President ratifies bill granting minister control over debt service fund
MMA had been managing the SDF, but all decisions related to deposits and withdrawals are taken by the finance minister and the president.
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President Ibrahim Mohamed Solih on Wednesday ratified an amendment giving powers to the finance minister to manage the Sovereign Development Fund(SDF).
The bill submitted by Mohamed Mumtaz of Fuvahmulah South constituency on behalf of the government was reviewed by the public finance committee and passed late February.
One of the key amendments in the bill was the clauses that give legal weight to the SDF:
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Deposit of funds in the fund setup for foreign debt servicing and how to spend from the fund will be decided by the president on the advice of the finance minister
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The finance minister will be responsible for managing the fund
Parliament's public finance committee has made some changes to the bill, but it did not change any clause related to the SDF. With the bill now ratified, the SDF will be a fund to be maintained under certain provisions of the Public Finance Act.
The clauses added to the Public Finance Act with respect to SDF incude:
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SDF funds should be kept by opening a separate account at the central bank
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SDF should not be merged with the public bank account
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President must set up a five-member committee to decide how to invest sovereign funds
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The committee has to be constituted on the recommendation of the finance minister
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Regulations for running SDF should be compiled
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Should be audited and accounts prepared
Maldives Monetary Authority (MMA) had been managing the SDF, but all decisions related to deposits and withdrawals are taken by the finance minister and the president. There have been concerns from various quarters that foreign currency in the fund is being converted in local currency.
One of the most notable amendments made by the Public Finance Committee to the bill is the change in the clause that empowers only the minister to borrow money in the name of the state and issue guarantees. After consultations with the relevant authorities, the committee concluded that as is already in the law, it is a decision taken by the president when the finance minister submits it to the president.
