Solomon Islands Chamber of Commerce and Industry (SICCI) today (Thursday 20 August, 2020) pitched its support behind the large pipeline of infrastructure projects as being a key factor in the country’s economic recovery.
“While the economy is now in recession there are currently around SBD7.5 billion worth of infrastructure projects that are either underway or tabled for the next four (4) to five (5) years.
“Although some of the timeframes may have been extended due to the economic and logistical challenges brought on by COVID-19, we see these projects as vital to driving the recovery of the country’s economy and we are encouraged by works already commenced on several fronts,” a SICCI statement said.
The statement highlighted the considerable size of these projects including Solomon Water Capital Works (SBD 760M), Tina River Hydropower (SBD 1.95bn), ADB Ports and Road program (SBD 1.115bn), Kukum Highway Phase II (SBD 256M), World Bank Roads and Aviation Project (SBD 451M).
“There are also the bilateral agreements with Development partners such as the Stadium and construction works proposed for the 2023 Pacific Games which total to an approximate SBD2.5bn.
“Other planned State-Owned Enterprise Capital Works programmes, National Provident Fund and potential construction for residential and commercial estate developments are also not captured in this picture,” the statement added.
However, whilst supportive of the ambitious infrastructure spend, SICCI also urged the need for caution and planning.
“These are large scale projects which are either planned or have commenced.
“We would encourage the Government and relevant authorities to ensure there is sufficient local content to enable the economic benefit to remain inside Solomon Islands. Any essential expertise from offshore should be landing in Solomon Islands as soon as possible,” the SICCI statement continued.
“There also needs to be a firm handle on inflationary pressures as a result of the increase in demand for certain trades and contractors.
“In addition, there needs to be recognition of the productivity challenges for the rest of business in the country and in this regard, Government planning is paramount,” the Business Chamber said.
SICCI further noted how properly executed infrastructure would be essential to the rebound of the Agricultural sector, which also needs to play a significant part in the economy’s recovery and sustainability.
“There are two significant hurdles to an Agricultural rebound.
“The first is connectivity and the second is the lack of scalability due to limitations on land holding. However, agriculture is a key sector for the country and whilst we do see certain domestic consumption opportunities, we also see scope for increasing our internationally transportable commodities such as cocoa and coconut.”
Finally, the SICCI statement highlighted that banks and financial institutions also had their part to play in ensuring funds are made available for the Agricultural sector.
“Agriculture supports some 80% of the population however only attracts 1 to 2% of total bank lending.
“We trust the major banks will increase their support to this sector, complemented by players such as the newly formed DBSI who could capitalise on an opportunity to fill any gap in the market not serviced by these majors,” the SICCI statement ends.