Former president Abdulla Yameen Abdul Gayoom has criticised the Muizzu administration over an alleged plan to borrow at an interest rate of 17% to refinance a maturing sukuk, calling the move reckless and harmful to the country’s finances.
Speaking at a People’s National Front (PNF) rally on Thursday night, Yameen said the government was seeking a high-interest loan to meet upcoming debt obligations linked to a $500 million sukuk due on 8 April.
According to reliable sources, the government plans to borrow about $300 million from Cargill Financial Services International to refinance the sukuk. The government has not publicly disclosed any such borrowing plan.
Yameen did not name the lender in his speech, but appeared to be referring to Cargill Financial Services International.
He said an interest rate of 17% falls outside normal lending practice and compared it to rates charged by loan sharks. He claimed borrowing at such a level amounted to financial abuse of a country under pressure.
“That rate reflects the credit standing today. No country would choose to borrow at such a level, whether short term or long term,” Yameen said.
Yameen linked the high interest rate to the country’s weak credit profile, saying lenders demand such rates because they know the state must raise funds urgently, exposing the fragile condition of public finances.
Global rating agencies Moody’s and Fitch Ratings have downgraded the Maldives to a high-risk investment category. Financial experts say such ratings make it difficult for countries to secure low-cost borrowing or issue sukuk at reduced yields.
Yameen also questioned official debt figures, saying that while authorities place total debt at MVR 160 billion, the actual figure is far higher. He added that the state continues to roll over existing loans rather than repay principal amounts, deepening long-term financial risks.