No ESP in govt 2022 budget

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The Democratic Coalition Government for Advancement (DGCA) Government has not allocated funding for the proposed Economic Stimulus Package in the 2022 Budget.

Ministry of Finance and Treasury permanent secretary, McKinie Dentana in October 2021 announced there is a possible second ESP depending on the outcome of monitoring and evaluation of the effectiveness of the current ESP payments.

Dentana said the future payments would likely be restricted to bigger recipients such as exporters rather than to small farmers or business-owners.

About $306 million was approved for the ESP programme in July 2020.

A total of $230.1 million worth of projects and grants had been approved and paid up to 22nd March 2021.

In the first phase of the ESP hundreds of farmers and other micro- and small-businesspeople benefited from funding for practical business inputs such as tools or planting material.

In July 2020, $124 million was allocated for immediate measures to help these businesses cope with the economic impact of the COVID-19 pandemic, including $70 million for rural production, $44 million for forestry, fisheries and tourism businesses and $10 million for assistance through the Development Bank of Solomon Islands.

However, in the 2022 Budget Analysis, there is no funding for the ESP.

In the meantime, DCGA is projecting $400 million from external funding for development.

While the Budget Support decreased by 68 percent from $517 million to $308 million.

The ESP was DCGA’s fifth fiscal measure approved by Cabinet in April  2020 to address the negative economic impacts created by the corona virus on the local economy.

The primary objective of the ESP was to assist the productive sector  players to maintain production output at all levels of the production chain.

This is to ensure the local economy remains afloat during these challenging  times.

However, reports claimed the ESP failed to achieve its objective following the monitoring and evaluation process done in Honiara and the provinces.