President Ibrahim Mohamed Solih has ratified the seventh amendment to the Public Finance Act which gives the president and finance minister full authority over the Sovereign Development Fund (SDF).
The Bill on Amendment to the Public Finance Act, proposed on behalf of the government by Parliamentarian Mohamed Mumthaz, was passed on February 27 with 44 votes in favour and one vote against. Previously, only the president had legal authority over the SDF.
The amendment aims to establish policies on the government accepting loans, providing guarantees and aid, as well as calculating state funds and formulating the yearly budget. It also establishes policies on maintaining the SDF and operating the state procurement system more efficiently as well as penalising parties that violate the policies. It further requires the establishment of an internal audit system and the formation of a seven-member committee to set the responsibilities for the chief internal auditor.
Additionally, the amendment requires the Maldives Monetary Authority (MMA) to maintain the SDF in a custodian account in order to use state funds for investments and repaying loans. The president will be authorised to make decisions on depositing and withdrawing funds from the SDF on the recommendation of the finance minister.
The SDF was established to ease the burden of repaying loans taken by the state to invest in development projects in the country. The SDF will be utilised if the government is met with an unprecedented economic crisis or when the administration is unable to repay loans taken for major development projects.