Mahibadhoo MP Ahmed Thariq has stated that President Dr Mohamed Muizzu’s administration is actively repaying debts incurred by two previous governments, addressing growing public concern over the possibility of the Maldives facing bankruptcy.

Speaking during the President’s visit to Alifu Dhaalu Mahibadhoo, Thariq stated that it was important to understand how the country’s debt had accumulated over time. He noted that the Government faces substantial repayment obligations next year, much of which stems from loans and bonds taken under former administrations.

He highlighted that the government of former President Abdulla Yameen Abdul Gayoom had issued a USD 250 million sovereign bond, while the subsequent administration had mortgaged assets such as Dharumavantha Hospital and Aminiya School to refinance that debt and secure additional funds. Thariq added that loans taken through state-owned enterprises also contributed significantly to the national debt, all of which are now being repaid by the current government.

According to Thariq, the Maldivian economy generates approximately USD 1 billion in annual revenue, but a considerable portion is spent on fuel imports, leaving limited resources for debt servicing. He also pointed out that the previous government had converted the Sovereign Development Fund into Maldivian rufiyaa, increasing the financial burden on the current administration.

Thariq stated that despite these challenges, the Government has taken steps to stabilise the economy, including amending the Foreign Exchange Act to channel more dollars into reserves for debt repayment. He added that the Government is negotiating with India and China to secure concessions on repayment terms.

He further noted that around USD 800 million in debt payments are due next year, but expressed confidence that the Government’s fiscal and monetary reforms would deliver positive results. According to Thariq, as loans are repaid and foreign currency reserves improve, the value of the dollar in the domestic market is expected to stabilise.