Exchange Rate Arrangement

The exchange rate of the tala is pegged to a trade and payments weighted basket of currencies. The pegged rate can be adjusted within a ±2 percent band. The basket is a composite of the currencies of Samoa’s most important trading partners and countries that are major sources of tourism revenue from abroad––New Zealand, Australia, the United States, and Euro countries. The exchange rate regime is free of restrictions and multiple currency practices.

Article IV Consultations

Samoa is on a 12-month consultation cycle. The previous Article IV consultation discussions were held during February 8–17, 2017. The consultation was concluded by the Executive Board on May 1, 2017 (IMF Country Report No. 17/112).

Safeguards Assessments

An update safeguards assessment of the Central Bank of Samoa (CBS) was completed in June 2014. The assessment found some safeguards elements in place, but concerns over CBS autonomy and governance, audit quality, and staff capacity need to be addressed. The CBS has taken steps to address these, including improving its governance and autonomy through enactment of a new central bank law in 2015. In line with the safeguards policy, the CBS should accelerate efforts to strengthen the quality of the external audit. The CBS should also take further steps to enhance oversight of audit functions.

AML/CFT

Samoa has improved its AML/CFT framework since the 2006 assessment, including through the Money Laundering Prevent Act 2007 and subsequent regulations in 2009. These better align Samoa’s framework with the FATF’s recommendations under the third round of mutual evaluations. The FATF recommendations were revised for the fourth round in 2012 and, in 2015, Samoa’s AML/CFT regime was assessed by the Asia Pacific Group on Money Laundering (APG) under the revised 2012 FATF standard. APG assessors found significant shortcomings in Samoa’s AML/CFT regime, rating it low or moderately effective in 10 out of 11 immediate outcomes assessing effectiveness, and non-compliant or partially compliant with more than half of the 40 FATF recommendations. Following the APG assessment, the authorities developed a national AML/CFT strategy, and are making progress towards its implementation.

Technical Assistance from Headquarters

The Pacific Financial Technical Assistance Centre (PFTAC) has provided assistance on budgetary management, tax administration, and financial sector supervision. MCM has provided assistance on monetary policy operations, banking, and insurance supervision and other central banking issues. STA has provided help with government finance statistics and balance of payments statistics, and FAD with tax administration and LEG with central bank law. Samoa is an IMF pilot on Correspondent Banking Relationships (CBR), on which it has received technical assistance from LEG and MCM.

FY 2017	Strengthen the Audit Function	PFTAC
	On-site examination Program	PFTAC
	Assist updating prudential standards for banks	PFTAC
	Financial Stability Analysis	MCMTA
	e-GDDS Implementation (JSA APD)	STASR
	National Accounts	PFTAC
	Attend Compliance Improvement Strategy Launch	PFTAC
	Develop Accounting Policy	PFTAC
	On-site examination Program	PFTAC
	Improve cash management	PFTAC
FY 2016	Revenue Administration Mission	PFTAC
	Review overall reform progress	PFTAC
	Strengthen accounting and reporting frameworks	PFTAC
	Capacity Building Supervisory Oversight and sector financial reporting	PFTAC
	Strengthen accounting and reporting frameworks and attend	PFTAC
	PFTAC Steering Committee Meeting GDDS: Follow Up (JSA)	STASR
	Strengthen Arrears and Returns Management	PFTAC
	On-site examination of a commercial Bank	PFTAC
	Improve cash management	PFTAC
	Compliance Risk Management	PFTAC
	Develop strategy on fiscal oversight for state-owned enterprises	PFTAC
	Monetary and Financial Statistics	STAFI
	Develop strategy on fiscal oversight for state-owned enterprises	PFTAC
	On-site examination of a commercial Bank	PFTAC
	Balance of Payments Statistics	STABP
	Strengthening Supervisory and Regulatory Framework	MCMTA

