The previous administration issued sovereign guarantees for loans worth US$1.36 billion, Finance Minister Ibrahim Ameer informed the press Monday, promising a new era of transparency in government finances.
Of the guaranteed debt, US$666 million has been disbursed so far to 24 companies, he noted, pledging to publicise their identities and details of the loans.
With the exception of one private company, guarantees were issued for loans taken by state-owned enterprises, Ameer said.
According to newspaper Mihaaru, a sovereign guarantee was issued for a US$127.5 million loan taken by MP Ahmed Siyam Mohamed, leader of the Maldives Development Alliance, a coalition partner of the former ruling party. The loan was taken to develop the Irufushi resort under his ‘Sun Siyam’ brand.
Citing published government data, the finance minister noted the country’s public debt stands at US$2.8 billion or 53 percent of GDP. But total debt could exceed US$3.7 billion when guarantees are taken into account, including US$1.8 billion in foreign debt.
About MVR4 billion (US$259 million) is allocated in the 2019 budget for debt servicing, including MVR2 billion for interest payments.
At US$1.4 billion, of which US$857 million has been disbursed, most of the foreign debt is owed to China for financing former president Abdulla Yameen’s infrastructure scale-up.
After taking office on November 17, the new administration also found that the government owed MVR2.4 billion (US$156 million) as payables to private parties and state-owned enterprises, Ameer noted, including parked and posted invoices of MVR824 million and purchase orders worth MVR428 million.
Some MVR786 million was owed to the State Trading Organisation, MVR151 million to the State Electricity Corporation, MVR103 million for the Aasandha health insurance scheme, MVR101 million to the Fenaka Corporation, and MVR65 million to Island Aviation Services.
On the other hand, the state is owed MVR1.3 billion, including MVR514 million in loans issued to companies and MVR30 million owed by individuals.
Ameer, who was part of a ministerial delegation that visited India last month, said the new administration sought US$200 million as budget support as well as investment for infrastructure projects.
Agreements are expected to be finalised during President Ibrahim Mohamed Solih’s maiden official visit to New Delhi on December 17.
If budget support is forthcoming from India and other donor countries such as UAE and Saudi Arabia, plans to sell a US$150 bond in the international finance market would be scrapped, Ameer said.