Parliament approves $300 million loan following Amin Adam's intervention in $449 million tax waiver debate

Parliament has granted approval for a $300 million loan after interventions by Energy Minister Dr. Mohammed Amin Adam over a $449 million tax waiver.

The decision, which follows a series of deliberations and negotiations, underscores the intricate balance between economic development initiatives and fiscal responsibility.

The $300 million loan, intended to bolster various developmental projects across the country, received the green light from Parliament after extensive discussions on its implications and benefits for the nation's progress.

The tax waiver, initially proposed for a multinational company, had raised concerns among some MPs regarding its potential impact on government revenue and fiscal prudence. Dr. Amin Adam's intervention, backed by comprehensive explanations and assurances, helped assuage these concerns and garnered broader support for the loan approval.

The Finance Minister addressing the House said “Mr Speaker, let me take this opportunity to clarify a few issues. First of all, this is not an IMF facility, it is a World Bank facility. It is a concessional facility for 25 years. The payment period has a grace period of five years interest of about 1.25 percent and it has a grand element of 26%.”

“It is concessional and this house is familiar with that concessional facilities. Secondly, it is a budget support. This same house approved the financing for the 2024 budget, a total financing of 61 billion. And this is one of the facilities that we are pursuing to finance the 2024 budget. And therefore as we already know, the 2024 budget, through this house, allocated resources to different projects and programs for the year.

“I want to assure them [Minority] that I will take a look at these exemptions. I will rationalize it, I’ll review it and I’ll come back in two weeks to report to parliament and I hope that when I come Honorable Members will support me in whatever rationalization we are going to do,”

The $300 million loan is expected to fund critical infrastructure projects, stimulate economic activity, and create employment opportunities across various sectors.