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IMF Country Report No. 22/10
MALDIVES
TECHNICAL ASSISTANCE REPORT—REVISING THE FISCAL RESPONSIBILITY ACT
January 2022
This Technical Assistance report on Maldives was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed in April 2021.
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Title page
FISCAL AFFAIRS DEPARTMENT
Maldives
Revising the Fiscal Responsibility Act
Ozlem Aydin, Laura Doherty, Nabil Hamliri, Ian Lienert, and José Miguel Ramos Carrasco
Technical Report
January 2022
Contents
ACRONYMS
PREFACE
EXECUTIVE SUMMARY
KEY RECOMMENDATIONS
I. INTRODUCTION AND CONTEXT
A. Introduction
B. Experience with the 2013 Fiscal Responsibility Act
C. Context in Maldives for Amending the FRA
II. REVIEW OF THE OBJECTIVES, DEFINITIONS, AND COVERAGE OF THE NEW FRA
A. Main objectives of the FRA
B. Definitions
C. Coverage
D. Recommendations
III. NUMERICAL FISCAL RULES: OPTIONS FOR THE NEW FRA
A. Principles-Based and Rules-Based Approaches to Medium-Term Fiscal Management
B. Accountability of the Minister of Finance
C. Specifying the Charter of Fiscal Responsibility
D. Recommendations
IV. IMPROVING THE REPORTING OF FISCAL POLICY INTENTIONS
A. Clarifying the FRA’s Requirements for Fiscal and Debt Strategy Reports
B. Extending the FRA’s Documentation Requirements
C. Timing and Publication of the Fiscal Strategy Report
D. Recommendations
V. IMPROVING ACCOUNTABILITY AND EX- POST FISCAL REPORTING
A. Importance Of Ex-Post Compliance Reports
B. Sanctions
C. Introducing New Reporting Requirements
D. Recommendations
VI. ENHANCING FISCAL OVERSIGHT INSTITUTIONS
A. The People’s Majlis And Its Committees
B. Auditor General’s Office
C. An Independent Fiscal Institution?
D. Recommendations
VII. FRA FOR MALDIVES: OTHER ISSUES
A. Integrating the New FRA Into the Ongoing PFM Legal Reform Agenda
B. Transitional Issues
C. Recommendations
References
BOXES
1. Escape Clauses in Fiscal Responsibility Acts
2. Institutional Models of IFIs
FIGURES
1. Maldives: Fiscal Developments
2. Possible “Universes” for the Coverage of the FRA
3. Principle-Based and Other Approaches to MTFF and Annual Budgeting
4. Steps of a Principles-Based FRA
5. Role of the Fiscal Strategy Report
TABLES
1. Performance of Legislated Fiscal Rules
2. Fiscal Principles and Fiscal Objectives: Examples of Different Documents
3. Are Medium-Term Fiscal Principles, Objectives, and Frameworks Included in Law?
4. Current Budget Calendar
5. Calendar of Publication for Annual FRA Documents
ANNEXES
I. Draft New Fra Proposal
II. Fiscal Strategy Report Outline
III. Outline of a Fiscal Risk Statement Outline
IV. Key Elements of a Final Budget Outcome
V. Using A Debt Sustainability Analysis To Inform Medium-Term Fiscal Objectives
VI. Choosing Operational Targets In Maldives
Acronyms
| ACA | Accountable government agencies |
| AGO | Auditor General’s Office |
| COFOG | Classification of the functions of government |
| DSA | Debt sustainability analysis |
| EU | European Union |
| FAD | Fiscal Affairs Department of the IMF |
| FRA | Fiscal Responsibility Act |
| GFS | Government Finance Statistics |
| GFSM | Government Finance Statistics Manual |
| IFI | Independent fiscal institution |
| IFRS | International Financial Reporting Standards |
| IMF | International Monetary Fund |
| IPSAS | International Public Sector Accounting Standards |
| LIC-DSF | Debt Sustainability Framework for Low-Income Countries Framework |
| MMA | Maldives Monetary Authority |
| MOF | Ministry of Finance |
| MPAO | Maldives Pension Administration Office |
| MTFF | Medium-Term Fiscal Framework |
| MTFS | Medium-Term Fiscal Strategy |
| MTDMS | Medium-Term Debt Management Strategy |
| MVR | Maldivian Rufiyaa |
| PFM | Public financial management |
| PPPs | Public-private partnerships |
| PSIP | Public Sector Investment Program |
| SAP | Strategic action plan |
| SARTTAC | South Asia Regional Training and Technical Assistance Center |
| SDF | Sovereign development fund |
| SOE | State-owned enterprise |
| USAID | United States Agency for International Development |
Preface
In response to a request from the Ministry of Finance (MOF) of Maldives, a capacity development mission from the Fiscal Affairs Department (FAD) was conducted remotely during the period of November 1–November 30, 2020, to assist authorities in revising the 2013 Fiscal Responsibility Act (FRA). The mission was led by Ms. Ozlem Aydin (FAD Economist) and comprised Ms. Laura Doherty (FAD Senior Economist), Mr. Nabil Hamliri (FAD Technical Assistance Advisor), and Mr. Ian Lienert and Mr. José Miguel Ramos Carrasco (both FAD experts). During the mission, the authorities requested the mission not to limit its scope to reviewing the 2013 FRA and proposals for amending the law but also to prepare a new FRA draft. The mission agreed to provide drafting suggestions for a new FRA, consistent with the recommendations of this report.
