Debt to China in “millions” not “billions”, says Minister

By Joyetter Feagaimaali’i-Luamanu ,

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MINISTER OF FINANCE: Sili Epa Tuioti.

MINISTER OF FINANCE: Sili Epa Tuioti. (Photo: Samoa Observer)

The Minister of Finance, Sili Epa Tuioti, has reassured the nation that Samoa’s debt to China is in the “millions” instead of “billions.”

But the Minister couldn’t provide the exact figure. He assured instead that there is nothing to be alarmed about since the Government has the ability to make the repayments.

Sili also defended the need for the Government to continuously borrow money to finance much-needed developments such as road infrastructure.

 “Without the grants and loans, we wouldn’t be where we are today,” he told the Sunday Samoan.

Asked about concerns surrounding Samoa’s loans to China, the Minister said: “I can tell you it is in millions not billions.” 

The Sunday Samoan put the questions to the Minister after Prime Minister Tuilaepa Sa’ilele Malielegaoi said questions about specific figures should be directed to the Minister of Finance.

 “I am the Prime Minister, not the Minister of Finance anymore who takes care of the numbers,” Tuilaepa had said during a previous interview where the issue of debt was raised.

Told about this, Sili said: “I do not have the figures here in front of me, but here is what I have to say.  As I mentioned, we are quite comfortable with our debt service payment every year."  

“And that covers all our loans under the sun including the World Bank, the A.D.B. and the Chinese loans."

Sili said he would have to look at the budget for the final figures.

“I don’t have a copy of the budget on me and maybe you can email me and I can send it to you for China loans,” he said.

Emails sent to Sili about the details have not been responded to as of press time last night. 

But Sili agrees with the Prime Minister that the Government has the ability to pay the loans each year. 

“The loans appear to be in significant amounts but looking at our capacity to pay, our loan payments are actually the first funds that we set aside for each year,” he said.

“Although we do have the capacity to pay, you also must consider that we need these loans. 

“Otherwise, unless we increase our income taxes to 100 percent, that is the only way to get the funds we need for our development. 

“So the loans from the Chinese government and A.D.B. are for much needed developments in the country, such as road works, hydro’s and also to fund other projects. 

“Like this Complex (the temporary Parliament complex) was funded by the government of China. 

“So I am not really concerned over the loans, because I know we have the ability to pay. Another important aspect is that we must utilize the loans for development projects.”

He reiterated that “without the loans and grants, we wouldn’t be where we are today because there is no way we can afford our big projects, such as the Airport. 

“That project is also funded by loans secured by the government,” he said. 

“Our big projects for electricity developments, school buildings even healthcare the loans have played a huge role in these developments. 

“Almost every sector somewhat operates on loans and like I said if we don’t borrow we won’t be able to go through with the developments…. And if we do borrow we don’t just borrow a significant amount, there has to be specific project in order for us to seek a loan.”

Sili added that the loans from the Chinese government have been converted to grants. He did not specify which ones. 

“Most of the loans from the World Bank and A.D.B. the repayments are concessional and other funds we get from them are grants,” said Sili. 

The Minister of Finance said it would be irresponsible to borrow knowing the government cannot pay the loans. 

“The impact of not paying our loans will only tarnish our reputation globally, meaning no one would want to lend us money or no one would want to invest in Samoa. 

“The World Bank, A.D.B. and the Chinese Government are happy to lend us monies knowing that we are putting it into good use.

Last month, Prime Minister Tuilaepa Sa’ilele Malielegaoi rubbished claims that the government is borrowing “billions” from the Chinese Government. 

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

He was adamant the reports circulating online are wrong.

“Again it is totally wrong,” he said.

Reports circulating on social media claim Samoa’s borrowing from China has reached several “billions.”

But Tuilaepa said there is nothing to hide about what Samoa owes China.

“The amount is also included in the financial budget annually. In the budget it has the total amount of the repayment,” he said. 

“Another thing is, there is no need to be concerned over the totality of the debt, because it’s not important. 

“What is more important is the annual repayment that is how a country should address its debt.”

© Samoa Observer 2016

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