Last Government Abused Sovereign Development Fund: President

The government of President Ibrahim Mohamed Solih was irresponsible with state funds and had abused the Sovereign Development Fund, according to President Dr. Mohamed Muizzu.

The President was responding to a question submitted via SMS from a member of the public at the ‘Aha’ Forum.

The President said the dollar shortage could be resolved as soon as the economy improved. When he took office, the external debt was very high, and on the day he took office on November 17th, the government owed 120 billion MVR in external debt and 9 billion MVR in domestic debt.

Due to their economic mismanagement, the previous government chose to dip into the Sovereign Development Fund and change the funds from US Dollars to Maldivian Rufiyaa, which is not valid for foreign debt repayment. The Sovereign Development Fund exists as a form of security to ensure the government is able to pay off debt owed to foreign entities for development projects carried out in the country.

The President said that while the leaders of the previous government talk about not paying the people, the government is now in the process of paying the 9 billion MVR that was not paid to the people when their administration had ended. The President noted that the economy is in dire straits due to the previous government’s debts.

The first step taken by the government to revive the economy was to stop printing money, he said, adding that the international financial institutions had praised the decision taken by a government in such a difficult situation. The President noted that the decision was not an ordinary one.

"The dollars in the Sovereign Fund to pay off foreign debt were emptied and exchanged to Maldivian Rufiyaa by the last government. So we are now starting to deposit that [dollar amount to the prior level]. We are also submitting a bill [to Parliament] to protect the Sovereign Fund," he said.

The President said the government is looking at what can be done in various sectors to improve the economy and that the dollar shortage will be resolved soon.