Former President Mohamed Nasheed has warned that the Maldives is now deeply entangled in a debt trap, and that the government alone cannot resolve the country’s mounting financial crisis.
In a post on X on Sunday, Nasheed said the state’s debt problem has become a national issue. He argued that the government is merely using borrowed funds to repay previous loans, often at high interest rates, rather than addressing the root causes of the crisis. “This shows the country is clearly tied up in a debt trap,” he wrote in Dhivehi.
Nasheed noted that the Maldives faces USD 1.1 billion in total debt obligations this year, including a USD 500 million payment due in April, equivalent to over MVR 15 billion. The government is attempting to raise funds through sukuk and bond sales, including a MVR 2.4 billion bond via the Pension Office to repay debts owed to private companies.
Dhivehi dhulathuge dharaneege mahsala akee adhu sarukaarah ekani hallu hoadheyne baavathuge kameh noon. E ee mihaaru gaumee mahsalaeh. Dhivehinnah anburaa dhekkun nukulhadhaana minvaruge bodu interestgai dharani nagaa, e faisaa in kuraa hama ekani kamakee kureege dharani dhehkun…
— Mohamed Nasheed (@MohamedNasheed) February 1, 2026
The bond transaction has triggered a wave of resignations at the Pension Office. Chairman Dr. Ahmed Inaaz resigned on Sunday, following earlier resignations by Saruvash Adam in October and Chief Financial Officer Hawwa Fajuwa on November 9.
Nasheed has previously expressed concern about the country’s ability to attract investors. In September, he warned of a potential default, citing waning investor confidence. He has also repeatedly criticized China’s role in the Maldives’ foreign debt, accusing it of trapping the country in unsustainable borrowing.
International credit rating agencies have maintained a ‘junk’ rating for the Maldives, making it harder to secure foreign financing. Opposition figures have questioned whether the government can refinance its obligations, especially amid reports that Cargills may seek a USD 300 million loan at a 15 percent interest rate.
Despite these concerns, President Dr. Mohamed Muizzu has insisted that the debt will be repaid on time. However, the government has yet to officially comment on the high interest rates associated with recent borrowing efforts.