Solih calls for greater financial powers for local councils

Former President Ibrahim Mohamed Solih has said national development can only be achieved by granting financial powers to local councils.

Speaking at a rally in AA. Bodufolhadhoo on Thursday, Solih said political and executive authority, along with financial sufficiency, must be given to rural councils if development is to reach all parts of the country.

He recalled efforts during his administration to implement the Decentralisation Act, noting that the draft faced resistance within his Cabinet but was ultimately passed. “There was talk that it would be difficult to run the government if the law was passed. However, I decided to go ahead with it,” he said.

Solih argued that while the system may create challenges for central government, it ensures that the voices of local communities are heard. He pledged that an MDP government would restore powers to councils if changes introduced by the current administration remain in place.

The former president also criticised the role of state-owned companies in local projects, alleging that contracts were being used to influence council elections.

The government recently approved amendments to restrict certain financial powers of councils, particularly in the final year of their term. Councils with less than one year remaining cannot, without government approval:

The current council term ends in May, leaving around 10 months before expiry. Under the amendments, their activities will now require government consent.

The amendments also narrow councils’ ability to operate businesses. Business ventures must:

Businesses failing to meet these conditions must cease within three months of the bill’s passage.

Other provisions include stricter rules on council bank accounts, deductions of outstanding taxes or utility bills before state fund transfers, and a prohibition on charging rent for land or buildings allocated for basic services such as electricity.