Former Finance Minister Ibrahim Ameer today accused the government of trying to obscure the actual interest rate on the loan from Cargill International Financial Services to repay a sukuk due in April.

In a document shared on social media X, Ameer said the government was trying to obscure the actual interest by involving the Bank of Maldives (BML) in the process of finalizing the loan.

"Channeling borrowing through an SOE does not reduce the burden; it shifts and obscures it, potentially weakening the financial system in the process," he wrote along with a photo of the document.

Ameer said the transaction is planned in a way that instead of the government taking the loan directly from Cargill, BML will take the loan and give it to the government at an interest rate of nine percent.

In his presidential address delivered during the opening session of the People's Majlis, President Mohamed Muizzu said borrowing will not exceed nine percent and that the sukuk will be refinanced in a beneficial way.

Questioning the certainty of the nine percent rate given by Muizzu, Ameer said the Maldives' credit rating had been downgraded and no loan would be available at this rate except through concessional financing.

"One possibility - the government does not borrow directly at 14 percent. Instead an SOE - most likely BML - borrows from Cargill at 14 percent and on-lends to the government at a lower headline rate, say nine percent," he said.

He said in that scenario, the true system cost remains 14 percent while the lower rate becomes "cosmetic." He added that "the banking system carries concentrated sovereign exposure."

"This is not debt relief. The cost of debt has not fallen, it has risen. And the risk to the system has increased," he said.

Ameer said the involvement of BML in the transaction raised concerns about the bank's independence, financial strength and liquidity. He also said that a commercial bank should not be used to carry the burden of the government's debt.

Ameer, who was finance minister when the sukuk was issued, called for transparency.

"The public and investors deserve full clarity on the structure, the effective interest rate, the maturity profile, and any contingent liabilities arising from SOE involvement. Transparency is not optional in sovereign refinancing; it is essential to maintaining confidence."

The government has so far announced a plan to repay the sukuk, of which USD 150 million will be paid from the Sovereign Development Fund (SDF) and the remaining USD 350 million will be refinanced. The government has not said how it will refinance the USD 350 million.