View Table

FY 2017	Strengthen the Audit Function	PFTAC
	On-site examination Program	PFTAC
	Assist updating prudential standards for banks	PFTAC
	Financial Stability Analysis	MCMTA
	e-GDDS Implementation (JSA APD)	STASR
	National Accounts	PFTAC
	Attend Compliance Improvement Strategy Launch	PFTAC
	Develop Accounting Policy	PFTAC
	On-site examination Program	PFTAC
	Improve cash management	PFTAC
FY 2016	Revenue Administration Mission	PFTAC
	Review overall reform progress	PFTAC
	Strengthen accounting and reporting frameworks	PFTAC
	Capacity Building Supervisory Oversight and sector financial reporting	PFTAC
	Strengthen accounting and reporting frameworks and attend	PFTAC
	PFTAC Steering Committee Meeting GDDS: Follow Up (JSA)	STASR
	Strengthen Arrears and Returns Management	PFTAC
	On-site examination of a commercial Bank	PFTAC
	Improve cash management	PFTAC
	Compliance Risk Management	PFTAC
	Develop strategy on fiscal oversight for state-owned enterprises	PFTAC
	Monetary and Financial Statistics	STAFI
	Develop strategy on fiscal oversight for state-owned enterprises	PFTAC
	On-site examination of a commercial Bank	PFTAC
	Balance of Payments Statistics	STABP
	Strengthening Supervisory and Regulatory Framework	MCMTA

Resident Representative

The Regional Resident Representative Office for Pacific Island countries based in Suva, Fiji was opened on September 13, 2010 and the office covers Fiji, Kiribati, Marshall Islands, Micronesia, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. Ms. Leni Hunter is the current Resident Representative.

Background

PFTAC has provided important and impactful technical assistance (TA) to Samoa in recent years on macro-fiscal planning and analysis, public financial management (PFM), revenue administration, and statistics. In FY18 Samoa will have received approximately 7 percent of PFTAC resources, comprising 12 missions delivered by experts over 138 days in the field plus 39 days of remote support from PFTAC. Fiscal missions predominated (4 revenue administration mission and 3 PFM), as well statistics (2 real sector and 1 GFS) as macroeconomic programming (2 missions). TA delivery is expected to increase around 40 percent in FY19 with 17 missions planned over 222 field days, again with a fiscal emphasis (8 PFM mission and 3 revenue), 3 macroeconomic programming missions and one each in real sector statistics, GFS, and financial sector supervision.

PFTAC TA aims to support the authorities to sustain progress on fiscal consolidation and to improve the macroeconomic environment. PFTAC will continue to focus on building macroeconomic analysis capacity and delivering specific technical inputs.

In the Public Financial Management area, PFTAC will continue to support the Ministry of Finance’s PFM reform plan with a PEFA scheduled to be undertaken during 2018. Since 2015, PFTAC has been providing TA to Samoa on improving cash management, accounting, and reporting, and fiscal oversight of state-owned enterprises. PFTAC is available in the coming years to provide follow-up support to strengthen the medium-term budgeting system.

Assistance in the macroeconomic area will continue to support improvements to GDP forecasting. A Macroeconomic Committee comprising members from the Central Bank of Samoa, the Ministry of Finance, the Ministry for Revenue, and the Samoa Bureau of Statistics (advisory role) was established in 2016. The Committee aims to produce and publish official economic forecasts for the next three years which are needed for fiscal projections. PFTAC will also continue assisting staff at the Ministry of Finance to enhance the SERF Model and to build capacity to produce their own debt sustainability analyses and external vulnerability assessments. This work continues to support building stronger links among all relevant macro fiscal entities to analyze the country’s economic and fiscal outlook. A key priority is to increase the understanding of the SERF Model, outside of the Ministry of Finance Economic Policy and Planning Division, to strengthen institutional structures for macroeconomic policymaking.

In the revenue area, Samoa’s Ministry for Revenue (MfR) continues to make good progress as evidenced through a strong legal framework and continued efforts with PFTAC assistance to strengthen core tax functions which included missions to: (a) improve on-time payment and filing of tax returns; (b) improve tax audit capability; and (c) strengthen the roll out of an industry partnership initiative introduced to improve tax compliance in cash economy sectors. MfR participates in all PFTAC regional training activities including a workshop to raise regional audit skills which was successfully co-facilitated by a senior MfR auditor who previously participated in a PFTAC Train-the-Trainer program.