The mission held the wrap-up meeting on key findings and recommendations with Hon. Ibrahim Ameer, Minister of Finance; Mr. Ismail Ali Manik, State Minister of Finance; and the heads of key departments in the MOF. The mission started with an introductory meeting with the State Minister and a kick-off meeting with the Counterpart Group comprising senior officials of the MOF. The mission presented and discussed the preliminary findings and recommendations with the Counterpart Group.
At the MOF, the team met with Ms. Fathimath Razeena, Financial Controller; Mr. Ahmed Saruvash Adam, Head of Fiscal Affairs Department; Mr. Ashraf Rasheed, Senior Legal Counsel; Ms. Hawwa Safna, Head of Treasury and Public Accounts Department; Ms. Maryam Abdul Nasir, Head of Resource Mobilization & Debt Management Department; and Mr. Mohamed Zaeem, Internal Auditor. In addition to meetings with MOF departments, the mission also met with Hon. Mohammed Nasheed, speaker of the Majlis; Hon. Mohamed Nashiz, Chair of the Majlis Public Accounts Committee and their members; Ms. Nuha Mohamed Riza, Under Secretary; the President’s Office; and the staff of the Auditor General’s Office and of the Maldives Monetary Authority.
The mission would like to thank the Maldivian authorities for their cooperation during the course of the mission. The mission is especially grateful to State Minister Ismail Ali Manik for his overall guidance and to Ms. Maryam Shawadhin Abdulla and Mr. Ali Abdul Raheem for their excellent organization of meetings and support throughout the mission.
Executive Summary
The Fiscal Responsibility Act (FRA) came into effect in 2013 to reduce rising public debt and achieve fiscal stability. Maldives has experienced rapid public debt accumulation over the past decade. The FRA establishes objectives for maintaining debt at a sustainable level and reducing the overall fiscal balance. The Act also sets minimum standards for fiscal transparency and accountability and requires the Government to prepare and publish medium-term fiscal and debt strategy reports.
The government has not met the FRA’s numerical targets for fiscal deficits and public debt. The authorities intended to set debt on a downward and sustainable path, which is stipulated as 60 percent of GDP in the FRA. Maldives, however, continues to face large and growing public debt; total public and publicly guaranteed debt increased from 52 percent of GDP in 2009 to approximately 77 percent of GDP in 2019 (see IMF 2020a). The establishment of three numerical fiscal targets in the FRA (debt-to-GDP, budget balance, primary balance) with a three-year timeframe to achieve them proved to be overly ambitious. The debt limit has been breached since 2016, and the fiscal deficit limits were never respected (with the exception of the overall deficit limit in 2017). The Act’s fiscal rules were breached without consequences.
Noncompliance was due to a poorly designed framework and insufficient government commitment to attaining the FRA’s targets. Design weaknesses include unrealistic and multiple fiscal targets, unclear coverage of fiscal aggregates, and inadequate accountability provisions. The effectiveness of the FRA was limited by the lack of enforcement mechanisms and inadequate reporting on compliance or noncompliance with the fiscal rules. The FRA includes an escape clause that can be activated when specific events occur, with the consent of Parliament and for a period determined by the Parliament. However, the FRA failed to provide clear definitions of the trigger events, and it did not require the Minister of Finance to report on the steps being taken to return to compliance with the fiscal rules when there were deviations from fiscal targets. Also, the FRA did not require a Final Budget Outcome Report, in which the Minister would explain annual fiscal outturns.
