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Sabah’s economy remains upbeat
Published on: Sunday, April 07, 2024
By: Hayati Dzulkifli
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Chief Minister Datuk Seri Hajiji Haji Noor with Masidi, State Secretary Datuk Seri Safar Untong, SMJ Sdn Bhd CEO Dr Dionysia Kibat, AmInvestment Bank Bhd CEO Tracy Chen, AmBank Managing Director of Business Banking Christopher Yap, and AmInvestment Bank head of Debt Markets Yeoh Teik Leng during the pricing of its RM900 million Islamic medium-term notes, issued out of the company’s multi-currency sukuk wakalah programme of up to RM10 billion in nominal value.
State Finance Minister Datuk Seri Masidi Manjun said the State government expects better recovery since there is a slight increase of growth forecast of four to five per cent in 2022 and 2023.
He said there are four sectors in Sabah that contribute to the growth forecast, namely, the services, oil and gas, agriculture and manufacturing sectors.
“Among the measures needed to be taken to ensure forecast growth is achieved are the State government receiving sufficient development allocation from the Federal government, particularly for basic infrastructure, investment-friendly policies, continuous human capital development including reskilling, and upskilling, among others.
“Nonetheless, he said such positive progress would depend on the national (ie political uncertainties) and world (ie Ukraine-Russia, US) economic volatility and geopolitical risks,” he told Daily Express for its Ministry Focus on State Ministry of Finance (MOF).
Masidi said the State Government would continue its right to demand 40 per cent entitlement of net revenue of the Federal Government in Sabah for the State as enshrined in the Malaysia Agreement 1963 (MA63).
On Nov 29 last year, Bernama reported that Federal Government together with Sabah and Sarawak state governments reached an agreement to review the amount of special grants under Article 112D of the Federal Constitution, effective from 20233 as an interim solution and on the process of finalising the special grant review formula for the long term.
It also reported that the interim solution was decided in the Meeting of the Action Council for the Implementation of the MA63 (MTP-MA63) which took place on Jan 20, 2023 and was presented in the 2024 National Budget.
This interim rate was an increase to the RM16 million per year for Sarawak since 1969 and RM125.6 million for Sabah for year 2022 through an interim review that was implemented for Sabah in 2022.
Prime Minister was also quoted as saying that the payment of the 2023 special grants at a new rate of RM300 million to Sabah and Sarawak State governments has been completed.
Following the above, Masidi said there has been positive development for Sabah after stagnant and without any increase for the past 48 years (RM 26.7 million annually).
(NEW SPECIAL GRANT (INTERIM PAYMENT) AMOUNT) Based on the table, there was an increase of RM174.4 million for the interim payment of RM125.6 million in 2022 to RM300 in 2023 and a surge of RM6 million added to the interim payment for 2024, 2025, 2026 and 2027.
Jawatankuasa Teknikal Majlis Tindakan Pelaksanaan Perjanjian Malaysia 1963 (MTPMA63) in its meeting held on July 18, 2023 agreed that negotiations between Federal and State Government to finalise within a year.
Another aspect that contributed to the State’s economy, Masidi said, is the Sales Tax for oil and gas products which is accounted for as Tax Revenue under the Consolidated Revenue Account.
He said this is in accordance with the Financial Procedure Act 1957 and Treasury Instructions whereby all collected revenue must be deposited into the Consolidated Revenue Account.
“Expenditure through the Consolidated Revenue Account is allocated annually through the approved Annual Budget by the State Legislative Assembly.
“Hence, the utilisation of revenue from State sales tax on petroleum products cannot be specified. It has contributed to the holistic development of the state,” he said.
On latest budget allocation for MOF, Masidi said his Ministry has been allocated with RM20 million this year excluding pooled allocation meant for administrative expenditure.
For example, he said contribution to development fund and other programs totalling about RM2.436 billion under MOF preview.
As of January this year, he said the total expenditure that has been spent was RM1.384 million while RM285,000 as the given sub-provision.
“State Works Ministry (KKR) got the most allocation of RM1.7 billion mostly to address road, water and sewerage issues.
“Followed by the Sri Kinabalu Istana, Sabah Public Service Commission (PSC), State Legislative Assembly and State Attorney General’s Department were given less overall about RM40 million.
SMJ Energy Sdn Bhd Chief Executive Officer Dr Dionysia Kibat (third right) presenting a RM50 million maiden dividend to Masidi (fourth left) while others look on.
Masidi launching Sabah Credit Corporation’s Yono app in November 2023.
“This is due to their nature which is mostly or purely more on administrative,” Masidi said.
On the Ministry’s Key Performance Index (KPI), he said is to spend lesser than the year before and to make more than before.
Of 13 Sabah Maju Jaya (SMJ) initiatives, he said 10 achieved its KPI of 100 per cent as of Dec 31, last year, except for an initiative of targeting collection of State’s revenue not more than RM3.8 billion in 2022 with 100 per cent KPI as of November last year.
Among other initiatives that reached its KPI, he said, were the annual dividend payment of RM100 million by statutory bodies / government-linked companies (GLCs) for the period of 2022-2025, ensuring loan repayments of RM15 million every year until 2025 by the statutory bodies / GLCs, develop and using Sabah Sales Tax System (e-CJN), completing a working paper on restructuring the MOF based on a format set by the Sabah Public Service Department (JPAN), providing an app via online to apply Pukonsa certificate for contractors’ construction works, supplying and giving service as well as registered consultants in Sabah as well as developing and drafting Anti-Corruption Plan.
The other three initiatives under SMJ which did not reach its KPI, he said were developing and using E-Emoluments Budgeting System (94pc), developing and using e-vehicle - System Development and Trail Run (90pc), and upgrading e-Pukonsa through the use of Digital Payment Gateway and Identity Certificate and Digital Signature System (95pc).
Nonetheless, he said his Ministry implemented all tasks given to them although the challenge they faced is the lack of human resources, which did not prevent the Ministry from achieving the set objectives.
In order to overcome the challenge of lack of human resources, he said his Ministry applied for restructuring to the State Public Service Department.
“Presently, MOF Sabah has 155 staff and to address retirement of senior officers, the respective Head of Service will manage the placement of officers in the Ministry.
“Also, filling up the vacancies is subject to financial ability,” he said.
As for number of women officers and staff in MOF, Masidi said the total percentage of female staff in his Ministry is 66.45 per cent which have fulfilled the 30 per cent of women participation in decision-making posts.
“The Head of Department of the Ministry is headed by a male officer and assisted by two female officers.
“Of the six divisions in this Ministry, five divisions are headed by female officers and one division is headed by male officers,” he said.
According to him, there is no ‘Little Napoleons’ in the Ministry and no staff had been imposed with disciplinary actions.
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