Gov’t Will Propose MVR 7 Billion Supplementary Budget This Year, Says Ameer

Former Finance Minister Ibrahim Ameer has warned that the government may need to propose an MVR 7 billion supplementary budget this year if it continues with its current fiscal approach.

Speaking at a Maldivian Democratic Party (MDP) press conference yesterday, Ameer noted that the administration has set aside cost reduction measures outlined in the state budget. He highlighted key provisions, including restricting basic pension disbursements to eligible recipients and reforming public subsidies and pensions.

advertisement

advertisement

advertisement

Ameer pointed to a shift in the stance of President Dr Mohamed Muizzu and senior officials regarding these measures. He noted that while the budget had initially aimed to reduce subsidies, the President has instead pledged to maintain or even increase existing subsidies, Aasandha, and pensions. He emphasised the importance of Aasandha reforms to strengthen the healthcare sector but expressed concern that these changes were not aligning with the budget plan.

The government had estimated that cost-cutting measures would save MVR 7.7 billion. However, Ameer argued that there has been no effort to implement these reductions, even as the year progresses. He also highlighted an increase in political appointees and state-owned company employees, further complicating efforts to achieve the projected savings.

If the administration continues on this trajectory, Ameer believes an MVR 7 billion supplementary budget will be required, with no clear means of financing it. He criticised the government for exceeding its allocated budget in areas such as travel expenses, administrative costs, and political appointments.

Last year, the Parliament initially approved a budget of MVR 49.8 billion, later increasing it to MVR 55 billion through a supplementary budget in October. This raised the total budget deficit to MVR 18 billion, equivalent to 16 percent of GDP.

For 2025, the Parliament has approved a projected state budget of MVR 56.6 billion, with the administration assuring that it will be adhered to.

Ameer Criticises Gov’t’s Failure to Improve Financial Health

Former Finance Minister Ibrahim Ameer has criticised the government for failing to take concrete steps to improve the state’s financial health. 

He stated that despite promises to address fiscal challenges, the administration has not implemented measures to recover outstanding revenue or control expenditure.

Citing government statistics, Ameer highlighted a significant rise in unpaid revenue owed to the state. He referred to President Mohamed Muizzu’s earlier pledge to reduce national debt by collecting outstanding dues but argued that no substantial efforts had been made to recover these funds.

According to Ameer, the total outstanding revenue—excluding penalties—stood at MVR 7.9 billion by the end of the last quarter of 2023. By the end of 2024, this figure had increased to MVR 10.9 billion, marking a 38% rise. 

Ameer further criticised the government’s inability to implement cost-cutting measures outlined in the national budget. The budget projected savings of MVR 7.7 billion through expenditure reduction; however, as of January 2025, no significant steps had been taken to achieve these savings. He expressed doubt that the government would meet its cost-cutting targets and warned that a supplementary budget of MVR 7 billion might be required before the end of the year.

Despite the administration’s assertions of financial discipline, Ameer warned that expenditure continues to rise unchecked. He urged the government to take immediate action to recover outstanding revenue and control spending to prevent further deterioration of the state’s financial position.