Samoa, a small and remote Pacific island country, is particularly vulnerable to economic and natural disaster shocks. In 2008−2009, it suffered severely from these shocks as, following the global economic crisis that caused its tourism, manufacturing, and agriculture receipts to fall, a tsunami hit the country. In December 2012, it was again hit by another natural disaster, tropical cyclone Evan, which brought about damages and losses estimated at around 28% of gross domestic product (GDP). This series of shocks caused the country’s GDP growth to average 0.7% during 2009−2013, including declines of 6.1% in 2009 and 1.9% in 2013.
Against this backdrop, the government turned to development partners to help deepen previous reforms and assist with the necessary fiscal adjustment to ensure debt sustainability. A medium−term fiscal framework (MTTF) was formulated and drawing on the progress and priorities of the 2008 public financial management reform plan, the government and several partners including ADB agreed to work together on a joint policy action matrix (JPAM).
The Public Financial Management Program, approved by ADB for a 2−tranche, $14 million grant in September 2013, adopted a subset of the JPAM and included actions relating to climate resilience. The program’s intended impact was long−term fiscal stability. Its intended outcome was improved fiscal management with a special focus on climate resilience. It was structured around 4 outputs: (i) improved SOE performance, (ii) improved public financial management systems, (iii) improved public debt management, and (iv) recovery from and resilience to natural disasters.
Under output 1: governance reforms to ensure SOE independence and improve performance were introduced in the Public Bodies Act of 2001; a public–private partnerships policy and planning and implementation framework were developed; and the policy on SOE ownership, performance, and divestment was enhanced. The appointment of an SOE minister in 2014 and the establishment of a dedicated Ministry of Public Enterprises are reform initiatives that would allow for more focused monitoring of SOE reforms.
Under output 2: an internal audit strategy was formulated; MTFF implementation was accelerated; and a procurement division was established in the Ministry of Finance (MOF) and is now leading procurement reforms.
Under output 3: the government’s debt management unit was strengthened; a debt management action plan was prepared in 2013 and updated in 2014; and procedures for contracting new loans and issuing government guarantees were approved by the Cabinet.
Under output 4: cyclone-damaged houses were rebuilt, using climate-resilient designs and materials; and a climate resiliency plan for Apia, Samoa’s capital and largest city, approved by the government, started to be implemented.
Successful delivery of the outputs enabled the program to achieve its outcome targets. Specifically, the Public Expenditure and Financial Accountability (PEFA) ratings for Samoa significantly improved between 2010 and 2013. None of the PEFA ratings were below the target C+ rating. Improvements were noted particularly in the 2014 PEFA rating for all the dimensions focused on by the program, including among others: composition of expenditure (B+); classification of budget (B); timeliness (C+); value for money and controls in procurement (C+); and oversight of aggregate fiscal risk (B). The government also continued to prioritize climate resilience in its 2015 investment program. Climate resilience was also supported by various programs funded by development partners in 2015.
ADB’s Pacific Department rated the program successful. The MOF was the executing agency.
