No new loans: Finance chief
A "small" rise in national debt to $1.09 billion was caused by existing loans – not new ones – as the Government vows not to go deeper into debt, the nation’s Finance Chief says.
Leasiosiofa’asisina Oscar Malielegaoi said that the recently reported increase in debt followed financing deals struck years ago.
“These loans started four years ago, one is for the fuel tank funded [by the] (Organisation of Petroleum Exporting Countries) O.P.E.C. and the second loan for the completion of the [Faleolo International] Airport called the Samoa Aviation Project and this was funded through [... the International Development Association],” Leasiosio said.
[The International Development Association or I.D.A. is the part of the World Bank that helps the world's poorest countries].
Leasiosio said while there is a prediction the national debt level will rise higher than 70 per cent of the nation’s Gross Domestic Product, but if it were to do so that would be because of the national economy contracting, not rising debt.
The C.E.O. assured the Government has no intention of seeking any new loans at the moment.
The total amount outstanding comprises public external debt totalling $1.08 million and public domestic debt of $9.5 million, the Ministry of Finance Quarterly Public Debt Bulletin for March 2020 reported.
“Total public debt increased by 1.4 per cent and by 4.4 per cent when compared to December 2019 and March 2019 quarters respectively,” the report said.
“Continuous disbursement for external loan funded [programme] and depreciation of tala against all the loan currencies were the main contributors to the increases.”
Leasiosio told the Samoa Observer the last tranche of the loan was included in the financial budget for 2020-2021 amounting to $11 million.
“They are not new loans, but they are a disbursement that has continued from over the years. And that is the reason behind the small increase which is $11 million tala,” he said.
In March, Leasiosio said the Samoa Government is a “responsible borrower” and is prepared to make repayments on loans from China and multilateral institutions including the International Monetary Fund.
Leasiosio told the Samoa Observer that repayments would be made to all the country's creditors, including the Asian Development Bank and the Japan International Cooperation Agency [J.I.C.A.].
“Every year, based on our domestic resources only 11 percent of [our] resources are used to pay debts, not only to China but all our partners, leaving us 89 percent to pay our salaries and operations and capital expenses,” he told the Samoa Observer in an interview.
Leasiosio said the Government is more than able to pay the debts.