The government is set to sell shares in at least three State-Owned Enterprises (SOEs) to iTaukei investors and resource owners. This initiative is part of the government’s objectives outlined in the Fiji National Development Plan (NDP) for 2025-2029 and the Vision 2050 framework.
This NDP serves as a strategic plan for the Coalition Government as it aims to build the nation over the medium term, with aspirations for Fiji’s future in the next 25 years. The NDP highlights the need for increased private sector involvement to drive economic growth, noting that SOEs have been underperforming and require restructuring.
Included in this strategy is the divestment of Energy Fiji Ltd, Pacific Fishing Company (PAFCO), and Airports Fiji Ltd (AFL) to iTaukei investors and resource owners. The NDP points out that private sector investments have been stifled by the dominance of SOEs, particularly in industries such as cattle farming, fish processing, and sugar milling, where private ownership could lead to more efficient operations.
Challenges such as stringent regulations, bureaucratic obstacles, and high operational costs have also constrained private sector involvement. The government’s extensive engagement in various economic sectors through SOEs can sometimes inhibit private investment.
The government aims to encourage private sector investment throughout the economy while redefining its role through SOEs. This realignment is expected to create opportunities for private investment, enhance efficiency, and boost productivity, ultimately driving Fiji’s economic growth.
According to the NDP, the total asset value of the government’s SOE portfolio has significantly increased, reaching over $9 billion in 2022, up from $8.4 billion in 2019. The infrastructure and transport sectors, including Airports Fiji Limited, Energy Fiji Limited, Fiji Ports Corporation Limited, and Fiji Airways, hold the largest asset share.
However, the contribution of the 19 active SOEs to the Gross Domestic Product (GDP) was a mere 3.7 percent from 2010 to 2020, which is considerably lower than the estimated gross fixed investment of 16-20 percent in the economy controlled by SOEs. The government currently oversees a total of 25 SOEs.