BY NED GAGAHE
The government has reaffirmed its commitment to establish a Sovereign Wealth Fund and revive the National Bank of Solomon Islands, describing both initiatives as critical pillars to strengthen the country’s financial independence, reduce poverty and ensure long-term economic prosperity.
Minister for Finance and Treasury Gordon Darcy Lilo made the announcement during the Central Bank of Solomon Islands (CBSI) Golden Jubilee celebrations held at Heritage Park Hotel in Honiara yesterday, where he outlined the government’s vision for a more inclusive and resilient financial system.
Minister Lilo said the proposed Sovereign Wealth Fund will create opportunities for national institutions such as the Solomon Islands National Provident Fund (SINPF), insurance companies and future public wealth entities to invest in productive domestic assets rather than relying heavily on overseas markets.
“It creates the conditions in which institutional wealth held by our own National Provident Fund, by insurance entities and future public wealth vehicles can be invested at home in productive Solomon Islands assets rather than exported to foreign markets,” he said.
Mr Lilo described the Sovereign Wealth Fund as a ring-fenced, rules-based institution that will convert a portion of the country’s natural resource revenues and fiscal surpluses into long-term national wealth.
“The model is well understood internationally. What has been missing in Solomon Islands is the political will to establish it,” he said.
He stressed that the fund must be protected from short-term political and fiscal pressures, saying strong governance arrangements will be essential to its success.
“The prohibition against using the fund as an instrument of short-term fiscal management has to be paramount in this whole architecture.”
The Finance Minister said CBSI will play a key role in the initiative due to its experience in reserve management, investment governance and financial oversight.
“The Central Bank of Solomon Islands, with its demonstrated expertise in reserves management, its investment governance framework and its institutional credibility, has a natural role to play as an anchor institution in the development of both the domestic capital market and the Sovereign Wealth Fund,” he said.
Mr Lilo also announced the government’s intention to re-establish the National Bank of Solomon Islands, describing it as a strategic response to persistent financial exclusion and growing poverty levels.
The former National Bank was once regarded as the country’s most extensive banking network, providing services to many rural communities before its closure.
“As we look ahead, the rationale for re-establishing a national bank is clear, and it must be revived.
“It is the commitment of this government, and I want to announce today that the re-establishment of the National Bank is an important strategy for restoring a sense of ownership, strengthening our sovereignty over financial intermediation and ensuring financial services are inclusive and meet the needs of our people,” Mr Lilo said.
Minister Lilo said access to affordable credit and banking services remains a challenge in many parts of the country, particularly in rural communities.
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