Maldivian Democratic Party (MDP) MP Ahmed Sameer has proposed that the Parliament take action against the government after it allegedly obtained a Rf 300 million (US$20 million) loan from the Bank of Maldives (BML) without consulting the legislature, local media has reported.
Sameer claims that the government had misled people by claiming it had sought parliamentary approval prior to obtaining the loan.
The issue of the loan was first discussed in the Majlis’ Finance Committee on June 25. After deliberating on the necessity for parliamentary approval for the loan, the committee opted to send the issue to the Counsellor General for clarification.
Kulhudufushi MP and Finance Committee member Abdul Ghafoor Moosa told Minivan News at the time that the loan could not be granted as it was not part of the state budget.
Moosa today said that the Counsellor General agreed with this opinion.
“The Counsellor General has said it should be approved by the full house. The government giving irresponsible reasons for its actions,” said Moosa.
Ahmed Nazim, head of the committee, was reported in Sun Online on June 25 as having told his committee that President Mohamed Waheed Hassan had sent the Majlis a letter on June 13 seeking permission to obtain the loan.
Two days after, however, Minister of Finance and Treasury Abdullah Jihad told the same news source that the loan had been issued in May at a time when parliament had been in recess.
“The loan had to be obtained urgently. The Parliament was in recess at the time, so we took the loan and sent the issue to the Parliament,” Jihad told Sun.
Moosa informed Minivan News that the Financial Committee did not go into recess, having business to deal with all year round.
Jihad told Sun that this type of budget support loan was accepted in the original budget and so he anticipated no legal issues with the move.
Jihad was not responding to phone calls at the time of press.
The Rf300 million budget support loan was intended to replace a $65million foreign loan that had been approved in the original 2012 budget.
Moosa claimed in June that the Rf300 million loan would be taken on a commercial basis, with high interest rates that would require the government to pay back Rf384million.
He said that the $65million loan, delayed due to incorrect paperwork, would have only been taxed at rates of around 2 percent.
Using these figures, the interest paid on the original loan would be Rf20million (US$1.3 million), whilst the interest on the new loan would be Rf84million (US$5.4million).
This year’s budget deficit is estimated to surpass Rf9 billion (US$584million) , around 27 percent of GDP
President’s Office Spokesperson Abbas Adil Riza said that the figure given by Moosa was incorrect, adding that the government was “not going to lose money on the deal”.
Abbas explained that Abdullah Jihad and other members of the current Finance Ministry had advised the government to take out the new loan as part of a “mop up” operation.
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This 300 million was already disbursed in parts before the approval I heard.
Who understands economics in Maldives? Most of us never heard a government taking loan from a government owned bank! I wonder why it never happened during Gayooms era, or...
oh! now I understand why everyone was pushed to do science...less did we know, we were made ignorant and not to question..and of course without the knowledge, how can we question!
All the three governments have mis-managed the countries finances and put of all of in a total mess that would take decades to recover.
The government borrows, businesses borrow, individuals borrow....borrowing is the way of life, where the hell are we heading? Where is the millions of dollars we earn annually from tourism and fishing?
A decade ago, mosques were donated and built for the people by businessmen as a gesture of good returns. Today, mosques are begging for assistance for renovations.What happened to the donors? soon the mosques would start borrowing....
"President’s Office Spokesperson Abbas Adil Riza said that the figure given by Moosa was incorrect, adding that the government was “not going to lose money on the deal”.
Abbas explained that Abdullah Jihad and other members of the current Finance Ministry had advised the government to take out the new loan as part of a “mop up” operation."
Spokesperson Abbas Adil Riza; Yes, the government and people like you are not going to lose money on any of these deals. It is the people who have to scrape their bottoms to pay for these!
Hypocrites like you, fed and brought up with people's money cannot have any fair judgement of other people suffering!
Good move Sameer!
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They think they have turned back the clock to Gayoom era where you don't need approval from Majlis.