State debt bill accepted and sent to committee for review following three days of debate

The state debt bill submitted to the parliament by the government has been accepted and sent to Public Accounts Committee for review following three days of debate.

The debt bill is among the 37 bills that the government plans to submit in the ongoing session of the parliament. The bill was submitted to the parliament last Tuesday with the sponsorship of Funadhoo MP Mohamed Mamdhooh.

Mamdhooh cited the main purpose of the bill as managing the state’s debt while presenting the bill on Sunday.

Following three days of debate, the bill was accepted at Wednesday’s parliamentary sitting with the unanimous votes of 78 MPs in attendance. Subsequently, it has now been forwarded to the Public Accounts Committee for review.

The debt bill includes provisions on:

• Procedure on borrowing loans
• Procedure on managing loans
• Procedure on disclosing details and reporting regarding state debt
• Procedure on providing sovereign guarantee for loans withdrawn by local councils and state-owned companies

A debt management office must be set up within six months after the bill is passed. This office will handle all responsibilities related to overseeing and managing state debt, that Finance Minister is tasked with.

Furthermore, the legal obligations and personnel of the debt management department under the Finance Ministry are to be transferred to this new debt management office prior to the bill's enactment.

Mahmdhooh, who sponsored the bill, cited ensuring long-term sustenance of the nation’s economy as another purpose of the bill. He added the bill would pave the way to assess the impact on the nation’s economy and future before withdrawing loans.

The three-day debate on the bill saw heated exchanges between pro-government MPs and opposition MPs.

In this regard, pro-government MPs accused the previous administration of mismanagement, citing the nation’s debt had climbed up to MVR 120 billion at the conclusion of their term. 

President Dr. Mohamed Muizzu, on Thursday, announced stringent measures to cut state expenditure including cutting down political posts and the cancellation of events planned for this year’s Intendance Day.