Kota Kinabalu: Sabah’s development challenges stem from financial constraints rather than lack of political will, State Finance Minister Datuk Seri Masidi Manjun said.
He said the state faced mounting pressure to address basic needs such as water, electricity, and infrastructure, but that spending decisions had to be aligned with available resources to avoid financial instability.
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“We know the real needs, both short-term and long term, but the scale of those needs is very large, and we are still far behind,” he said.
He said the state had prioritised allocations to ministries directly responsible for basic services, with the Ministry of Works and Utilities among those receiving the highest funding due to its role in addressing rural water supply, electricity access, and road infrastructure.
Masidi said federal electricity subsidies remained a critical lifeline, amounting to RM700mil this year and projected at RM880mil in 2026, channelled to Sabah Electricity Sdn Bhd based on actual claims.
He added that federal funding commitments for electricity infrastructure in Sabah totalled RM3.54 billion from 2024 to 2030, including rural electrification grants and special projects under the Energy Transition and Water Transformation Ministry.
Despite these allocations, Masidi said, the state had to manage expectations realistically, noting that Sabah’s annual revenue of about RM6.5 billion remained significantly lower than Sarawak’s, which allowed its neighbour to sustain a higher development spending ratio.
“We have to measure our spending according to our capacity,” he said, stressing that financial discipline was necessary to prevent long-term fiscal stress.
Masidi said Sabah was working to gradually narrow the gap between operating and development expenditure, but acknowledged that progress depended on strengthening revenue streams and reserves.
On infrastructure, he said the Federal Government had provided RM728mil in direct grants for road maintenance in Sabah, while RM1.027 billion had been allocated for upgrading facilities at the Sepanggar Container Port, which is expected to be completed next year.
He said Sabah’s project delivery performance had improved, with 324 federally funded development projects completed under Rolling Plan 5 of the 12th Malaysia Plan, placing the state second nationwide after Sarawak in terms of completed projects.
Masidi said sustained improvements in governance and financial management were essential to ensure future growth, adding that stronger reserves would enhance Sabah’s autonomy and resilience.
“We want to strengthen our financial foundation so that development can be accelerated in a sustainable way,” he said.
