The government has guaranteed $1.6 billion in debt for state-owned enterprises, in addition to the existing $10.309 billion of debt recorded on its books. This information was released by the Ministry of Finance, Strategic Planning, National Development, and Statistics in their provisional financial results for the fiscal year ending in July 2024.
The ministry noted that this figure represents a decline of 6.7 percent compared to the same period last year, which is attributed to the repayment of guaranteed debts. During the 2023-2024 financial year, Parliament approved a guarantee of $130 million for Fiji Development Bank’s borrowings for the period from March 1, 2024, to February 28, 2025, as well as a renewal of an existing $150 million guarantee for the Housing Authority’s borrowings for an additional five years from July 1, 2024, to June 30, 2029.
The ministry explained that a three-tier risk assessment approach was implemented to evaluate the risks that the government faces. This assessment considered the latest three-year historical performance, interim financial statements and cash flow projections, and general industry evaluations alongside economic conditions.
Additionally, the Fiji Sugar Corporation Limited (FSCL) was identified as a high-risk entity among the guaranteed businesses due to its current insolvency, which necessitates ongoing financial support from the government to maintain operations. The potential debt write-off approved by the Cabinet for FSCL and PAFCO could enhance their balance sheets, but will not stabilize their financial positions in the medium term.
The government’s overall debt is predominantly domestically sourced, with 63 percent being borrowed locally. Out of the total debt, $6.5 billion is domestic and $3.7 billion is external.