harbour and prosperity."

"The deafening silence by the government and realities on the ground points to harder times," he warned.