MFR Summaries: Budget Expenditures 2022

Minister of Finance, Ibrahim Ameer, presented the national budget for 2022 to parliament last week, with expenditure estimated at  MVR36.925 billion. The projected revenue and grants for the year is MVR24.280 billion, leaving 34 percent of the budget (MVR 12.55 billion) to be financed through loans. 

After deducting the debt service from the total budget, the actual total expenditure for 2022 is projected at MVR34.028 billion, out of which MVR24.816 billion (67 percent) is recurrent expenditure, MVR6.273 (17 percent) is PSIP, and MVR5.536 (16 percent) is other capital expenditures. A total of MVR9.760 or 26 percent of total expenditure, is to be spent on government employees, and 12 percent on operational expenditure of government offices. 

Health Sector

The total allocated for health sector in 2022 is MVR4.640 billion, out of which MVR3.979 million will be recurrent expenses, and MVR662 million on capital. An estimated MVR448 million is to be spent on building new hospitals or health centres, or on expanding capacity at existing health facilities. MVR323 million is also allocated for COVID-19 related recurrent expenses. An allocation of MVR60 million for establishing tertiary hospitals in four islands, and MVR53 million for a cancer hospital in Laamu Atoll are also included in the budget. 

Social Protection

Maldives Government will be spending MVR3.060 billion in 2020 on social protection, including MVR731 million on ‘Aasandha’ -  the national health insurance scheme. Disability allowance total of MVR278 million, and single-parent allowance MVR68 million, and MVR105 million on other health-related assistance. 

Economic Affairs

The Budget 2022 includes over MVR8 billion on economic affairs, including MVR5.260 billion as capital investments. Major capital expenditures include; MVR633 million on Greater Male’ Connectivity Bridge between Malé and Thilafushi, MVR561 million on Velana Airport terminal project, MVR340 million on renewable energy projects, and MVR234 million on Addu City development project. 

Under this segment, MVR540 million is budgeted for electricity subsidy, MVR284 million on food subsidy, MVR254 million on transport subsidy, and MVR154 million on tourism promotions. 

Housing and Community Amenities

MVR661 has been allocated for housing projects, and MVR1.6 billion on community development projects, mainly allocated to island councils. Almost MVR150 million is also allocated for various water supply projects. 

Education

The budget for 2022 has a total allocation of MVR4.067 billion on the education sector, including a MVR949 million for tertiary education. The national student loan scheme has MVR240 million, and MVR159 million allocated for the government’s degree program. Other notable expenses include the school breakfast program with MVR135 million, and MVR208 million on scholarships and trainings. 

Defence, Public Order and Safety

The total budget allocation for defence for 2022 is MVR1.6 billion, which is almost same as the allocation in 2021. The amount budgeted for police services is MVR1.9 billion, while prisons are allocated MVR366 million. 

General Public Services

The Budget 2022 allocation of MVR7.5 billion for general public services includes MVR1.6 billion on executive and legislative organs, financial and fiscal affairs, and external affairs, and MVR134 million under general services. 

A total of MVR5.777 billion is allocated for debt services and debt amortization. Of this, MVR2.862 billion is allocated for debt repayments and MVR2.915 billion is allocated for interest payment and debt servicing.

Budget Deficit and Financing

The 2022 budget has a total deficit of MVR9.748 billion (USD 632 million). In addition to the financing requirement for 2022 budget deficit, the government will also need to obtain additional financing for its debt repayment obligations, bringing the total financing requirement to MVR 3.4 billion (USD 870 million). 

Out of the financing required, the Ministry of Finance proposes MVR7.511 billion to be obtained from external sources, while MVR5.903 planned to be obtained from domestic sources. A USD200 million sukuk and an additional USD50 as budget support loan are included as options for external financing.