Sabah finance minister Masidi Manjun has hit out at Warisan president Shafie Apdal for claiming that his administration in 2019 had settled a RM1 billion debt left by the previous government.
Masidi said Shafie’s claim was aimed at showing that his administration was good at managing government finances but the facts speak for themselves.
Masidi, who is also Gabungan Rakyat Sabah secretary-general, explained that the federal bond in question was issued in December 2014 during the Barisan Nasional-led state administration.
He said one of the conditions imposed by the central bank for the issuance of the bond was that the state government must set up a dedicated sinking fund to ensure full repayment of the debt upon maturity.
“This was a safeguard to prevent the repayment from becoming a huge financial burden on the state’s finances,” Masidi said in a statement.
He added that under the terms of the bond, the state government needed to place RM200 million into the sinking fund each year for five years, until 2019.
By the time the Warisan administration took office in 2018, Masidi said most of the funds needed for repayment had already been secured.
In fact, in the following year, RM1 billion was already in the sinking fund, which allowed the state government to make a one-off bullet payment being full settlement of the bond debt.
“Therefore, it is not accurate to suggest that this repayment was the result of any special action by the Warisan government.
“The payment was the outcome of prudent financial planning put in place by the previous administration years before the bond matured,” Masidi said.
Yesterday, Shafie defended his promise to write off outstanding student loans for Sabahans if his party forms the government after the upcoming state election.
Responding to a youth NGO’s claim that the pledge was mere rhetoric, the former Sabah chief minister said his promise was not a political gimmick and that it was financially doable.
“In 2019, I paid RM1 billion of debts left by BN,” he was quoted as saying, referring to the time the state government he led settled the federal government’s bond.
“If I can pay BN‘s debts, why can’t we pay the debts of our students?” Shafie had said.
