Foreign investment continues downward trend
A total of 45 new Foreign Investment Enterprises were registered in Samoa in the 2019-2020 fiscal year continuing a trend of a steady decline over the past five years, a new report shows.
The Ministry of Commerce Industry and Labour’s (M.C.I.L.) annual report states that despite the new enterprises’ registration, the figure represents a year-on-year drop of 26 per cent.
Foreign enterprise investment in Samoa peaked in 2015-2016.
The Ministry said the steady decline owed to a challenging investment environment including a lack of incentives to attract foreign investment.
Listed among these failings, the Ministry says insufficient promotional activities are undertaken to further promote Samoa as a favourable investment destination.
But changes to administrative classifications also contributed to the downturn, the Ministry says.
“One of the contributing factors to the decline from [2016-2017] onwards is the change in administrative procedures where overseas consultants employed by Government are no longer registered as Foreign Investors,” the report said.
The Ministry’s annual report stated that towards the last six months of the period under review, foreign investment was severely impacted by the 2019 Measles epidemic followed by the arrival of the global COVID-19 pandemic and the closure of Samoa’s national borders.
Investors favoured the ‘professional services’ and ‘retailing’ sectors which drew eight new enterprises each. ‘Manufacturing’ and ‘restaurants’ followed.
The newly created businesses will create an estimated 478 potential employment opportunities.
The businesses will bring working capital equal to SAT$1,846,041 into Samoa’s economy based on information contained in their application forms.
In comparison to the estimated initial working capital of SAT $8,387,390 recorded in the previous financial year. The reduction represents a drop of nearly 80 per cent reflects not only the drop in the number of businesses registered but the changing nature and working capital of businesses seeking to incorporate in Samoa.
The Ministry says it participated in overseas seminars including the first-ever Pacific Exposition in New Zealand; a seminar on trade and investment facilitation in China and also Fiji’s first Korean and Pacific Business Seminar.
The Ministry says the events promote Samoa as an international destination of choice for investors but also teach their staff important knowledge about building an attractive investment environment for foreign workers.
The Ministry conducted annual awareness programmes in Upolu and Savai’i to raise public knowledge about foreign investment in Samoa.