23 Mar 2017

Solomons govt not seeking loans to finance deficit

6:54 am on 23 March 2017

Reports that the Solomon Islands government is seeking loans to resolve serious revenue problems are false according to the country's finance ministry.

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Photo: RNZI Koroi Hawkins

The reports have surfaced in relation to the proceed of a development bond issued to the country's national pension program called the Solomon Islands National Provident Fund.

According to online news site Solomon Fresh-beat the government on Monday signed an agreement with SINPF issuing Domestic Development Bonds worth more than 19 million US dollars.

But the permanent secretary of the Ministry of Finance Harry Kuma said this was not to finance a budget deficit but rather to raise funds for an undersea cable project the Government was pursuing with Huawei.

Mr Kuma said funding the project through development bonds was in line with the Public Finance and Management Act and was consistent with government's Debt Management Strategy.

He said the project when completed will improve internet services in the country provide opportunities for improved education and health services, and efficiency in business operation.

There had been criticism from the public and Members of Parliament in recent weeks of delays in government meeting its financial obligations including payment of public servant's salaries and contractors for services provided to government.