The Tautua Samoa Party’s Shadow Minister of Finance, Afualo Dr. Wood Salele, has cautioned that the country’s financial state is no longer safe under the guidance of the current government.
He was particularly critical of the Chief Executive Officer of the Ministry of Finance, Tupaimatuna Iulai Lavea, whom he has asked to step down.
The Salega Member of Parliament said that it is under Tupaimatuna’s leadership at the Ministry of Finance that Samoa’s foreign debt has ballooned to more than a billion tala.
Afualo issued the warning in response to Tupaimatuna’s claim that there is no shortfall in the Supplementary Appropriation (No1) 2015.
The C.E.O. made the point in a press release issued last year. He said the $447, 000 shortfall insinuated in a statement by Afualo was slanderous and without the loans, development would not be where it is now.
But Afualo dismissed this saying Lavea’s comments are misleading.
The M.P. for Salega has also invited the Financial Secretary to resign as it was during his term that the country’s foreign debt climbed to a billion.
“They’re misleading the country; they’re hiding behind the G.D.P,” said Afualo.
“You pay back your loans with your income, not G.D.P. as they claim. The Financial Secretary came with a budget that is $500 million but the money wasn’t there and they used the overseas grant to cover up for it where they shouldn’t have.”
Asked for a comment, Lavea declined.
Instead, the C.E.O. said Afualo has turned the issue into a political spiral.
Meanwhile, Afualo pointed out although this is the practice that is done by other countries using overseas loans to pay for other debts, it’s not the right thing to do.
He added those nations are now facing financial problems where their assets are being pulled in to the equation.
“We love our country and we don’t want our assets and lands to end up like that. If this is the thinking that they are using to deal with our finances; our country is no longer safe…He (Lavea) should resign because it was under his watch that our debt has reached the billion mark.”
At the moment, the current G.D.P. level is $1.9.billion tala, Samoa’s debt service ratio is 4.4%. Lavea had argued that this means for every tala of G.D.P. only 4sene is used to pay for the current debt. He said it was extremely low and it demonstrates that Samoa is in a strong position to service its debt.
But Afualo disagrees.
The economist said the right method used by banks is the debt service ratio over income.
“You don’t use your asset which in this case is the G.D.P,” said Afualo.
“If this is how they are blindfolding the country, they should all just resign.”
Opposition Leader, Palusalue Fa’apo II was in support. He said the only reason why the ratio stays at 4sene is because anything more than that is unaffordable for government.