To ensure fiscal sustainability and enhance transparency, the Maldivian authorities are committed to introducing a new FRA in 2021. The Government needs firm and credible targets for debt and fiscal deficits in its debt-reduction efforts; however, past experiences of noncompliance with the numerical fiscal rules has undermined “its” credibility. The impact of the COVID-19 pandemic has made the FRA’s targets even more unrealistic and unachievable. The ongoing high uncertainty with the pandemic and with the near and medium-term economic and macro-fiscal outlook calls for flexibility in the medium-term trajectory of key fiscal aggregates.
A “Principles-Based” Framework
A principles-based approach, accompanied by strong accountability requirements, would provide the authorities with the flexibility to respond to adverse macroeconomic developments. This report recommends that the new FRA does not include numerical fiscal rules. Rather, it requires that the Government specifies fiscal principles in the Act and sets quantified key fiscal objectives (“targets”) relating to public debt, the fiscal balance, and fiscal risks in fiscal documents. The medium- to long-term fiscal targets should be consistent with the fiscal principles specified in the FRA and should be included in Government documents that outline its multiannual fiscal strategy. These documents could be updated by the Government without amending the FRA.
A new intermediate Government fiscal document, a Charter of Fiscal Responsibility, could be produced to quantify key fiscal targets. The Charter would be prepared by each incoming Government. It would lay out the Government’s key fiscal targets, consistent with the new FRA’s principles of responsible fiscal management (for example, the achievement and maintenance of public debt at a sustainable level). The Charter would only specify key medium-term fiscal targets for public debt, the budget balance, and Government guarantees, notably, those pertaining to the fifth year of an incoming Government’s five-year term. A rolling three-year, medium-term Fiscal Strategy Report would be updated annually and would provide details of fiscal developments and compliance with the Government’s five-year targets.
Although the principles-based approach to fiscal management would provide more flexibility than the 2013 FRA, it is very important to continue to quantify and monitor the medium- and long-term fiscal and debt objectives. The difference from the “rules-based” approach is that numerical fiscal rules are not included in a law but rather in government documents that are endorsed by Parliament.
It is outside the mandate of this report to suggest a path for reducing public debt and fiscal deficits. This report lays out a framework for a new legal framework to underpin future strategic fiscal policymaking. Specific fiscal targets—for example, “to reduce public debt to x percent of GDP and the fiscal deficit to y percent of GDP by 2026”—would be built on an analysis of medium- to longer-term macroeconomic fiscal and debt developments, and decisions by the Government on fiscal policies that achieve a feasible fiscal deficit reduction path.
The steps of a principles-based framework include the following:
Identifying in the FRA the various fiscal responsibility principles and a limited number of unquantified fiscal objectives, such as achievement and maintenance of public debt at a sustainable level, with low risks; the maintenance of the overall fiscal balance at a prudent level over the medium term; and the prudent management of fiscal risks.
Formulating a Charter, including quantified medium-term fiscal objectives over a five-year period. A credible Debt Sustainability Analysis, covering 10 or more years, would assist in deciding the values of the debt, fiscal deficit, and Government guarantee anchors in the Charter and any updates of it.
Enhancing the annual Fiscal Strategy Report by operationalizing the medium-term fiscal objectives, quantified operational targets, and fiscal and debt projections for three years, consistent with the five-year fiscal anchors in the Charter.
Ensuring that the annual budget is consistent with the Charter’s fiscal anchors and the Fiscal Strategy Report’s targets.
Requiring the Minister of Finance to explain any departures from fiscal responsibility principles and quantified fiscal objectives (anchors/targets).
Accountability
The flexible principles-based approach requires strong accountability provisions in the new FRA. Under the “comply or explain” approach, the Minister would be accountable for ensuring that the contents and explanations provided in fiscal reports meet the Act’s requirements. The Minister would explain, to Parliament or its committees, all of the updates to the Charter and any deviations from the Government’s stated fiscal objectives and key fiscal targets. The Minister’s written report would explain the reasons for any changes in the key fiscal targets or any temporary suspension of them when escape clauses are invoked, in conjunction with the planned corrective actions and a timeline to return to the targets. The FRA would also require the Minister to appear before a parliamentary committee to explain the contents of a Final Budget Outcome document, particularly why annual budget outcomes differ from initial budget projections.
