Finance Minister: MVR 2.5B saved from cost reduction steps

Finance Minister Dr. Mohamed Shafeeg states MVR 2.5 billion has been saved so far this year as a result of the steps implemented by the government to reduce cost.

Speaking at a meeting of the Parliament’s Public Accounts Committee on Wednesday, Minister Shafeeg said the results envisioned with the fiscal reforms and cost reduction steps implemented by the government have now begun emerging.

He emphasized the need to implement additional fiscal reforms in order to undertake the projects wanted by the government despite saving MVR 2.5 billion with the reforms and steps that have already been implemented. He noted that some sectors of the government were producing a significant amount of financial waste and in this trajectory, underscored the need to reform the management of state-owned companies.

While an MVR 49.8 billion budget has been passed for the prevailing year, Minister Shafeeg says significant difficulties will come into play in the future if reforms are not implemented. He said the government had initially planned to implement reforms by mid-year as the government is already facing difficulties in financing the budget.

“However, we had work by implementing reforms from day one; the result of which we are now seeing,” he added.

He detailed that MVR 17 million had been saved per month, to date, as a result of these reforms.

The Minister revealed that the government has begun implementing reforms in the health sector which could save a significant amount of money.

Referring to President Dr. Mohamed Muizzu’s decision to implement a policy focused on cost reduction, revenue growth, and a medium-term revenue strategy during Sunday’s cabinet meeting, Minister Shafeeg said efforts are presently underway to formulate a timeline for the implementation of the agenda.

“Implementing this reform is no longer an option for us, but rather, something necessary,” he stressed.

Henceforth, he appealed for the cooperation of parliamentarians in this endeavor.

Finance Ministry had earlier warned that the budget deficit listed at MVR 14 billion initially in this year’s budget will climb up to MVR 20 billion if expenses are continued without fiscal reforms.

They had announced significant steps to reduce costs in February in light of this, which targeted to reduce expenditure through seven main aspects; promotions to staff, official trips, introduction of new allowances and similar aspects in this trajectory.

Parliament began inquiring about the exact details of state finances after alarms were raised by Deputy Speaker Ahmed Nazim.

Initially, Minister Shafeeg had been summoned to a meeting of the Public Accounts Committee on Monday for the purpose. However, he had been unable to attend that day due to poor health.