Fayyaz Says Gov’t Has No Credible Plan for USD 500m Sukuk Repayment

Former Maldivian Democratic Party (MDP) chairperson Fayyaz Ismail has said the government has failed to present a credible plan to repay a USD 500 million sovereign Sukuk maturing in April, despite having long been aware of the obligation.

In a post on X, Fayyaz, who also served as the Economic Minister during the previous administration, said the Sukuk, which falls due in less than three months, represents a major external liability that any government should have planned for well in advance. He said refinancing sovereign debt is a standard fiscal tool used to manage large repayments while safeguarding foreign exchange reserves.

Fayyaz pointed to the 2021 refinancing of a maturing sovereign bond through the Maldives’ first international Islamic Sukuk under the previous MDP administration, saying the move helped stabilise reserves and maintain investor confidence following the COVID-19 pandemic.

In less than three months, this April, a USD 500 million sovereign Sukuk falls due, a major external obligation that any serious government would have planned for well in advance. Refinancing sovereign debt is not unusual. It is a standard and prudent tool used by governments to…— Fayyaz Ismail (@faya_i) January 18, 2026

He criticised the current administration for previously attacking debt accumulated during the pandemic period, while failing to deliver fiscal reforms or publicly outline a repayment or refinancing strategy more than two years into its term.

Fayyaz warned that the absence of a clear plan could result in last-minute measures, including partial repayment, rushed private borrowing under opaque or unfavourable terms, or heavy drawdowns from international reserves and the Sovereign Development Fund to meet the April deadline. He said such actions could undermine investor confidence, weaken foreign currency buffers and leave the country exposed to external economic shocks. He also referred to circulating rumours of land transactions with foreign countries, raising concerns about transparency and potential implications for national sovereignty.

Earlier this month, Minister of Finance and Planning Moosa Zameer expressed confidence in the country’s ability to meet its debt obligations, attributing this to measures implemented under President Muizzu’s leadership. He said the steps taken were the result of two years of disciplined fiscal efforts by the administration. The USD 500 million Sukuk was issued in 2021 by the previous government, with annual interest payments of USD 50 million, split into two tranches of USD 25 million. Zameer said then that the government has allocated USD 603.1 million in 2026 specifically for the repayment of the bond.

Fayyaz said the situation reflected a failure of effective debt management and planning, and called on the government to clearly disclose how it intends to manage the upcoming Sukuk maturity.