Council Funding Hits Record $41 Million With New Allocation Formula Planned

Official statistics show Maldivian councils have received USD 41.1 million in block grants so far this year, an 18 percent increase compared to the same period in 2023. The Ministry of Finance and Planning’s Weekly Fiscal Development Report indicates this year's total allocation for council grants is USD 162.1 million, the highest ever. This exceeds the USD 142.7 million budgeted for 2024 and the USD 136.2 million budgeted in 2023, which was ultimately overspent by over half a million dollars. Under the current fiscal formula, which has been in place since 2022, grants are distributed based on state revenue. City councils receive the largest share of funding, with the Male’ City Council allocated the highest amount. The government has announced plans to reform the council funding system. Proposed changes include abolishing atoll councils and increasing the funding shares for island and city councils. Future allocation rules will shift from being solely population-based to also consider land size. Officials state this change aims to strengthen the financial capacity of councils and better support local development projects across the Maldives.