GAO: American Samoa economy stable, but still faces risks

 By Jayvee Vallejera

While American Samoa’s economy is relatively stable, it remains at risk because it heavily relies on tuna canning as its only industry and economic diversification efforts have yet to bear fruit, according to the Government Accountability Office.

In a recent report, GAO also noted that both the American Samoan government and StarKist Samoa rely on the federal tax credit, adding to the shaky posture of the economy, mostly because of the temporary nature of that tax credit.

StarKist officials also cited challenges with meeting the territory’s minimum wage increases.

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Climate change also plays up American Samoa’s vulnerabilities. Citing a U.S. Geological Survey report, GAO said the territory is vulnerable to sea-level rise and that its islands are actually sinking because of earthquakes in 2009.

“These events can directly affect the economy by, for example, damaging property and infrastructure and displacing individuals,” GAO said.

Another source of economic uncertainty is pension liabilities. The good thing is that the dollar figure has already gone down, from almost $262 million in fiscal year 2021 to just over $168 million as of Sept. 30, 2023.

“American Samoa’s net pension liabilities did decrease from fiscal year 2021 to 2023 to just over $168 million, which is a drop of 32 percent from fiscal year 2022 and a decrease of 36 percent from fiscal year 2021,” GAO said. 

American Samoa’s GDP is relatively stable, totaling $840.8 million in fiscal year 2022. When adjusted for inflation, this represents economic growth of around 1 percent from the previous year, GAO said.

The territory’s real GDP also increased an average of about 1 percent annually in fiscal years 2018 through 2022, GAO said.

In fiscal year 2023, American Samoa’s total revenue was about $855.7 million, GAO said, which is an increase of about 43 percent from fiscal year 2021.

That same fiscal year, total expenses were at $762 million, a 30 percent increase from fiscal year 2021.

The credit rating agency Moody has maintained its stable credit outlook and Ba3 credit rating for the government of American Samoa. That means bonds issued by American Samoa are considered non-investment grade and subject to substantial credit risk.

According to Moody’s November 2024 report, the rating takes into consideration the territory’s small and volatile economy, the concentration of employment in government and tuna packing, very low resident income levels, above-average long-term liabilities, and risks associated with operating a government-owned charter bank.

Based on GAO’s analysis of American Samoa’s fiscal year 2023 audited financial statements, total public debt outstanding was $145.4 million, a 10 percent decrease from fiscal year 2021.

The central government’s debt is at $136.3 million, or 94 percent of total public debt. The Power Authority owes the rest, $1.6 million (1 percent) and the Telecommunications Authority, $7.5 million (5 percent).

In June 2020, the government announced its investment in the call center industry. It has identified the site and the company that will construct the building, but as of March 2025, the plan is still in the design phase.

The high cost of broadband internet and electricity is also a barrier for businesses, said GAO, citing American Samoa officials.

Although American Samoa’s remote location reduces the viability of developing a robust tourism industry, its officials are in talks with airlines to increase the number of flights to the territory, GAO said. An increasing number of cruise ships are also reportedly traveling to the territory.

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