SOLOMON Islands is losing millions of dollars each day from the effect of COVID-19 community transmission on our economy.
Speaking during his fortnight nationwide address on Friday, Prime Minister Manasseh Sogavare said the effect of the COVID-19 community transmission in our economy is substantial.
“Lockdowns, curfews and restrictions and movement of people within Honiara and between islands continue to have an impact on our economy.
“The current COVID-19 outbreak including recent and potential future lockdowns poses continuing challenges to the government’s fiscal position and the economy more generally,” Mr Sogavare said.
He said the Economic Reform Unit estimated that the lockdown periods enforced in January cost the government between $70million to $80million in foregone revenues.
“Broadly in line with these estimates, preliminary findings of the Central Bank of Solomon Islands show that the direct loss of tax revenues during the most recent lockdown from January 25th to date average around $10.6million a day.
“The impact of the country wide lockdown on the economy was estimated at approximately $25million a day with the output loss for Honiara alone estimated at around $14million per day,” the Prime Minister said.
Mr Sogavare said during the January lockdown the Central Bank of Solomon Islands witnessed sharp contractions across all sectors.
He said the services sector experienced losses of $13million per day with significant falls in the retail and wholesale, public administration and transport sectors.
He said the manufacturing sector was the second largest hit with estimated daily losses of $8million while the agriculture sector lost an estimated $4million per day, due mainly to the sharp drop in the forestry sub-sector.
“Lastly the immediate knock-on-loss effect on other provinces estimated around $10million in line with supply chain disruptions.
“These measures while necessary not sustainable, especially in a small economy like ours. Supply chains have been disrupted and workforce affected.
“This has considerably slowed down our economy,” Mr Sogavare said.
Therefore, he said the government’s focus now is on mitigating and managing this crisis while at the same time resuscitating and growing our economy.
To do this, Mr Sogavare said the government has revised its objectives to effective control and manage transmission to protect our vulnerable citizens and maintain our domestic economy and accelerate our economic recovery in the short to medium term.
“The critical policy commitment of the government is to continue to strengthen response to COVID-19 outbreak, reconstruction of business buildings damaged in the recent unrest and ongoing efforts to keeping our domestic economy afloat,” the Prime Minister said.
He said the 2022 Budget Strategic Framework will demonstrate the government’s ongoing efforts to respond to the ongoing adverse impact of COVID-19 pandemic by stream lining government operation and support essential services from managing critical costs measures, lay strong foundation through growth, through focusing resources to target investments that will accelerate economic recovery in short to medium term while at the same time strengthen macro-fiscal stability and discipline and build back Solomon Islands Government finances to a sustainable level.
“The government remains committed to prioritise the productive and resource sectors.
“These two sectors are drivers and enablers of economic growth.
“The government plans to narrow down and focus on project that have been progressed under the government redirection policy since 2021 and expected to yield high economic returns in the short to medium term,” Mr Sogavare said.
By ESTHER NURIA