The government has provided guarantees for $1.6 billion in debt held by state-owned enterprises, in addition to the $10.309 billion already recorded in its financial statements. This information comes from the Ministry of Finance, Strategic Planning, National Development, and Statistics, which recently published the provisional financial results for the fiscal year ending in July 2024.
According to the ministry, this figure reflects a 6.7 percent decrease from the same period last year, largely due to repayments of guaranteed debts. For the 2023-2024 financial year, Parliament sanctioned a guarantee amounting to $130 million for Fiji Development Bank (FDB) borrowings covering the period from March 1, 2024, to February 28, 2025. Additionally, the renewal of a government guarantee for $150 million for Housing Authority borrowings was approved for another five years, from July 1, 2024, to June 30, 2029.
The ministry noted that a three-tier risk assessment strategy was employed to evaluate the risks faced by the government. This assessment considered three main factors: (i) the latest three years of historical performance; (ii) interim financial reports and cash flow forecasts; and (iii) overall industry evaluations, which include economic conditions.
Fiji Sugar Corporation Limited (FSCL) has been identified as a high-risk entity among those with guaranteed debts, primarily due to its current insolvent status. The ministry highlighted that FSCL continues to depend significantly on government financial assistance to maintain operational continuity. Furthermore, while cabinet approval of a government debt write-off for FSCL and PAFCO could enhance the balance sheets of these two entities, it is unlikely to restore their financial viability in the medium term.
The government’s debt profile is largely domestically sourced, with 63 percent of the total borrowed from local sources. Specifically, out of the total debt, $6.5 billion is domestic while $3.7 billion constitutes external debt.