29 March 2022
The Permanent Secretary (PS) of Ministry of Finance and Treasury (MOFT) Mckennie Dentana has refuted claims on the front page of Solomon Star article published today 29th March that the Government is in Financial Distress and had hit rock bottom
In a statement to the media, PS MOFT Mckennie Dentana reassures the public and all stakeholders, that although Solomon Islands is facing a challenging time, like all other countries throughout the region due to the current pandemic, the Ministry is managing government finances prudently and responsibly according to law, to ensure that resources are available to meet the financial obligations of the Government during this challenging times.
Mr. Dentana also confirm that Solomon Islands had faced a significant challenge since 2020, which was further exacerbated by the burning and looting of private and public infrastructure in Honiara in late 2021 and the Covid-19 community transmission since January this year. Those unfortunate events had put a lot of pressures on government finances. However, despite the significant pressures, the government has taken control of the situation and put in place appropriate fiscal measures to manage and mitigate the financial situation pragmatically.
Mr.Dentana further revealed that the Government’s current financial position is robust and well above the IMF Benchmark of 3 months of expenditure cover.“This means that the Government can still meets its financial obligation for the next three months even though if limited or no domestic revenue is collected from the major Government’s revenue agencies,”
Mr. Dentana revealed that despite the pandemic since 2020 and its impact on Government finances, the Ministry has always ensured that fiscal management is a number one priority and always maintained under the benchmark due to uncertainties of the pandemic and to ensure that Government has some resources to meet its obligation when the domestic economic activity shuts down. This is exactly what we experienced during the recent lockdown. “I am comfortable and not too worried because the Government has some resources to meets it obligations despite the recent lock down or seizure of economic activates especially here in Honiara.
Our cash position today is even 22 per cent stronger than on 31st December, 2021”, Mr. Dentana pointed out. However, this year will be a challenging year given the forecasted negative growth of the local economy due to last year’s unrest, the COVID-19 community transmission and the potential fallout of the Ukraine/Russia conflict that will transmit into the commodity prices that reaches our shores.
According to Mr.Dentana his ministry will continue to ensure that the Government’s financial position remains strong throughout the year to enable the Government to continue to deliver its commitments.
Mr. Dentana clarified that what might have caused the delays or arrears to some of the suppliers could arisen because of the limited budget within the Government Ministries during the current interim period.
There are some arrears that are outstanding since last year, but because of the limited budget Ministries cannot process the payments .He explained at the moment, the government is yet to pass the 2022 national budget, and thus, the government is operating under an interim budget. As a result, the expenditure is being prioritized to essential services, utilities, payroll, rental and the arrears are being managed slowly but being settled.
The Permanent Secretary added when the 2022 budget is passed in Parliament, the government will ensure all financial commitments are catered for in a timely and efficient manner.
Source-GCU
Yours sincerely
Frank Short
