David Anderson, Bank South Pacific’s Country Manager in the Solomon Islands, shares an overview of the country’s economy with Business Advantage PNG.
‘The Solomon Islands is a very liquid economy at the moment,’ notes David Anderson, Bank South Pacific’s Country Manager in the Solomon Islands. ‘There is plenty of money around for people to do things.
‘Officially, there was a 3.2 per cent rise in GDP in 2016 and that has been pretty consistent for the last couple of years.
‘The forecast for 2017 is about 3.3 per cent. It’s been good, steady growth. BSP is looking to grow here. We have confidence in the country.’
Anderson says the Solomon Islands relies heavily on logging, which accounts for 60–70 per cent of its exports. But he believes the government has to plan for the logging to eventually cease.
‘In 2013, when I came back, people were still saying another five years. When will it end? I don’t know.’
‘In 1996, when I was working in the country previously for Westpac, the general expectation was for logging to end in approximately five years.
‘In 2013, when I came back, people were still saying another five years. When will it end? I don’t know. However, contacts in the logging industry expect it to last longer than five years.’
Anderson comments that there may be plenty of trees still left in the Solomon Islands but the environmental pressures grow stronger every year.
‘There is a lot of economic growth in [the] Solomon Islands beyond the forests, however, especially in Honiara,’ he says.
‘The economy in Honiara is fairly strong. There is a lot of construction going on. Some of it is coming from funds from the Chinese and most of the Chinese are investing into property.
‘The return on it here can be very good; in some cases, between 8 and 12 per cent. And there’s not much empty commercial or industrial property in Honiara.
‘A lot of the industrial area of Honiara is just about built out.’
‘If you drive from Henderson Airport into Honiara, there is hardly a vacant commercial space anywhere. There is a lot of building going on.’
Anderson says a lot of the industrial land in Honiara is ‘just about built out’. As a consequence, people are looking for more space to build.
‘As soon as a property does come up it is quickly leased. The quality of buildings is certainly a lot better [than when I was last living here].’
‘Tourism has a big future for the Solomon Islands. Over recent years it’s certainly improved.’
Such interest in property bodes well for the post-logging future, says Anderson.
‘Tourism has a big future for the Solomon Islands. Over recent years, it’s certainly improved.
‘The Western Province is the jewel of the country. Unfortunately, a lot of people in nearby countries, including New Zealand and Australia, don’t know that.
‘The Solomon Islands just has to keep moving forward [on tourism] and come to an arrangement with people in New Zealand, Australia and elsewhere to try and sell the country better.’
Bank South Pacific purchased the National Bank of the Solomon Islands 10 years ago this year.
Anderson says BSP is now the largest bank in the Solomon Islands. The bank has eight branches around the country—four in Honiara and four in the provinces.
With 260 staff, it has a loan book of around S$930 million (Solomon Dollars) and has over S$2billion in deposits.