The government is set to divest shares in at least three State-Owned Enterprises (SOEs) to iTaukei investors and resource owners. This initiative is a key component of the government’s policy objectives outlined in the Fiji National Development Plan (NDP) for the period of 2025-2029, as well as in Vision 2050.
The NDP serves as the Coalition Government’s strategic framework for national development over the medium term, aiming to shape Fiji’s future over the next 25 years. It highlights the need for increased private sector involvement to stimulate economic growth, noting that SOEs have been identified as underperforming and requiring restructuring.
The divestment strategy includes Energy Fiji Ltd, Pacific Fishing Company (PAFCO), and Airports Fiji Ltd (AFL), which will be offered to iTaukei investors and resource owners. The NDP points out that the presence of SOEs has hindered private sector investment in industries such as cattle farming, fish processing, and sugar milling. This situation has often resulted in a cumbersome regulatory environment and high operational costs deterring private participation.
The report indicates that the government’s extensive involvement in various economic sectors through SOEs has the potential to limit private investment opportunities. By promoting and facilitating private sector engagement across all economic sectors and refining the government’s role in these activities, there is an opportunity to foster new avenues for investment, increase operational efficiency, and drive Fiji’s economic growth forward.
The NDP emphasizes that the total asset base of government-held SOEs has seen considerable growth, rising from $8.4 billion in 2019 to over $9 billion by 2022. The largest assets are found in the infrastructure and transport sectors, including Airports Fiji Limited, Energy Fiji Limited, Fiji Ports Corporation Limited, and Fiji Airways. However, despite this substantial asset base, the contribution of the 19 active SOEs to Fiji’s GDP was a mere 3.7 percent from 2010 to 2020, significantly lower than the estimated 16-20 percent of gross fixed investment attributed to SOEs in the economy.
Currently, the government operates a total of 25 SOEs.