April 30, 2018

Government debt $1.1 billion, Samoa Central Bank says

Samoa Government’s total debt stands at WST$1.1 billion (US$428 million).

This is according to the figures released by the Samoa Bureau of Statistics (SBS) Financial Statistics for the December 2017 quarter.

The statistics are issued by the Central Bank.

The stats also reveal that Samoa’s debt to China is WST$416 million (US$162 million), making China Samoa’s biggest debtor.

The amount is higher than what Samoa owes the Asia Development Bank; World Bank and Japan.

In January, Prime Minister, Tuilaepa Sa’ilele Malielegaoi rejected reports that the Government debt to China had reached “billions”.

“It’s wrong, it’s totally wrong,” he told the Samoa Observer then.

“Look for a report issued by the Central Bank that is where the accurate information is found. It also indicates the amount (owed) to China.”

According to the report, Samoa’s debt to China fluctuates from year to year.

For instance, in 2015 it was WST$441 million (US$171 million). It decreased to WST$408 million (US$158 million) in 2016 before it increased again to WST$416 million (US$162 million) in 2017.

The loan to the Japanese government, through JICA is WST$89 million (US$34 million), says the report.

Last year, the total debt went up by WST$6.8 million (us$2.6 million) (0.6 percent) compared to December 2016.

Multilateral loans amounted to WST$532.3 million (US$207 million); 94.2 percent of the amount are outstanding to the Asian Development Bank and the World Bank.

“Multilateral loans was however lower than December 2016 by 7.4 percent ($1.4 million (US$545,000)),” the report reads.

“Bilateral loans on the other hand went up from December last year by WST$23.8 million (US$9.2 million) to stand at WST$505.0 million (US$196 million) during the review.

“The amount is comprised of loans to the People of the Republic of China and Japan through JICA at WST$416.0 million (US$162 million) and WST$89.1 million (US$34.7 million) respectively.

“Bilateral loans increased by 5.0 percent or WST$23.9 million (US$9.3 million) over the last twelve months.

“Domestic Debts for December 2017 quarter stood at WST$24.4 million (US$9.5 million), going down by WST$9.6 million (US$3.7 million) (28.3 percent) from last year,” according to the report.

Prime Minister Tuilaepa has repeatedly downplayed concerns about Samoa’s debt.

“For Samoa, we have our own Debt Management Policy that we watch very, very carefully to ensure that annually we are able to meet our debt service payments,” he said during a previous interview.

“Therefore, it is up to Samoa to carefully gauge its capability to meet its debt obligations and to carefully watch the borrowings that we make from international governments and institutions.

“Since all our debts are concessionary, we do not have such problems.

“We have very strong payment capabilities every year.  Very often for instance in many projects that we do, the construction period is up to 2 years and then we begin to earn revenue to help start paying the loans well, well, well before the grace period ends and the repayment of the loan and interests begin.

“So there are inbuilt cushions in a county’s debt level capacity, so long as they watch these debts service capacities very carefully and this is why we have institutions like the Central Bank of Samoa to carefully watch our debt obligations.” 

Tuilaepa has also repeatedly addressed concerns about the state of Samoa’s debt.

“What is often misunderstood is that people without the proper understanding of debt issues tend to be critical of a country’s overall indebtedness.  I don’t blame them for their ignorance,” he said.

“That is not important because overall, indebtedness does not highlight the fact that our debts are all on concessional terms and have different payment deadlines, some 10 years, 15 years, others 20 years and over.

“In our dealings with the Government of China, we have constantly requested for China to look at their grant element to increase the concessionality of their loans to Samoa,” 

SOURCE: SAMOA OBSERVER/PACNEWS

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