Cash flow pressure eased this week

PS Finance: Dentana
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PRESSURE on Government’s cash-flow is expected to ease this week.

This is after the Ministry of Finance and Treasury began releasing some of the money it collected domestically earlier this week.

Permanent Secretary McKinnie Dentana revealed this during a media Press Conference Cabinet yesterday.

“I am happy to inform the Press from this week we start to mobilise some of the domestic raised resources.

“Later this week the Minister of Finance will sign the first bond agreement from a bond purchaser that will help to implement government programmes especially the Development Budget,” he said.

The Government aims to raise about $300 million of bond in the $3.9 billion budget passed in April this year.

“So hopefully by the end of this week and going forward, this mismatch or the pressure should be eased when we start to receive other sources to fund the Development Budget,” he said.

Furthermore, Dentana said hopefully by the end of this week they should clear some of the arrears both in terms of the development as well as recurrent expenditures of government.

There is $2.7 billion in the Recurrent Budget, $938 million in the Development Expenditure and $258.5 million in the Budget Support Expenditure.

“Although this is a challenge we face, in terms of recurrent budget, at the end of July we implement more than 50 percent because of the prudential cash management in order to meet the priority of the government and ensure we implement the development budget.

“As of end of last week, we execute more than 25 percent of the Development budget,” he said.

Dentana said this is in line with their estimate because the Development Budget began implementation in June.

He said majority of the funding comes from control made on domestic revenue.

“As soon as additional funding help to fund Development budget, the pressure should be eased on the Recurrent Budget as well as Development Budget.”

Furthermore, Dentana said two major revenue streams of the Government, Customs and Inland Revenue Division performed strong up to end of July.

“Customs is striking above budget by 5 percent and Inland Revenue Division is performing above budget by 1.6 percent,” he said.

This is equivalent to $22 million collected by Customs and $16 million for IRD.

However, Dentana said the worrying part is in non-tax revenue where it involves Fisheries.

“Fisheries were below budget by 28 percent up to July.

“Most fisheries revenue not come together at one time. We expect big payments from Fisheries in fourth quarter of this year,” he said.

Moreover, Ministry of Finance and Treasury in consultation with Central Bank of Solomon Islands has revised the Gross Domestic Product growth rate from one percent to 1.3 percent.