The Gambling Control Authority has joined the list of organisations loaning money from the Samoan Nation Provident Fund. The GCA has been given $12 million to buy a building in the Apia Central Business District.

Amazingly, the building is owned by the SNPF, which bought the building a few years back at a much lower price. In this deal, SNPF is making a profit on the sale of the building and then getting interest from the loan repayments. It is also interesting to note that the initial application for the loan was rejected and then an approach was made to the Accident Compensation Commission. When has the ACC entered into the business of giving loans?

The GCA could have gone to a commercial bank like normal businesses do, but it chose to milk the government cash cow. As stated before, the SNPF is not a cash cow; its purpose is to be a retirement fund for the people of Samoa. Yes, it can make investments, and the returns from that can be added to members' contributions as dividends.

In recent times, there has been a large amount of loans given to businesses by the SNPF and also recently it was shown that some businesses are unable to service their loans. In the Princessa case, the company was loaned $4 million and was expected to pay back around $50,000 monthly. SNPF has taken the business to court to retrieve its money because the company could not keep up with the payments.

Hopefully, the SNPF has done its due diligence when approving the loan to GCA and looked at its ability to make the repayments. From the looks of it, since the loan to GCA was three times more than Princessa’s, the repayment would be three times more. It was said that one of the reasons why the GCA was purchasing the building was that the rent was expensive. At repayment of more than $100,000 per month, that rent now seems cheaper.

The other question is that of the guarantor. It is easy to assume that since the GCA is part of the government, the guarantor would be the government. This scenario does not bode well with many, past experiences have seen the government having to pay back the money loaned. Does Samoa Airways ring a bell? In this case, the people’s money has been borrowed, and then failure to pay this will see the people paying it back themselves.

There is also a question of security. The SNPF was questioned why the Samoa Independent Seventh Day Adventist Church (SISDAC) was given a $13 million loan. The response was that the church had security. Now, the same principle, if applied to the GCA, would have to produce the same result, but the GCA does not own buildings or properties after it was established in 2015. According to the financials of the GCA provided on the Ministry of Public Enterprise website, in 2016, its annual revenue was around half a million tala and in 2017, $1.1 million. The financial records from 2018 onwards are unavailable on the MPE site.

This would be the right time to know how much revenue the GCA is making annually, and is it in a position to service that loan. It is estimated that the repayment for the loan would easily exceed $1.5 million annually. We stand to be corrected if the figure misses the mark. Does the GCA make enough revenue to be able to pay this loan? This is an important question that the SNPF and GCA owe to the people of this country, whose money is in the SNPF.

Hopefully, the SNPF can also explain how the repayments of the loans given to other businesses are going and if all repayments are on time. This is not a confidential matter. When you use the money that belongs to people to give loans, people have a right to know if that money is being recovered or not.