The U.S. Agency for International Development (USAID) works in partnership with the Government of Maldives (GoM) to improve public financial management (PFM) in order to ensure the transparent, effective, and efficient use of public resources. 

This activity strengthens government capacity to act on citizen priorities by mobilizing revenue and increasing the cost-effectiveness of investments in public facilities and services. The activity also supports efforts by the GoM to streamline PFM processes and learn from international best practices.

Implementing Partner: DAI Global, LLC; Total Estimated Cost: $13.7 million; Performance Period: February 2020 – February 2025

ACTIVITIES 

  • Increase transparency and accountability of the budget system: The PFM Maldives activity helped the GoM to introduce a performance-based budgeting (PBB) system to improve national budget allocations and management. 
  • Strengthen public investment management: The activity supported the GoM with technical assistance to assist planning, implementing, and monitoring of public investments according to economic and financial feasibility criteria, transparent and competitive procurements, and adoption of innovative measures to finance and oversee public investments. 
  • Support domestic resource mobilization: The activity also works to improve the resource mobilization capacity of the GoM and increase public revenue to finance public investments and services. 

RESULTS

  • Supported the Maldivian Ministry of Finance’s Fiscal Affairs Department to roll out Performance-Based Budgeting for its 2022 and subsequent budgets, and conducted workshops for more than 300 government officials on developing performance indicators for budget programs. This support contributed to enhanced transparency and accountability and provided expanded information for budget monitoring, analysis, and reporting. 
  • Worked with the Maldivian Ministry of Finance (MoF) to raise funding via capital markets and retire a $250 million Eurobond, thereby reducing the public debt-to-GDP ratio from 150 percent in 2020 to 108 percent in 2023. 
  • Supported the MoF to increase tax revenue from tourism from 12 percent to 16 percent.
  • Established a fully functional Debt Office in the MoF to strengthen coordination and institutional control and management of public and publicly guaranteed debt.
  • Prepared a performance audit manual for the Maldives’ Auditor General’s Office (AGO) to increase its oversight capacity for public accountability, good governance, and sound financial management.
  • Conducted a tax-and-gender assessment to evaluate gender bias in taxation in Maldives, a first-of-its-kind research in the island nation, providing data for a gender fiscal database and a framework for gender-sensitive approaches to tax analysis and fiscal policy.
  • Drafted the Environmental, Social, and Governance (ESG) framework, which serves as the foundation for GoM’s efforts to access global climate finance and provide assurance to potential investors about GoM’s plans and commitment to climate change action.