The government is backing $1.6 billion in debt incurred by state-owned enterprises, in addition to the $10.309 billion already recorded in its financial statements. The Ministry of Finance, Strategic Planning, National Development, and Statistics recently shared provisional financial results for the fiscal year ending in July 2024.
According to the ministry, this figure reflects a 6.7 percent decrease compared to the same timeframe last year, primarily due to the repayment of guaranteed debts. For the 2023-2024 financial year, Parliament approved a guarantee for Fiji Development Bank (FDB) borrowings amounting to $130 million for the period from March 1, 2024, to February 28, 2025, along with a renewal of the $150 million government guarantee for the Housing Authority’s borrowings for an additional five years, running from July 1, 2024, to June 30, 2029.
The ministry noted that a three-tier risk assessment approach was applied to evaluate the risks faced by the government. This assessment considered the latest three years of historical performance, interim financial statements and cash flow projections, as well as general industry evaluations and economic conditions.
Among the guaranteed entities, the Fiji Sugar Corporation Limited (FSCL) has been identified as a high-risk entity due to its current insolvency. It heavily depends on government support to maintain operations. The Cabinet’s recent approval of a debt write-off for FSCL and PAFCO could improve their balance sheets, although it would not restore them to financial viability in the medium term.
The government’s debt is predominantly domestic, with 63 percent of it borrowed locally. Out of the total debt, $6.5 billion is domestic, while $3.7 billion is owed to external sources.