Parliament has approved a motion to raise the Government guarantee limit for Fiji Sugar Corporation (FSC) borrowings from $95 million, covering the period from August 1, 2022, to May 31, 2028, to $200 million. Additionally, the FSC will not be required to pay the guarantee fee.
While presenting the motion, Finance Minister Professor Biman Prasad highlighted that the Government was already exposed to $293 million in guaranteed debts, both domestically and internationally, due to FSC’s financial status. He noted that in the case of a default, which is a common occurrence associated with government guarantees, the Government would be responsible for the FSC’s guaranteed borrowings.
Prasad emphasized the importance of collaborating with FSC to manage any fiscal risks and ensuring timely communication about such risks to enable the Government to implement effective mitigation strategies.
Opposition members also voiced their support for the motion but raised concerns. MP Semi Koroilavesau pointed out that significant areas of land, once used for sugarcane farming, now remain unused. He stressed that while the sugar industry’s survival is vital for Fiji’s economy, simply increasing funding for FSC would not solve underlying issues. He called for accountability from FSC’s management and a structured plan for operational improvements.
Moreover, MP Viam Pillay urged the Government to investigate recurring mill breakdowns that negatively impact farmers and transporters. He questioned the value of guaranteeing the loan if persistent mill issues remain unaddressed, as these breakdowns delay harvesting and cause frustration and financial loss for farmers and lorry drivers. Pillay insisted that the ministry needed to take action regarding mill reliability and recommended the establishment of a joint Parliamentary Select Committee to thoroughly assess the challenges facing the sugar industry.