Fiscal Transparency
The new FRA could enhance transparency by requiring the Government to present to Parliament various ex-ante and ex-post reports and publish them on the MOF website:
The FRA’s Fiscal Strategy Report, which now includes a medium-term debt strategy, could be improved by including multi-year fiscal and debt targets, consistent with the objectives in the Charter. The Fiscal Strategy Report would, in turn, be used to guide the annual budget preparation and to facilitate public scrutiny and accountability. The new FRA could set out the minimum contents for the Fiscal Strategy Report and require its submission to Parliament by the end of June, with an update in October with the annual budget documentation.
A Fiscal Risks Statement and a Statement of Tax Expenditures would be prepared and submitted to Parliament in October with budget documentation.
The new FRA could require publishing/updating annually a Debt Sustainability Analysis (DSA) as a part of the Fiscal Strategy Report, which would guide the three-year objectives under the Fiscal Strategy Report, consistent with the fifth-year targets for public debt and the fiscal deficit that are specified in the Charter. The DSA would be also updated every time the targets in the Charter are revised and/or the Fiscal Strategy Report is updated.
A Final Budget Outcome (inclusive of annual financial statements) would be the main ex-post accountability document. It would explain any deviations through the budget year from the submitted budget and Fiscal Strategy Report
Fiscal Oversight
The new FRA would clearly define the specific roles of Parliament and the Auditor General in the fiscal responsibility framework. This report suggests enhancing fiscal oversight by strengthening the role of Parliament and the Auditor General. The new FRA would require the Auditor General to audit whether the Minister of Finance has complied with the FRA’s specific accountability requirements. The Peoples’ Majlis (particularly the Public Accounts Committee) would monitor compliance with the proposed Charter and Fiscal Strategy Report. The new FRA would also require the Minister of Finance to report annually to Parliament on the actions by the Government to implement the budget-related recommendations of parliamentary committees and the Auditor General. To provide effective external audit and legislative oversight, this report advocates enhancing the technical and staffing capacity of the MOF, the Auditor General’s Office, and relevant parliamentary committees.
The credibility of the proposed new framework requires the political commitment to implement it and to meet the fiscal objectives established by the Charter and the Fiscal Strategy Report. Although the design elements provided by the proposed new FRA are important factors for the success of the new fiscal rules framework, their implementation is ultimately linked to the authorities’ ambitions to improve fiscal outcomes, especially the political will to establish responsible fiscal management and to strengthen other aspects of the public financial management (PFM) system to support the implementation of the new FRA.
Coherency In PFM Legal Reform Agenda And Transitional Issues
A clear and consistent PFM legal framework is a prerequisite for a credible fiscal responsibility framework. This report suggests improvements in the FRA. At the request of the authorities, a first draft of a new FRA (Appendix 1) is provided to guide the authorities in adopting this report’s policy recommendations in the legislative drafting process. However, the authorities should continue to work on the proposed draft provided by this mission, in particular, by carefully integrating the new FRA into existing PFM laws and the ongoing PFM legal reform agenda. The report also identifies several areas of PFM that should be addressed in other PFM laws for the successful implementation of the new FRA. Given the uncertain macro-fiscal circumstances and possible capacity constraints for preparing some of the new documents proposed in this report, the new FRA would also include transitional provisions to delay the implementation of some of its provisions.
Key Recommendations
| Recommendations for the design of the new FRA |
| • Ensure that all terms used in the new FRA are defined clearly in a single Article, especially by clarifying the institutional coverage of the various fiscal aggregates mentioned in the FRA. |
| • Clarify in the new FRA public debt to be the gross debt of the Central Government and all Central Government guarantees, that is, all guarantees to local councils, state-owned enterprises (SOEs), and private entities. |
| • Limit the coverage of the Government’s fiscal strategy documents and ex-post budget reports to Central Government entities, that is, exclude local councils’ own revenues, expenditures, fiscal balances, and nonguaranteed debt from fiscal aggregates. |
| • Adopt a principles-based FRA that articulates fiscal responsibility principles to guide the government’s fiscal policy. |
| • Include the fiscal responsibility principles and unquantified key fiscal objectives in the FRA. Instead of including fiscal rules in the FRA, develop a principles-based fiscal responsibility Charter that includes quantified fiscal objectives, and enhance the Fiscal Strategy Report to incorporate numerical fiscal targets to operationalize objectives. |
