Fayyaz questions government’s claim that USD 500m sukuk is fully arranged

Former Economic Minister Fayyaz Ismail has said he does not see any feasible way for the government to pay the USD 500 million sukuk maturing in April.

Speaking on SSTV’s Baaru Hathareh programme, Fayyaz, who served as MDP chair until November, said the opposition wants the government to fulfil its promises, but he does not believe those pledges can be met within the next five years.

He criticised the Finance Ministry and the Maldives Monetary Authority (MMA) for not disclosing updated fiscal information, and questioned the government’s repeated assurances that the sukuk payment is fully arranged.

Fayyaz said the President’s February 2 press conference, where he stated that the sukuk would be paid on time, amounted to “an additional statement” without supporting evidence.

“I don’t think there is a way to pay the sukuk. They may take it from national reserves somehow and pay it, but there are no signs of the funds being retrieved afterwards,” he said.

He added that the government is not refinancing any loans, despite earlier claims.

Fayyaz also noted that even if the Middle East conflict ended immediately, its economic impact on the Maldives would continue for months. He argued that the country’s economic, social and constitutional systems are already “15 to 20 years behind.”

In his presidential address, President Dr. Mohamed Muizzu said that after paying part of the sukuk, the interest rate on the remaining portion would not exceed nine percent. He said more than USD 275 million had already been deposited into the Sovereign Development Fund (SDF).

The President later told reporters that the government has decided to pay the sukuk on April 8, and that USD 650 million has been secured, enough to settle the bond and leave a balance.

He said the SDF currently holds over USD 320 million, while usable reserves stand at USD 330 million.

The government has previously said it is working to refinance part of the sukuk, but international credit rating agencies Fitch and Moody’s have downgraded the Maldives to junk status, making it difficult to raise affordable debt.

The Maldives faces USD 1.1 billion in debt repayments this year. International financial institutions have been urging spending cuts and fiscal reforms since 2021, but such measures have not been implemented. The government maintains that all obligations will be met on time.