Sili urges caution in Govt. funding source
The Government of Samoa needs to be more diligent on where it gets its funding from, says Minister for Finance Sili Epa Tuioti.
“We have to deal with what we have already, but I think going forward we need to be a lot more diligent where we go for funding,” he said, when asked about Samoa’s debt level and China being its biggest creditor.
Samoa to date owes China $416 million, which is more than what it owes to the Asian Development Bank, the World Bank and Japan, according to statistics released by the Samoa Bureau of Statistics Financial Statistics for the December 2017 quarter.
“There’s obviously a lot of interest in the Pacific now from everyone, so it’s really sort of knowing and making sure what we really want, what our development priorities are, and where are the best sort of avenues where we can access funding,” Sili said.
“We are a sovereign nation, we make decisions based on our own due diligence of our assessment on what our development priorities are, what our people need going forward.
“I am also an advocate on not focusing on our immediate future, we need to take a longer term perspective, where we want to be as a nation, as a people and then sort of work back and look at where we are now, do we need to change things, and if we need to make changes to get us to where we want to be as a nation to meet the social and economic needs of our people, then I think we need to do that.”
Sili said there are multiple funding opportunities, but it’s really looking at how Samoa can get the best out of the funding and China is an option like every other donor country.
“It is really having discussions with them on what terms and what conditions, and for us to ensure we can afford whatever we borrow and whoever we borrow from whether it’s China or any other country that’s prepared to help us.
“But our preferences is sort of grant aid, and obviously borrowings from the ADB and the World Bank, those have always been our multilateral banks because of the very low interest rates and grace periods for us to pay back. So we’ll take whatever funding they can give us.
“As long as we are confident that we can manage our external debt, I am quite happy to look at opportunities where we can go out and seek funding. Preferably concessional loans, grant aid.”
Sili said the Government is also pushing the ADB and World Bank to increase their allocation to Samoa.
“Allocation for Samoa is really based on performance, and we have a strong and very good relationship with them, I would like to also continue that.
“And also if the World Bank and ADB cannot provide loans to us on certain things, then we will have to look at whoever is there to be able to do it, and if it’s China then yes of course, we will sit down and negotiate, and understand.”
He is confident that loan repayments are on track and reiterated that the country’s debt level is manageable.
“We cannot totally depend on our bilateral sources. Our friends Australia, New Zealand and Japan they support, they give grants to almost every other country in the world, so we appreciate what they are doing for us, we understand there’s a limit as to how much they can support us, and that’s why we always have to look at sources of where we can borrow.
“But we have to make sure that the projects we borrow from will directly contribute to achieving our social and economic development and I think we are able to do that.
“We look at the revenues we raise domestically, how much of that is spent and again we are quite happy with what we are spending on revenue.”