by Ronald Toito’ona

Solomon Islands Finance Minister, Manasseh Sogavare has presented the 2025 Budget to Parliament mid-week, detailing a comprehensive roadmap for economic recovery, resilience, and transformation. 

With the theme “Accelerating Accountable and Transformative Investments: A Pathway Towards a Resilient and Sustainable Economy”, Sogavare emphasized targeted investments to stabilize and strengthen the Solomon Islands.

In his speech to introduce the budget, Mr Sogavare acknowledged the lingering challenges since independence, compounded by global shocks and domestic crises. “Our economy is small, highly dispersed, and very vulnerable to adverse environmental challenges and global 

He also highlighted that the Solomon Islands economy is projected to grow by 3.8% in 2025, driven by a robust mining sector and an uptick in fishing and service industries. However, logging—historically a key revenue stream—is set to decline by 1.1%, underscoring the need for diversification.

Key Budget Allocations and Reforms

According to the finance minister, the government is prioritizing infrastructure as a catalyst for economic growth:

• Over $100 million allocated for roads, wharves, and buildings across Honiara and provinces.
• $45.2 million for improvements to the Solomon Islands Water Authority (SIWA), including sewer trunk works expected to improve sanitation and public health.

Focused on revitalizing the rural economy, the government has allocated:

• $20 million for cocoa and coconut development, aiming to boost exports by 50% and 40%, respectively.
• $30 million for an Agriculture Research Center to modernize farming practices.

“Supporting our rural economy is not just a policy—it’s a commitment to empowering our people,” said Sogavare.

For the first time, the tourism sector sees a significant allocation of $46.4 million, including:

• $18 million for youth entrepreneurs and operators.
• Investment in heritage and national parks, such as the Bloody Ridge National Peace Park.

In a bid to bolster human capital, $50 million is earmarked for expanding facilities at the Solomon Islands National University (SINU), alongside infrastructure investments in schools nationwide.

The government also plans to build eight Area Health Centers and Rural Health Centers with a $44 million allocation. “Health is wealth. This budget is a direct investment in our people’s well-being,” emphasized Sogavare.

Addressing Fiscal Deficits and Tax Reforms

The budget outlines an anticipated deficit of $1.274 billion, with plans to secure funding through external and domestic borrowing. Tax reforms are central to boosting revenues, with Sogavare proposing:

• Introduction of a Broad-Based Consumption Tax akin to VAT.
• Reintroduction of export duties on bauxite and gold, and increased excise on alcohol.

“These measures aim to simplify the tax system, promote compliance, and ensure fairness,” Mr Sogavare remarked.

Minister Sogavare stressed the importance of fiscal discipline, vowing to enhance monitoring and efficiency in public spending. “We must prioritize every dollar to deliver value for our people,” he stated, highlighting measures to reduce leakages and improve procurement practices.

According to the government, the 2025 Budget is not just about numbers—it is about restoring hope and ensuring inclusivity. 

“Together, we can overcome challenges and build the Solomon Islands we all want,” Sogavare declared in closing, urging collective action from all sectors of society.