Bill requiring economic impact reports in taking loans submitted

An amendment has been submitted to the Public Finance Act that suggested compiling an impact report on the economy and state finances prior to the government taking a loan or issuing guarantees.

The amendment was put forth by an opposition Progressive Party of Maldives parliamentarian, MP for Mahibadhoo Ahmed Thoriq, which asked the Minister of Finances to present the impact report to the President, followed by the Parliament.

Furthermore, it stated that a guarantee for the loan should be given after it passed from voting in the Parliament.

The purpose of the amendment was said to be solving the possible hardships that may be faced in repaying state debts in the coming days, due to the impacts of Covid as well as the Russia-Ukraine conflicts.

The bill also noted that it should be ensured that such debts are only taken to fund an absolutely necessary infrastructure project or something that increases state earnings.

In addition to this, the amendment asked to gain advice from the governor of Maldives Monetary Authority (MMA) prior to any of these transactions.

By the end of the first quarter of this year, state debt is at MVR 98.9 billion. This is 113 percent when considering Domestic Gross Product (DGP).