The Mohamed Muizzu administration has utilised a significant portion of deposits in the Sovereign Development Fund (SDF), local media sources have revealed. The SDF was originally established to address debt, as well as for investment and to increase state revenue.
When President Mohamed Muizzu took office, fund receipts totalled US$2 million. Since his inauguration on 17 November 2023, the fund’s balance had increased to as much as US$70 million.
However, with the financial crisis facing the Maldives, a significant portion of the SDF’s funds has recently been withdrawn, according to local media sources.
Information on the SDF is not published, and as such, the current total sum within the fund cannot be accurately established. However, local news outlet Adhadhu quoted reliable sources as confirming that, as of Thursday, the SDF’s balance was approximately US$20 million, which could indicate a withdrawal of approximately US$50 million.
Funds were used to pay off a Housing Development Corporation (HDC) loan, sources were quoted as saying.
“It’s a huge embarrassment that it’s reached this point,” one source told the paper.
Even with the financial situation deteriorating, the administration has been seen as ineffective in cutting costs, with many observers pointing to the numerous political appointees still drawing government pay cheques.
The SDF, established in 2017 during the Abdulla Yameen Abdul Gayoom administration, had, until December 2023, built up the bulk of its reserves in Maldivian Rufiyaa (MVR). The entire reserve was converted into USD under the Muizzu administration’s ‘Week14’ roadmap.
SDF receipts include airport development fees, cross-subsidies, and other revenues, with around 80 percent of the money invested in Treasury bills.
The administration had previously stated that it aimed to build a reserve worth MVR 9.7 billion by the end of 2024, the bulk of which would be used to pay off debt in 2025 and 2026.