Schools were not used as Ijarah to borrow money: Finance Ministry

Minister of Finance Ibrahim Ameer | Photo: Ministry of Finance

Male’, Maldives – Finance Ministry stated that the government has so far not taken any debt by using schools as Ijarah asset and that any statement saying otherwise is untrue.

Finance Ministry has stated that the incumbent government has no intention to mortgage schools or any other asset of the government nor does the government has any intention to sell bonds in such a way in the future.

Prior to the statement from the Finance Ministry, the Spokesperson of President’s Office, Mabrook Azeez cleared rumors, stating that the government is only using the schools as assets to sell bonds, noting that mortgaging and holding as assets are two different things. Mabrook state stated that even if the government is unable to pay back the loan completely, the schools will not be repossessed.

The schools held as assets to sell bonds for the government are Iskandhar School, Thaajuddin School, Giyaasuddin School, Imaadhuddin School, Kalaafaanu School, Rehendhi School, buildings used for EPS and MES along with CHS as well.

While Finance Minister of Maldives, Ibrahim Ameer stated that they will be selling additional bonds by the end of this year under the program to sell USD 1 billion worth of bonds, he added that the government will also receive an opportunity to issue bonds next year as well.

While the government earned a total of USD 300 million after selling bonds this April, using Dharumavantha Hospital as an asset, they are required to pay back the amount with interests, approximately USD 387 million after five years. Out of this, USD 191 million was spent on paying back the state’s debts.

Although Dharumavantha Hospital property was used as assets to issue bonds from the government, this is not done under the conventional guidelines. If the amount cannot be paid back, then as per the usual mortgaging guidelines, the property will not be sold to obtain money.