| • Introduce in the new FRA a requirement for the Minister of Finance of an incoming Government to present to Parliament a Charter that specifies the numerical values for key fiscal objectives (“targets”) consistent with the fiscal responsibility principles in the FRA, notably, the debt-to-GDP target for achieving fiscal sustainability, based on a comprehensive DSA. Parliament would approve the Charter by Resolution. |
| • Consider quantifying three key fiscal objectives—a total public debt objective as an “anchor,” an overall fiscal deficit objective, and a debt guarantee limit—in the Charter for the fifth year of the government’s term, which would be converted into year-by-year operational targets in the Fiscal Strategy Report (for three years). |
| • Include provisions in the new FRA that do the following: (1) require a compulsory review of the Charter after two years that may or may not lead to a modification of the fiscal targets; and (2) allow temporary departures from the principles of fiscal responsibility for specific events enumerated in the FRA’s escape clauses. |
| • Require the Minister of Finance, when modifying the Charter, to explain to Parliament the reasons for deviating from previous fiscal targets, the approaches that the Government intends to take, and the time period to return to the FRA’s principles of fiscal responsibility. |
| • Use a DSA to determine the feasible and realistic values of the key fiscal objectives for the five years beyond the present fiscal year. |
| • Require the Minister of Finance to table a Fiscal Strategy Report before Parliament by end-June, with the Peoples’ Majlis approving it by Resolution, thereby gaining buy-in. |
| • Update the Fiscal Strategy Report with recent economic and fiscal developments and any new policy changes and resubmit it to Parliament in October as part of the annual budget documentation. |
| • Specify the minimum contents for the Fiscal Strategy Report in a schedule to the FRA. |
| • Require the following in the FRA: (1) a fiscal risk statement, (2) an annual statement on tax expenditures, and (3) a DSA. The first two documents would be submitted to Parliament with the annual budget by end-October. The last two documents could be prepared once the capacity is available in the MOF. |
| • Include in the FRA a requirement for a Final Budget Outcome to accompany the submission of the annual financial statements to Parliament before end-June, consistent with the Public Finance Act. |
| • Include a requirement in the FRA that the Minister appear before a parliamentary committee to explain the following: (1) the contents of the Final Budget Outcome document, (2) the reasons for deviations from the revenues and expenditures approved in the annual budget, and (3) whether annual fiscal and debt outcomes will result in departures from the fiscal targets in the Charter and operational targets in the Fiscal Strategy Report. |
| • Include in the FRA a requirement to publish key fiscal reports (mentioned in this report) once they are approved by the Cabinet of Ministers at the time of the submission of the documents to Parliament. |
| • Require in the FRA the Peoples’ Majlis to discuss the Government’s Charter and Fiscal Strategy report and approve them by Resolution. |
| • Enhance the analytical, technical, and staffing capacity of the MOF, the Auditor General’s Office (AGO), and Parliamentary Committees to enable them to assess the government’s medium-term fiscal strategy and annual budget outcomes. |
| • Include in the FRA a requirement for the Auditor General’s Office to audit whether the Minister of Finance has complied with the FRA’s specific accountability requirements. |
| • Require in the FRA that the Minister of Finance report annually to Parliament on the actions taken by the Government to implement the budget-related recommendations of the parliamentary committees and the Auditor General. |
| • Decide which provisions of the draft FRA need to be delayed, given the present uncertain macro-fiscal circumstances and the capacity constraints in the MOF, the AGO, and Parliament. |
| Recommendations for the design of the new FRA |
| • Ensure that all terms used in the new FRA are defined clearly in a single Article, especially by clarifying the institutional coverage of the various fiscal aggregates mentioned in the FRA. |
| • Clarify in the new FRA public debt to be the gross debt of the Central Government and all Central Government guarantees, that is, all guarantees to local councils, state-owned enterprises (SOEs), and private entities. |
| • Limit the coverage of the Government’s fiscal strategy documents and ex-post budget reports to Central Government entities, that is, exclude local councils’ own revenues, expenditures, fiscal balances, and nonguaranteed debt from fiscal aggregates. |
| • Adopt a principles-based FRA that articulates fiscal responsibility principles to guide the government’s fiscal policy. |
| • Include the fiscal responsibility principles and unquantified key fiscal objectives in the FRA. Instead of including fiscal rules in the FRA, develop a principles-based fiscal responsibility Charter that includes quantified fiscal objectives, and enhance the Fiscal Strategy Report to incorporate numerical fiscal targets to operationalize objectives. |