In statistics, Samoa continues to be one of the most advanced nations in the Pacific region. Based on earlier PFTAC advice, for several years Samoa has produced quarterly National Accounts alongside several income indicators. In 2016 and 2017, PFTAC assisted with a rebase of GDP by production, which will bring methods closer into line with the 2008 SNA once published (expected April 2018); and also in developing a new measure of GDP by expenditure, which should come to fruition before end FY2019. The statistics office also produces quarterly and annual employment statistics, a rarity for the region. A two-week national accounts mission is expected to take place in the first half of FY2019

Balance of payments (BoP) and government finance statistics (GFS) standards were improved via missions funded by the Japan Administered Account (JSA1) project that concluded in September 2015. The September 2017 GFS mission assisted the statistics office to reconcile grants and transfer data for budgetary central government (BCG) and completed general government consolidation for the fiscal year 2016. A two-week GFS mission in expected to take place in November 2018 with a focus on expanding GFS coverage and compiling and reviewing public sector debt statistics. Since May 2017, Samoa have been eligible to request funding through the IMF’s Technical Assistance Office for Laos and Myanmar (TAOLAM) for BoP TA.

In financial sector supervision, in April 2017 PFTAC assisted the Central Bank of Samoa in reviewing and redrafting their suite of prudential standards for banks. The revised prudential statements are currently the subject of an industry consultation process, with all revised prudential statements due to finalized and issued by the end of 2018. This is an important achievement for the Central Bank of Samoa in enhancing its regulatory framework.

1) Post-disaster recovery projects

Enhanced Road Access Project: Aims to restore key road sector assets damaged by Cyclone Evan and enhance the climate resilience of critical roads and bridges in Samoa.

2) Budget support

First Resilience Development Policy Operation: Supports the Government of Samoa’s efforts to strengthen macroeconomic and financial resilience and increase Samoa’s resilience to the effects of climate change, natural disasters, and non-communicable diseases, including through reforms in the areas of revenue, AML/CFT, access to finance, building codes and standards, infrastructure asset management, pharmaceutical procurement, and taxation of unhealthy products.

3) Climate Resilience

Enhancing the Climate Resilience of West Coast Road: Focuses on ‘climate-proofing’ the West Coast Road from the airport to Apia.

Enhancing the Climate Resilience of Coastal Resources & Communities: Provides training and support in targeted communities to update and implement local Coastal Infrastructure Plans, and supports activities that increase the resilience of coastlines, near-shore areas, and coral reefs. The project will also help improve national climate information services and hazard mapping.

Pacific Resilience Program: Aims to strengthen early warning systems, promote resilient investments, and strengthen the financial resilience of Samoa by facilitating access to immediate liquidity after a natural disaster.

4) ICT Sector

Pacific Regional Connectivity Project: Aims to reduce the cost and increase the availability of internet services in Samoa. The project encompasses construction of a submarine cable connecting Samoa to Fiji; the establishment of the Samoa Submarine Cable Company (SSCC), a public-private partnership; and the provision of technical assistance to review, development and implement ICT regulation in Samoa.

5) Agriculture Sector

Agriculture Competitiveness Enhancement Project: Aims to support fruit and vegetable growers and livestock producers to improve their productivity and take greater advantage of market opportunities. The project covers three components – (i) livestock production and marketing, (ii) fruit and vegetable production and marketing, and (iii) institutional strengthening.

6) Aviation sector

Samoa Aviation Investment Project: Aims to improve operational safety and oversight of international air transport and associated infrastructure, including through improvements to runways, facilities, and navigation aids at the main international airport.

The IFC has also been active in Samoa, particularly in the telecoms sector. The IFC has invested substantially in Digicel, with market liberalization and increased competition helping to increase mobile access in Samoa to over 80 per cent of the population. The IFC has also provided assistance to the tourism sector, and has helped with the expansion of banking services to allow small and medium entrepreneurs find capital to start and run their businesses.