Govt. debt decreases, says Finance Ministry
Samoa’s debt has decreased to $1.09 billion from $1.11 billion since September 2018.
This is according to the Ministry of Finance quarterly debt bulletin for September, 2018 for the financial year 2017-2018.
“Total public debt as at end of September 2018 was SAT1.09 billion, equivalent to 49.4 per cent of GDP1 and that the total amount outstanding comprised of public external debt of $1.07 billion and public domestic debt of $0.02 billion. Total public debt decreased by 2.0 per cent when compared to June 2018,” stated the Ministry’s quarterly debt bulletin.
Prime Minister Tuilaepa Dr Sailele Malielegaoi reassured the Parliament last week that the Samoa Government is able to pay off its loans.
“The budget for this financial year is $862 million, and after deduction of our repayments leaves $733 million for the government’s operation, and our continued development projects."
“I am bringing this up, as there are still reports that Samoa has loaned beyond its means. As indicated before and again, the Government’s ability to loan is clearly due to the fact that they are able to make the repayments."
“We have the ability to pay. And as indicated before, paying off our loans is a priority,” he said.
According to the Budget for financial year 2018-2019, the Government’s receipts amounts to $626.3 million and loan repayments for this financial year is $86.4 million which is 13 per cent of what the Government collects in a year.
In October this year, Minister for Finance Sili Epa Tuioti assured the public that Samoa’s debt levels are manageable and there is nothing to worry about.
“As Minister of Finance, I can confidently say that Samoa can afford to pay off their loans,” he said.
To date the Government’s total debt stands at $1.09 billion with $416 million out of that total owed to China. This makes China the country’s biggest creditor with the debt higher than what Samoa currently owes the Asian Development Bank, the World Bank and Japan.
The debt figures were released by the Samoa Bureau of Statistics (S.B.S.) Financial Statistics for the December 2017 quarter and made public by the Central Bank of Samoa.
The Minister told this newspaper that funds are set aside by the Government annually to go towards debt servicing.
“Our budget every year we have set aside funds to pay on interest on all our loans with A.D.B., World Bank and China. “There is no reason why we should not be able to pay and for Samoa as well, we only borrow for the essential need, such as the economical social infrastructure that is going to help us for the social economic wellbeing of our people to try and drive our economy's growth,” he added.
The key question has always been one of affordability, but Sili put the issue to bed when he said the Government is monitoring its debts and making repayments.
“For me as Minister of Finance, where we are today, we are able to pay the debts. What about the next 20 years? It will be the same and it would be irresponsible for us to borrow beyond our means, certainly as Minister of Finance, we are keeping a close eye on the debt level.
“Were not going to borrow money for something we don’t need, we are also keen to make sure we borrow for what we need, not what we want,” he added.
Long-term planning is essential for Samoa's Government, which the Minister says is the reason why they have plans for the next 20-30 years.
“We consider what the future holds, what would Samoa be like in the next 20-30 years, and we build the infrastructure that is going to cater for and meet that demand.
“Like the airport, we don’t want to spend millions and then next five years tear it down and rebuild—that is not proper planning. We are looking at the long run, be confident in what we can do, and we borrow what we can afford,” he added.