| • Introduce in the new FRA a requirement for the Minister of Finance of an incoming Government to present to Parliament a Charter that specifies the numerical values for key fiscal objectives (“targets”) consistent with the fiscal responsibility principles in the FRA, notably, the debt-to-GDP target for achieving fiscal sustainability, based on a comprehensive DSA. Parliament would approve the Charter by Resolution. |
| • Consider quantifying three key fiscal objectives—a total public debt objective as an “anchor,” an overall fiscal deficit objective, and a debt guarantee limit—in the Charter for the fifth year of the government’s term, which would be converted into year-by-year operational targets in the Fiscal Strategy Report (for three years). |
| • Include provisions in the new FRA that do the following: (1) require a compulsory review of the Charter after two years that may or may not lead to a modification of the fiscal targets; and (2) allow temporary departures from the principles of fiscal responsibility for specific events enumerated in the FRA’s escape clauses. |
| • Require the Minister of Finance, when modifying the Charter, to explain to Parliament the reasons for deviating from previous fiscal targets, the approaches that the Government intends to take, and the time period to return to the FRA’s principles of fiscal responsibility. |
| • Use a DSA to determine the feasible and realistic values of the key fiscal objectives for the five years beyond the present fiscal year. |
| • Require the Minister of Finance to table a Fiscal Strategy Report before Parliament by end-June, with the Peoples’ Majlis approving it by Resolution, thereby gaining buy-in. |
| • Update the Fiscal Strategy Report with recent economic and fiscal developments and any new policy changes and resubmit it to Parliament in October as part of the annual budget documentation. |
| • Specify the minimum contents for the Fiscal Strategy Report in a schedule to the FRA. |
| • Require the following in the FRA: (1) a fiscal risk statement, (2) an annual statement on tax expenditures, and (3) a DSA. The first two documents would be submitted to Parliament with the annual budget by end-October. The last two documents could be prepared once the capacity is available in the MOF. |
| • Include in the FRA a requirement for a Final Budget Outcome to accompany the submission of the annual financial statements to Parliament before end-June, consistent with the Public Finance Act. |
| • Include a requirement in the FRA that the Minister appear before a parliamentary committee to explain the following: (1) the contents of the Final Budget Outcome document, (2) the reasons for deviations from the revenues and expenditures approved in the annual budget, and (3) whether annual fiscal and debt outcomes will result in departures from the fiscal targets in the Charter and operational targets in the Fiscal Strategy Report. |
| • Include in the FRA a requirement to publish key fiscal reports (mentioned in this report) once they are approved by the Cabinet of Ministers at the time of the submission of the documents to Parliament. |
| • Require in the FRA the Peoples’ Majlis to discuss the Government’s Charter and Fiscal Strategy report and approve them by Resolution. |
| • Enhance the analytical, technical, and staffing capacity of the MOF, the Auditor General’s Office (AGO), and Parliamentary Committees to enable them to assess the government’s medium-term fiscal strategy and annual budget outcomes. |
| • Include in the FRA a requirement for the Auditor General’s Office to audit whether the Minister of Finance has complied with the FRA’s specific accountability requirements. |
| • Require in the FRA that the Minister of Finance report annually to Parliament on the actions taken by the Government to implement the budget-related recommendations of the parliamentary committees and the Auditor General. |
| • Decide which provisions of the draft FRA need to be delayed, given the present uncertain macro-fiscal circumstances and the capacity constraints in the MOF, the AGO, and Parliament. |
| Other Recommendations |
| • Ensure consistency in the PFM legal reform agenda and consider the merits of adopting the FRA and the Public Debt Act in the same parliamentary session in 2021. |
| • Consider the areas where changes are needed in the Public Finance Act and Financial Regulations and make appropriate draft amendment proposals for Parliament’s consideration. |
| • Remove all cash flow planning provisions (chapter 8) from the 2013 FRA and transfer the relevant provisions to the Public Finance Act or the financial regulations. |
| • Consider transferring Article 32(a) of the 2013 FRA—restrictions on advances to the government from the Maldives Monetary Authority (MMA)—to the Public Finance Act. |
| Other Recommendations |
| • Ensure consistency in the PFM legal reform agenda and consider the merits of adopting the FRA and the Public Debt Act in the same parliamentary session in 2021. |
| • Consider the areas where changes are needed in the Public Finance Act and Financial Regulations and make appropriate draft amendment proposals for Parliament’s consideration. |
| • Remove all cash flow planning provisions (chapter 8) from the 2013 FRA and transfer the relevant provisions to the Public Finance Act or the financial regulations. |
| • Consider transferring Article 32(a) of the 2013 FRA—restrictions on advances to the government from the Maldives Monetary Authority (MMA)—to the Public Finance Act. |
