Transparency and accountability lacking in public spending: IMF findings

BY JOHN HOUANIHAU

The Solomon Islands continues to face some weaknesses in transparency and accountability of public spending.

This was according to the recent key findings of the International Monetary Fund (IMF) mission to the Solomon Islands.

“This underscores the critical importance of implementing the new CDF framework and also applying the lessons learned, identify the report, to future policies,’’ Masafumi Yabara told local media during a press conference.

He said the IFM also see some of the lack or the shortage of capacity and resources in government officials involved in audit and procurement.

“More training is needed, and also there is a need for a strengthening legal framework for auditing,’’ he said.

On the monetary side, Mr Yabara said that the IFM supported the decision by the central bank to ease monetary policy on September 24.

“We argue that monetary policy should remain data-dependent, which means that the central bank continues to monitor economic developments and stand ready to adjust its policy stance as necessary,’’ he said.

He said that the IFM also noted that the Solomon Islands has a fixed exchange rate regime, and the value of the Solomon Island dollar is fastened to the value of the currency basket.

“We note the recent update of the currency basket to ensure that the basket reflects the latest trade structure of Solomon Islands. It’s a good development. The financial sector remains stable, but we also note that bank lending has not kept pace with the economic trends,’’ said Yabara.

He said that the IFM also see that promoting financial inclusion, especially in rural areas and among women, remains a top priority.

“We see that strengthening capacity for anti-money laundering and combating the terrorism of financing, we call the AMS-CFT, is also a challenge and remains a priority. On the structural reforms, as I said in the beginning, enhancing growth potential is an urgent priority.

“One thing that we recommend is upgrading transport connectivity in rural areas. It could enhance the efficiency or productivity of the agriculture and fishery sectors,’’ he said.

Mr Yabara said that the IFM also see that legislation to address governance weaknesses in the minerals and forestry sectors is an urgent priority.

“We also see some lack or a shortage of capacity and resources of the Independent Commission Against Corruption, so we recommend it needs to be addressed,’’ said Yabara.