The Ministry of Finance, while noting that even though the economy is growing the state’s financial situation is precarious, has informed government agencies to take strong measures to cut expenditure. Agencies have been asked to seek permission for all expenditure exceeding MVR 35,000.

In a circular, issued by the Minister of Finance Mohamed Shafeeq, agencies have been ordered to cut spending in seven areas. The directive also states that recruitment of new employees, salary increases and overtime pay cannot move forward without the express permission of the Ministry of Finance.

No spending on upkeep, or repairs, can be carried out from the recurrent budget except for those that have already started, have been already approved or are deemed essential.

Repairs costing less than MVR 35,000 will require permission of the Finance Executive obtained through the Goods and Service Form via the ministry’s Bandeyri portal. Capital expenditure exceeding MVR 35,000 will need the ministry’s direct approval.

Procurement and tendering of any project under the Public Sector Investment Program (PSIP) budget should not be conducted through the Bandeyri portal’s Goods and Services Form without the ministry’s prior sign-off.

Expenditure waivers should include engineering estimates of the projects, the full scope and the total cost of the tendered work, the ministry said.

The Finance Ministry has extended the same advice to local councils, additionally asking that expenditure be carried out from block grant and own revenue funds within the council budget and to focus on increasing expenditure efficiency.

Agencies were generally advised against;

  • Creating additional new positions
  • Changing salary structures
  • Creating new allowances
  • Changing names, ranks, salaries and allowances
  • Engaging in overtime except for essential work outside official hours

In addition, all international air travel must be approved by the ministry and approval should also be obtained for all local travel, by land sea or air, exceeding MVR 35,000.

The ministry has also asked agencies not to award new scholarships outside the national scholarship schemes. All training and short-term programmes abroad that are not fully sponsored have also been suspended.