Govt’s cash flow problem continues

By EDDIE OSIFELO

SOLOMON Islands Government is still facing a challenging situation with its cash flow.

This problem began around early June, pundits say June 18.

This was confirmed by Bruce Phillips, Accountant General  Ministry of Finance and Treasury in a leaked email to Minister of Finance, SIG Permanent Secretaries and SIG Financial Controllers.

Philips said presently Treasury has over $200 million of payments that it is not able to pay due to very limited cash flow. 

He said this situation has largely been brought about due to the significant 3rd quarter payments due in the first two weeks of July.

“The 3rd quarter payments relate broadly to provincial health funding, provincial administration and salary grants, education grants, parliamentary entitlements, housing rentals, other allowances and MRD constituency payments. 

“Naturally donor funded payments are NOT impacted nor are COVID related payments as these are funded separately from SIG,” he said.

Phillips said MoFT is working closely with supportive donors and the local debt market to address the current constraints.

“We anticipate agreeing terms for the use of almost $100m of JICA funding in the coming days to assist with the current funding shortfall,” he said.

Phillips said ministries are advised that there will not be  a quick-fix to the current situation and they are requested to proactively take all  necessary steps to ensure spending being incurred is prioritised and in accordance with the government’s clear redirection guidelines. 

“If Ministries do not act PROACTIVELY, Treasury will be forced to take more stringent steps to improve cashflow.

“During this time Treasury is also trying to slowly build up SIG cash reserves to a more acceptable level,” he said.

Phillips said Provincial touring imprests or payments in particular will continue to be closely scrutinised along with other non-essential expenditure.

He said Treasury will continue to prioritise weekly SIG salaries, utility payments, provincial government grants, housing rental payments and MRD related payments.

Phillips said a further cashflow update will be provided on Friday, July 23.