Government

Samoa Records first $1 billion Tala Budget

Published

11 months ago

June 7, 2023

Lagi Keresoma

Part of Samoa's main business centre in the capital Apia

By Lagi Keresoma

APIA, SAMOA – 06 JUNE 2023: Samoa has crossed over to its 61^st year as an independent nation with its first $1billion tala budget.

The 2023/2024 Budget was presented by the Minister for Finance Mulipola Anarosa Ale Molio’o in Parliament last week on the theme “Advancing Growth Through Sustainable Pathways Conducive to Socio-Economic Welfare and Building Resilience.” The budget noted the reduction in the country’s external debt and an increase in its internal expenditures.

“Twelve months ago, I presented the Government budget that prioritized inspiring a quick recovery for Samoa that considers inclusivity, innovation and ensuring resilience,” said Mulipola.

The total 2023/2024 Budget stands at $1,081,210,959.28 inclusive of development programmes sourced by the development partners, which will increase by 11% over the current year’s estimates.

“The increase in expenditures for the new financial year is a testament to the Government’s commitment to raise its spending in order to drive recovery and restore economic growth,” said Mulipola.

She also said the budget deficit of 3.3% is for the next financial year as the Government continues to drive its development agenda towards a quick recovery whilst ensuring that socio-economic welfare and stability is maintained.

REDUCTION OF EXTERNAL DEBT
The budget also Mulipola reiterates Government’s commitment to a no non concessional loans policy since taking office in July 2021. This has resulted in the 32.1% reduction of the external debt to GDP ratio by the end of the financial year 2023/2024.

Samoa’s debt stock which was ST$949.5 million has dropped to ST$934.0 million.

“This declined from 51.8% in FY21/22 when the threshold was breached, to 34.4% by the end of FY22/23. In terms of debt stock, this will reduce from $949.5 million tala to $934.0 million tala including external debt of $933 million tala and domestic debt of $1 million tala,” Mulipola said.

The Minister of Finance, Mulipola Anarosa Ale-Molioo speaking in Parliament.

GOVERNMENT OPERATING ON GRANTS
According to the Minister, “Samoa has managed to honour its commitment to not take on new loans opting instead for standby facilities that have been disbursed on a full grant basis.”

She said these facilities along with the general budget support from the development partners have enabled the Government of Samoa to raise its spending over the course of the past three years.

“This has done a great deal to ensure that the economy remained buoyant despite the declining growth and high inflation,” she said.

REMITTANCES CONTINUE TO RISE
The Samoan saying “E lele le Toloa ae maau i le Vai” is certainly true when it comes to Samoans living abroad who continue to contribute to the country’s economy.

The Budget recorded remittances as the highest money earner for the 2021/2022 financial year that sits at ST$732 million.

“The remittances continue to climb with totals recorded at the end of the fiscal year 2021/2022 at $732 million,” said Mulipola.

The amount is expected to register at around $776 million for the current 2022/2023 financial year.

The remittances are not only contributions of family members residing abroad, but also from the Regional Seasonal Employees (RSE) workers in New Zealand and the Labour Mobility scheme in Australia.

INFLUX OF INBOUND VISITORS SINCE BORDERS OPENED
Samoa re-opened her borders in August 2022 and since then there has been an influx of visitors from around the word.

From August 2022 to March 2023, 77,195 visitors were recorded to have visited Samoa and this includes not only tourists, but those who attended international conferences hosted in Samoa, and other events such as the Miss Pacific Pageant, the yearlong 60^th independence celebrations, church conferences and sports competitions.

According to Mulipola, visitor’s arrivals and earnings have also been restored with total visitors recorded at the end of March 2023 standing at approximately 77,195 and earnings to be around $253million.

KEY DEVELOPMENT AREAS
Mulipola said the 2023/2024 budget will see the continued commitment of the Government to the implementation of the Pathway for the Development of Samoa through partnerships with communities and the private sector.

It continues to emphasize the prioritization of the socio-economic welfare of the nation, particularly following three years of uncertainty under the threat of the COVID-19 pandemic.

Some of the key areas identified for development incorporated under various Ministries funding include:

$51 million for District Development Programme
$33.3 million for the Senior Citizen Pension Scheme
$20 million for CHOGM 2024 preparations
$4 million for Land Compensation
$3 million for Medical Specialist Clinic
$2 million for the Disability Benefit Package
$1 million for Forensic Audit
$500,000 for Shelter/Hygiene financing through ADRA Samoa
$500,000 for Samoa Victim Support Group

ESTIMATED BUDGET FOR EACH MINISTRY FOR 2023/2024

Ministry of Agriculture and Fisheries – $19,967,480
Scientific Research Organisation of Samoa – $5,815,359
Ministry of Commerce, Industry & Labour – $18,926,871
Samoa Tourism Authority – $7,171,354
Ministry of Communications and Information Technology – $11,596,849
Office of the Regulator – $3,782,221
Ministry of Education, Sports and Culture – $139,162,748
Samoa Qualifications Authority – $6,913,566
Samoa Sports Facility Authority – $3,612,717
National University of Samoa – $30,856,805
Ministry of Finance – $114,471,307
Ministry of Foreign Affairs and Trade – $27,205,453
Ministry of Health – $146,544,809
National Kidney Foundation – $10,875,819
Ministry of Justice and Courts Administration – $15,572,666
Ministry of Natural Resources and Environment – $29,374,460
Ministry of Police and Prisons – $55,701,690
Fire and Emergency Services Authority – $13,920,455
Ministry of the Prime Minister and Cabinet – $9,583,853
Ministry for Customs and Revenue – $13,441,055
Ministry for Women, Community and Social Development – $64,755,036
Ministry of Works, Transport and Infrastructure – $42,779,504
Land Transport Authority – $42,601,827
Office of the Attorney General – $5,840,075
Office of the Auditor General – $4,492,999
Office of the Electoral Commissioner – $4,266,735
Office of the Clerk of the Legislative Assembly – $8,227,199
Office of the Ombudsman – $1,683,902
Public Service Commission – $10,530,220
Samoa Bureau of Statistics – $5,789,365
Law Reform Commission – $1,506,886
Ministry for Public Enterprises – $$7,840,279

Unforeseen Expenditure – $22.8 million based on the total Ministries expenditure programmes.

Development Expenditure – The total cash grant assistance of $165.4 million is expected to finance development expenditures for ongoing projects, sector programs, as well as new approved investments in all sectors, primarily in the transport & infrastructure, agriculture & fisheries, health and education sectors. The sector budget support will continue for the health, water, agriculture & fisheries, with the final year for the education sector program.