BY NED GAGAHE
The Solomon Islands Government will establish a Sovereign Wealth Fund that aims to secure long-term benefits from the country’s mineral resources for future generations.
Prime Minister Matthew Wale revealed the plan while outlining ongoing reforms in the country’s mineral sector.
Speaking to media upon return from his official visit to Australia and New Zealand on Wednesday, Prime Minister Wale said the government is determined to avoid repeating the mistakes experienced in the logging industry, where the country failed to fully benefit from its natural resources.
“Reforms in the mineral sector will continue and there are more reforms coming in this sector,” Wale said.
“What we all want in the mineral sector — we all do not want to see a repeat of what is happening in the logging sector. They robbed us, and we do not want that happening in the mineral sector.”
The Prime Minister said the Finance Minister is expected to table legislation in Parliament towards the end of next year to formally establish the Sovereign Wealth Fund (SWF).
“Towards the end of next year, the Finance Minister will take a bill to Parliament to set up a Sovereign Wealth Fund where all the revenue from mining will go into it,” he said.
According to Wale, the fund will invest mining revenues both locally and overseas to generate strong financial returns for the country.
“It will be invested where the highest returns are, not necessarily here. It will be overseas as well,” he said.
“And dividends will come back to the budget to finance health and education.”
Wale described the initiative as a “generational policy” designed to ensure the country’s mineral wealth remains sustainable for future Solomon Islanders.
“As you know, we have some big mining assets and some world-class mineral reserves,” he said.
The Prime Minister added that part of the government’s reforms will ensure the state secures larger shares in mining projects while also guaranteeing benefits for landowners and provincial governments.
“So, part of these reforms is to ensure that the government holds big shares in it,” he said.
“Also, these shares ensure landowners and provinces benefit and raise revenue from it.”
Meanwhile, the Central Bank of Solomon Islands has strongly advocated for the creation of a Sovereign Wealth Fund, describing it as an important mechanism to secure long-term macroeconomic stability.
CBSI Governor Dr Luke Forau earlier said the fund will help the country better manage revenue from natural resources while building resilience against future economic and climate-related shocks.
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