President Dr Mohamed Muizzu has ratified the National Fiscal Responsibility Bill, which aims to strengthen the Maldives' fiscal framework and ensuring sustainable economic growth.

Passed by Parliament on November 27, 2024, the bill introduces robust measures to enhance transparency, accountability, and fiscal discipline in state financial operations.

Proposed by Thulusdhoo constituency MP Ibrahim Naseem, it sets out clear guidelines to maintain fiscal sustainability in compliance with legal and regulatory obligations.

Key provisions include allowing the Government to borrow from the Central Bank for cash flow management, with a borrowing cap set at 2.5 per cent of the average revenue collected over the preceding three years. This cap ensures responsible borrowing practices without overburdening the economy.

The legislation requires the Finance Minister to submit essential fiscal documents to Parliament, including a Fiscal Responsibility Charter, Fiscal Strategy Statement, Budget Statement, and Risk Statement. These documents will serve as a detailed roadmap for fiscal planning and risk management.

The first Fiscal Responsibility Charter under this law must be published in the Government Gazette within six months of the law’s ratification.

The Auditor General is tasked with preparing reports on the law’s implementation for parliamentary review. These reports will support fiscal impact analyses, evaluate government performance, and offer actionable recommendations.

The new law, which takes effect six months after its publication in the Government Gazette, replaces the Fiscal Responsibility Act of 2013.

By nullifying the previous legislation, it establishes a modernised framework for fiscal governance, promoting sustainable growth and accountability in public finance.