Prepare your cheque books if you’re looking to invest in government securities. The Fiji Government has unveiled its borrowing calendar and annual borrowing plan (ABP) for the fiscal year 2024-2025, starting the issuance of government papers this month, providing investors with more options.
According to the 2024-2025 National Budget, the government aims to borrow over $900 million during this financial year through a combination of local and international loans.
The specifics of the government’s borrowing plans, which are in line with its medium-term debt management strategy (MTDS) for the years ending in 2026, can now be found on the Reserve Bank of Fiji’s website.
The government has confirmed that it will continue to balance its borrowing by utilizing both domestic and external currency sources while managing its debt composition to minimize market risks.
The Reserve Bank of Fiji (RBF), which oversees government debt, reports that the total financing requirement is estimated at $984.6 million. This includes an expectation of raising $298.3 million from external sources and $686.3 million from domestic sources.
The government may adjust its overseas borrowing limit while reducing its domestic borrowing limit and vice versa, allowing for a comprehensive use of available financing sources within the limits set by Parliament. Additionally, the government will seek external borrowing opportunities under favorable terms.
Domestic debt will be issued through Fiji Infrastructure Bonds (FIB) and Viti Bonds, with a strategy to gradually shift the debt maturity profile. This involves reducing short-term treasury bills and moderating the issuance of two, three, five, and ten-year bonds, while planning to raise $516.3 million predominantly through long-term 15 and 20-year bonds.
The Viti Bond, with a total offering of $10 million, is available for investment until July 11, 2025. External financing for Fiji’s debt will come from loans provided by traditional multilateral and bilateral partners.
Forecasts indicate that new external financing will total $231.6 million, comprised of approximately $158.6 million from multilateral sources and $73.0 million from bilateral sources.
Out of the anticipated $984.6 million raised, $635.5 million will be allocated to finance the budget deficit, while $349.1 million is designated for debt repayment.