National Government Debt Reached $2,810.7 Million at end of December 2023

The National Government’s (NG) total outstanding debt had settled at $2,810.7 million at the end of December 2023.  The government’s level of debt is sustainable as it accounts for only 19.0% of the Country’s GDP, compared to the IMF recommended threshold of 35.0% of GDP.  This is according a report released during a press statement this afternoon by the Ministry of Finance and Treasury.

The Ministry of Finance & Treasury also revealed today that governments new borrowings in 2023, was only $340 million.  The $340 million was mainly sourced from the domestic market to fund priority development and infrastructure projects during the year that aimed to improve the quality of living for all Solomon Islanders.  This also include support to the 2023 commitment.

Like all Governments, key priorities are the economic recovery efforts in building the nation’s economic resilience by focusing on policies that will promote the country’s economic recovery across all sectors and avoid a further deterioration of the economy.

The Ministry revealed that these domestic facilities are at highly concessionary rates and on longer terms, which augur well with existing public financial management environment which include consistency with the Public Financial Management Act, 2013.

The Ministry also clarify today that the SIG on behalf of the projects, had also drawdown funds from external sources to implement priority national infrastructure projects aimed at growing the economy and improving the people’s livelihoods in the country. The funding’s of most development projects were initially signed with the Asian Development, World Bank (IDA), the IFAD and Exim Bank of China PRC prior to 2023.

Some of these loans were signed in 2019 and are still been disbursed to-date. These loans were already factored in the Ministry’s Annual Borrowing Limit, and therefore, are not counted as New Borrowings.  The SIG on behalf of these projects, withdrew about $450 million from these external sources in 2023. These loans and drawdowns include projects under the World Bank Road and Aviation Project or SIRAP, and under the ADB Land and Marine Time Projects.

The Ministry of Finance and Treasury therefore clarify that with the fully drawn new borrowings of $340 million in 2023, and the drawdowns of existing commitments of $450 million resulted in the rise in the overall SIG debt stock by approximately $790 million in 2023.

In summary, the stock of government’s debt is at a “Moderate and Sustainable Levels”. To ensure that debt levels remain at a sustainable and affordable level, the SI Government is committed to ensure that any new debts are incurred incrementally, and in a steady and predictable manner and only for major economic development projects, and consistent with the Solomon Islands legal framework.

ENDS///