On June 27, 2024, Samoa's Parliament approved the National Budget for the fiscal year 2024/2025 after a period of almost two weeks of intense deliberation and debate. The budget, presented by Minister of Finance Lautimuia Uelese Vaai on May 28, 2024, is themed “Sustaining Growth Pathways for the Social, Economic, and Climate Resilience of our Common Wealth.”
Key Highlights and Allocations
Economic Performance and Projections
The budget is designed to strengthen Samoa's economic recovery in the wake of the disruptions caused by the COVID-19 pandemic. After experiencing a substantial rebound with a GDP growth of 8.0% in FY2022/23, the economy is anticipated to grow by 6.6% in FY2023/24 and 5.8% in FY2024/25. This recovery is supported by robust economic activities, an increase in tourism, and higher remittance inflows.
Inflation and Foreign Reserves
Inflation is expected to stabilise at around 5% by the end of June 2024. The country's external sector remains strong, with official gross foreign reserves anticipated to remain above $1.5 billion tala, equivalent to 13.1 months of import cover.
Budget Strategy and Focus Areas
The budget strategy focuses on several critical areas:
Hosting of the Commonwealth Heads of Government Meeting (CHOGM)
Allocated $20.0 million tala for hosting expenses.
This includes costs for catering, accommodation, security, health and emergency services, transport, and venues.
The event is expected to boost the economy by attracting international visitors and investments.
People-Centered Priorities
Continued support for the $1.0 million tala per District program, enhancing educational sponsorships, agricultural development, and health improvements.
Increased funding for healthcare, including an additional $1.0 million tala for hospital maintenance and $6.0 million tala for overseas medical treatments.
Support for sports development, MSMEs, and NGOs to enhance community resilience and social safety nets.
Human Capital Development and Cost of Living Adjustment
Introduction of new initiatives to strengthen partnerships with professional bodies and up-skill public servants.
Final phase of the Cost-of-Living Adjustment (COLA) to boost public servants' purchasing power.
Comprehensive review and restructuring of the salary scales for the executive, parliament, and judiciary to ensure fair compensation.
Enhancement of Public Service Efficiency
Establishment of new ministries, including the Ministry of Lands and Survey and the Ministry of Sports and Recreation, to improve service delivery.
Development of the Samoa Credit Information Registry to reduce lender risk and improve access to finance.
Implementation of Key Development Projects
Commencement of the Savaii courthouse construction and the Alaoa Multipurpose Dam Project.
Construction of the Lano and Afega bridges under the Samoa Climate Resilience Transport Project.
Revenue Measures and Expenditure Priorities
The budget does not introduce new taxes but focuses on improving tax compliance. Total receipts are anticipated to increase by 7%, driven by an 18% increase in external grants and a 4% increase in ordinary receipts.
Total expenditures for FY2024/25 are estimated at $1.16 billion tala, reflecting a 4.0% increase over the current year's estimates. Significant allocations include:
Ministry of Education and Culture: $135.5 million tala.
Ministry of Health: $156.7 million tala.
Ministry of Agriculture and Fisheries: $20.4 million tala.
Development Expenditures
The budget anticipates total cash grants of $171.1 million tala for the implementation of development projects, with aid in-kind projected at $108.3 million tala. These funds will support projects across vital sectors, including transport and infrastructure, agriculture and fisheries, environment, health, and education.
Summary
The FY2024/25 budget reflects Samoa’s commitment to sustainable growth, economic resilience, and social welfare. By prioritising key development projects, enhancing public service efficiency, and supporting human capital development, the government aims to create a stable and prosperous future for Samoa. The approved budget underscores the collaborative efforts of the government, communities, private sector, and development partners in achieving these national goals.
For more detailed information, you can review the full Budget Address and Fiscal Strategy documents on the Ministry of Finance's official website.
Sources:
Budget Address FY2024/2025
Fiscal Strategy FY2024/2025
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