The Government of Maldives has proposed USD 175.1 million in block grants for local councils under the 2027 State Budget, representing an 8 per cent increase from the USD 162.1 million allocated for councils this year and reinforcing the administration’s focus on decentralised development and stronger local governance.
The allocation forms part of the USD 3.87 billion national budget submitted to Parliament for 2027. A total of USD 227 million has been earmarked for grants, of which USD 175.1 million is designated for local councils across the country.
Block grants have been distributed to councils through a fiscal formula since 2020, based partly on state revenue. Under the previous arrangement, island councils received 80 per cent of the allocation while city councils received the remaining 20 per cent. The Government has now revised the grant framework following the abolition of atoll councils, allowing a greater proportion of available funding to be directed towards island and city councils.
Under the proposed 2027 allocations, Malé City Council is set to receive the largest amount at USD 16.69 million. Addu City Council will receive USD 6.47 million, Fuvahmulah City Council USD 4.29 million, Kulhudhuffushi City Council USD 4.15 million, and Thinadhoo City Council USD 3.77 million.
Several island councils will also receive significant allocations. In the northern atolls, Dhiddhoo Council is allocated USD 1.80 million, Hanimaadhoo Council USD 2 million, Funadhoo Council USD 1.36 million and Kendhikulhudhoo Council USD 1.29 million. Dhuvaafaru Council is set to receive USD 1.76 million, Eydhafushi Council USD 1.52 million and Naifaru Council USD 2.36 million.
Across the central atolls, Maafushi Council has been allocated USD 1.82 million, Thoddoo Council USD 1.17 million and Maamigili Council USD 1.60 million. Keyodhoo Council will receive USD 506,000, Muli Council USD 882,000, Nilandhoo Council USD 1.27 million and Kudahuvadhoo Council USD 1.85 million.
In the southern regions, Guraidhoo Council will receive USD 934,000, while Gan Council has been allocated USD 2.80 million. Villingili Council is set to receive USD 1.55 million, Gaddhoo Council USD 1.05 million and Meedhoo Council USD 1.33 million.
The revised allocation formula is also expected to provide a more balanced approach to funding by taking island land area into consideration rather than determining allocations solely on population. The change is intended to better reflect the infrastructure, service delivery and development requirements of islands with differing geographical characteristics.
Alongside increased funding, the Government is strengthening oversight of grants issued under the Decentralisation Act, with greater emphasis on how councils manage public funds and translate allocations into tangible benefits for communities.
The Ministry of Finance and Public Enterprises reported that 31 councils had not properly maintained their financial accounts by the end of 2025. Authorities also identified cases where grants remained unused or where recurrent expenditure was prioritised over capital investments capable of delivering longer-term benefits to residents.
The Government is therefore working to strengthen financial accountability, improve monitoring mechanisms and encourage councils to make more effective and responsible use of public resources. The approach is expected to support stronger local development while reducing unnecessary fiscal risks to the national budget.
With higher allocations and a revised distribution framework, the 2027 budget positions local councils to play an expanded role in delivering infrastructure, public services and community development priorities across the Maldives.
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