Dear Editor,

I write this article based on my own understanding and analysis of the 25% safeguard under our laws. It is not meant to question the wisdom of the Ministry of Finance or the Central Bank, which hold far greater expertise in these matters, but simply to share practical reflections at this critical time.

The 2025 General Election is now behind us. Ballot counting continues, and soon, petitions and court cases will likely begin. While politics takes its course, Samoa’s economy is left operating under a constitutional stopgap — the 25% budget rule.

The 25% rule in law

Article 95 of the Constitution and Section 26 of the Public Finance Management Act (PFMA) allow the Minister of Finance, with Cabinet approval, to authorise expenditure up to one-quarter of the previous year’s appropriation until a new budget is passed. This safeguard ensures continuity of essential services: salaries, utilities, debt servicing, and other unavoidable costs. But make no mistake: Samoa cannot survive on 25% alone. It is a lifeline, not a long-term solution.

What happens when 25% runs out?

If no government is in place and the 25% allocation is exhausted, the law provides no room for further spending. The consequences are serious:

• Civil service pays at risk – Teachers, nurses, police, and other public servants may face delayed salaries.
• Hospitals and schools disrupted – Core services cannot operate normally without steady funds.
• Debt obligations in danger – Missing repayments to the World Bank, ADB, or other lenders would damage Samoa’s credibility.
• Private sector stress – Contractors and suppliers depending on government contracts will face cash-flow shortages, layoffs, and closures.
• Confidence collapse – Both local businesses and international investors will hesitate, seeing Samoa as unstable.

The 25% ceiling is a hard stop. Once reached, the law prohibits further expenditure without an Appropriation Act.

How long can 25% last?

Samoa’s 2024/25 budget was about SAT $1.1 billion. One quarter of that — SAT $275 million — is all that may be lawfully spent under the safeguard.

• Month 1 (July): Roughly, SAT $80–90 million goes to salaries, utilities, and debt servicing.
• Month 2 (August): Similar spending consumes another large share.
• Month 3 (September): Samoa will already be close to the SAT $275 million ceiling.

By October, if no budget is passed, Samoa faces a shutdown — not because the economy lacks money, but because the law forbids further spending.

Strong fundamentals, rising risks

The Central Bank’s June 2025 figures show resilience: inflation steady at 1.9%, interest rates low at 1.09%, and foreign reserves of SAT $1.56 billion. Yet resilience is not immunity. Confidence is fragile. If petitions and disputes drag on, donor support, investment, and business certainty will quickly weaken.

A nation on a countdown

The Constitution and PFMA provide the 25% safeguard for short-term stability. But it is a countdown, not a cure. Samoa cannot survive on the 25% existing budget.

I hope and pray to God for blessings upon the public servants who continue to keep government functioning during this uncertain season. You have been gifted by God with wisdom and experience to guide our nation while political stability is unsettled. 

Even as challenges arise, we pray God will help Samoa, protect our people, and carry us through to peace and stability.

Patea Loli Lolofietele M. Setefano