The Majlis has decided today to submit the case of the requirement of Majlis approval for the government’s loans planned for next year, to a committee for investigation. It had been advised by Fathimath Filza, the Council General of the People’s Majlis, that these loans cannot be obtained without the approval of the Majlis. The case presented to Majlis by President Mohamed Nasheed to investigate the loans and loan guarantees, was sent to a Committee for investigation by Abdulla Shahid, President of the Majlis.
USD 354.4 million (Rf 5,464 million) was included as loans in the government’s estimated budget for next year, which was sent to the Majlis for approval.
In a document sent by the Majlis Legislative Department, endorsed by Council General Fathimath Filza, to the President of the Majlis Abdulla Shahid says that even though the details of the loans are included in the budget for next year, new loans which the government plan to take should be submitted to the Majlis by the President for approval.
Section 5.1 of the Treasury Law states that the President should be informed by writing of any loan taken by a government institution, and the President should in turn submit this for the approval of the Majlis. There will then be a vote in the Majlis to endorse the loan.
The legal document submitted by Filza states that the Majlis also needs to approve the guarantee for the loans to be issued by the Housing Development Finance Corporation to private parties as assistance for the completion of buildings in Male’. The document said that the budget proposal includes details of this guarantee. The Constitution states that the budget should be submitted to Majlis by the Finance Minister, however, the Treasury Law states that request for approval of this guarantee should be submitted to the Majlis by the President.
The projects for which the government requests for loans in the budget for next year include USD 150 million for housing projects from China’s Exim Bank, and USD 5.5 million from the Asian Development Bank for the development of small and medium-sized enterprises, USD 10 million from Islamic Bank for the development of medium-sized enterprises, a further USD 4 million from Islamic Bank, USD 3 million from Ifad, USD 8.4 million from OPEC, USD 1.25 from Saudi, and USD 100 million as stand-by credit facility.