96 percent of projected loans and grant assistance not received

It has been revealed that, in addition to the state's failure to meet its projected revenue for February, 96 percent of the loans and grant assistance projected to be received in the state budget for this year has also not been received.

The state revenue had significantly decreased in February.

Ruling PNC’s Central Hithadhoo MP Ahmed Azan disclosed that the loans and grant assistance projected to be received under cash flow reports had not been received amid efforts by the government to raise around MVR 15 billion with the sale of a plot of land from Hulhumale’ to the Maldives Monetary Authority (MMA).

As per information disclosed by the lawmaker:

State earned MVR 5.5 million in revenue as of February 27^th although MVR 9.1 billion was projected, marking a decrease of MVR 3.6 billion or 39.5 percent

State received MVR 40 million in grant assistance during the aforesaid period although MVR 408 million was projected, marking a decrease of MVR 368 million or 90 percent

State received MVR 300,000 in loans during the aforesaid period although MVR 664 million was projected, marking a decrease of MVR 663.7 million or 99.95 percent

As such, the government had not received 96 percent of loans and grant assistance projected to be received during this period.

Azaan called on the government to immediately implement cost reduction measures, as advised by the International Monetary Fund (IMF).

When questioned by journalists regarding the decline in state revenue this year, Economic Minister Mohamed Saeed said he does not know the reason.

Notably, the biggest decline in state revenue comes from import duties which fell from MVR 385 million to MVR 138 million – marking a 64 percent drop. The sharp dip in import duties prompted questions as to whether the free trade agreement with China – which took effect at the start of this year - contributed to the decline. Saeed rejected the link when questioned about it last week, but did not provide a reason for the decline.

While reliable sources have confirmed the government’s decision to raise around MVR 15 billion with the sale of a plot of land from Hulhumale’ to the MMA to Sun, the administration has yet to make an official comment regarding the subject.

The MMA has not made a comment either.

Money printing or monetary financing is the practice of a government borrowing money from the central bank to finance public spending instead of selling bonds to private investors or raising taxes. It is not limited to the act of physically printing money.

As such, economic analysts who spoke with Sun believes that raising money by selling land to MMA accounts to money printing.

However, ruling PNC lawmakers have repeatedly denied any plans to print money.

The MVR 56.6 billion annual budget passed for 2025 includes projected savings of MVR 7.7 billion in expenditure.

However, despite the repeated warnings by international financial institutions to cut costs, there’s mounting concern that the administration hasn’t been able to cut down expenditure as planned as is digging itself deeper into debt.