Govt mulls projects delay over limited fiscal space
He said a review of the public sector investments projects scheduled for next year is underway
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By
Ahmed Naif
The new finance minister Dr Mohamed Shafeeg said on Monday that some public sector investment projects will be postponed due to the financial state of the country.
Shafeeg appeared in the parliamentary committee reviewing the proposed 2024 budget. He said his top priority at the moment is to reduce expenditure and shape policies to cover recurrent expenditure with government revenue.
On some of the measures he is taking, he said a review of the public sector investments projects scheduled for next year is underway. According to him:
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1,780 projects are planned; 317 are fresh projects
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In this case, the government is forced to look at the projects that need to be carried out and create a timeline to run the projects
"If some of the projects are not the best projects to carry out at the moment, we have to reschedule them and think differently. We are currently reviewing the projects," he said, noting that each project is included in the budget because it is important.
Shafeeg said that no projects can be carried out without funds.
"One of the biggest problems is that when the project starts, the advance is paid and there is no way to pay the payments after that. Therefore, we have to bear the burden of the previous year this year. This year's burden is being forwarded again," Shafeeg said.
"This must be brought to an end. This is in the national interest. To save the economy”.
When reviewing projects, special priority is given, the minister said, to thinking about the projects that have not yet started. He said all cost-cutting measures would be implemented in consultation with all stakeholders.
He said:
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Infrastructure projects are important to the country
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However, the projects have come at a rate that is not cut faster than the country has the capacity to implement them
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The prices of the projects are not the best
"After a thorough review, a lot of research, we will know exactly. So we are looking at planning the projects and doing things with a goal," Shafeeg said.
The minister added, the Middle Eastern countries are the main sources of funding for budget support. He said he had hope to attain the money. He described it as an optimistic number.
"2024 is very much expected to be better assistance than ever before. We are doing all these things," he said, noting that the only option is to cut costs in case the budget does not meet the planned funding.
The central bank said in its budget recommendation for next year that the most important thing for the time being is to cut government spending and reducing expenditures, especially in foreign currency. It recommended that non-essential projects be postponed.
Speaking in the budget committee meeting on Monday, Maldives Monetary Authority's (MMA) deputy governor Ahmed Imad said it would be a big challenge to raise MVR 17 billion from abroad as proposed in the 2024 budget. The MMA's advice is to seek concessional financing through bilateral relations, he said.
If the money is not raised, it will be difficult to raise money for the budget from within Maldives, he said. The reason is that the interest of Maldivian banks to buy government bonds is decreasing day by day and the financial institutions of Maldives do not have enough liquid assets at the moment.
“In that case [if the planned external funding is not available], then we will have to take cost-cutting measures such as suspending some PSIP projects,” Imad said.
