President Dr Mohamed Muizzu has ratified the 16th Amendment to the Decentralisation Act (Act No. 7/2010), ushering in sweeping reforms aimed at ensuring councils serve communities with transparency, fairness, and accountability. The bill, passed by Parliament on 6 August 2025, is now published in the Government Gazette and has come into immediate effect.
The newly enacted changes set clear boundaries for business activities conducted by Local Authority Companies, ensuring they complement rather than compete with small local enterprises. Any council-run businesses found in violation of the law must cease operations within 90 days. This measure is designed to safeguard grassroots economic opportunities and prevent misuse of council-owned companies.
In a decisive move to protect essential public services, the amendment prohibits councils from charging rent for land or buildings allocated for utilities such as water, electricity, and sewerage. This ensures that vital services remain affordable and accessible to the public without unnecessary financial burdens.
The law also introduces stricter financial oversight in the final year of a council’s term. During this period, appointments of staff, leasing of land or lagoons, allocation of reef areas, and the launch of development projects outside the council’s approved plan will require prior authorisation from the Ministry of Finance and the Local Government Authority. This provision is aimed at preventing last-minute, politically motivated decisions that could strain public finances.
President Muizzu described the reform package as “a critical step forward in strengthening the nation’s decentralised governance system,” emphasising that the changes align with his administration’s commitment to good governance and financial discipline.
“These amendments are about protecting the people’s interests, ensuring councils operate within the law, and guaranteeing that public resources are used responsibly” the President said.
By tightening oversight, reinforcing transparency, and prioritising essential services, the 16th Amendment marks a major shift towards a more accountable and community-focused local governance structure in the Maldives.
