National Provident Fund rebuffs government request to borrow $150 million

 

THE Government has approached the Solomon Islands National Provident Fund (SINPF) for a $150 million loan, industry sources have confirmed.

But the request was denied, with insiders citing such a huge loan would put the workers’ savings scheme in the red for the first time since its inception.

It is understood the SINPF Board was informed of the request by the Chairman and former politician, Peter Boyers.

But the Board decided that such a request was a matter for the SINPF Management to assess in terms of the financial capacity of the workers’ savings scheme to absorb without adverse consequence to the fund, sources said.

A recent change in regulations saved the day for the National Provident Fund.

That change transfers the authority to allow or otherwise any transactions that have the potential to adversely affect the SINPF to the Central Bank of Solomon Islands.

Until the change recently, the Minister of Finance and Treasury, by designation held that authority.

It is understood the CBSI advised against lending the money.

“Had the request been acceded to, it would have put the National Provident in the red for the first time,” one source said.

It is not clear what the government needed the money for.

In the past two weeks, it was unsuccessful in another attempt to obtain a $50 million loan from the Solomon Islands Ports Authority (SIPA).

Others said it would seem the government is hard pressed to meet commitments, which keep piling. It has, for example, exhausted its $233 million borrowing ceiling allowed for in the budget.

The situation is said to be the same with treasury bonds which government uses to raise new money.

It has reached its ceiling and no new bonds will be issued for the next six months yet.

The situation could get worse as a result of shortfalls expected in revenue collection projections in this year’s budget.