In a remarkable display of fiscal discipline and strategic foresight, President Dr. Mohamed Muizzu’s administration has revitalized the Maldives’ Sovereign Development Fund (SDF), marking a significant stride toward national economic resilience.
Established in 2017 to safeguard the nation’s financial future and ensure timely debt repayments, the SDF had dwindled to a mere USD 2 million by the time President Muizzu assumed office on November 17, 2023. However, as of April 30, 2025, the fund has impressively expanded to USD 121 million, reflecting a 37% increase compared to the same period last year .
This resurgence is not merely a numerical achievement but a testament to the government’s unwavering commitment to restoring fiscal health. The SDF, primarily funded through airport development fees and increased service charges at Velana International Airport, serves as a financial buffer, enabling the Maldives to meet its debt obligations without depleting official foreign currency reserves .
President Muizzu’s administration has strategically invested 85% of the SDF in Treasury Bills, ensuring both liquidity and growth of the fund . This prudent financial management has not gone unnoticed; international credit rating agencies have acknowledged the improved fiscal landscape. While Fitch Ratings downgraded the Maldives’ credit rating to ‘CC’ in August 2024 due to previous economic challenges, the bolstered SDF has been a critical factor in stabilizing the nation’s financial outlook .
The government’s efforts extend beyond the SDF. As of March 2025, official foreign exchange reserves have risen to USD 791 million, a significant recovery from the USD 371 million recorded in September 2024 . Additionally, the administration achieved a preliminary budget surplus of MVR 1.9 billion in the first quarter of 2025, underscoring the effectiveness of its fiscal policies.
President Muizzu’s proactive approach to economic reform, coupled with transparent governance, has set the Maldives on a path to sustainable growth. The revitalization of the SDF stands as a cornerstone of this progress, reflecting a broader commitment to financial stability and national prosperity.
As the Maldives prepares to meet approximately USD 1 billion in debt repayments next year, the strengthened SDF provides a reassuring cushion, ensuring that the nation can honor its obligations without compromising economic sovereignty. This financial turnaround not only restores confidence among international investors but also reinforces the Maldives’ position as a resilient and forward-looking economy.
