NEWS

 80pc Increase In Debt Level Due To COVID-19

He said the current public ex­penditure of $3.7 billion needed to be maintained as $1.1 billion of that amount was used for Civ­il servants’ wages with the rest being for operational and capi­tal expenditures respectively.
10 Mar 2022 11:39
 80pc Increase In Debt Level Due To COVID-19

The COVID-19 pandemic has caused an 80 percent increase in the Fijian Gov­ernment’s debt level due to the economy shrinking resulting from the Government borrowing more from overseas during the to maintain our foreign reserves

The Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum said this dur­ing the face to face consulta­tions for the revised 2021-2022 National Budget at the Nadi Civic centre on March 8.

“So of course with the pan­demic, we did have to go out and borrow because our revenue is gone, 50 per cent is gone and we still have to pay social wel­fare, we still have to pay for free education, everybody still com­plains about potholes, every­body wants water,” he said.

 

“So it’s a balancing act, we still do TELS, we still do Toppers, all those things need to be catered for so we went and actually bor­rowed money and our deficit of course increased .”

 

Public expenditure

He said the current public ex­penditure of $3.7 billion needed to be maintained as $1.1 billion of that amount was used for Civ­il servants’ wages with the rest being for operational and capi­tal expenditures respectively.

“As we’ve said, the earlier al­ternative of not borrowing and supporting the economy during the last 20 months would have been catastrophic.”

“Can you im­agine if we did not pump in that much money, can you imagine if we did not give FNPF (Fiji Na­tional Provident Fund) support, where would those people have gone,” he said.

 

“If we did not pump enough money into the economy, our dollar ultimately would have been devalued and that’s the last thing we want for a coun­try that’s so heavily dependent on imports, we don’t want to de­value our dollar at a time when the economy is going down, it causes things to become even more expensive.”

 

Focus

He said the Fijian Government had focussed its borrowing more towards connecting peo­ple to electricity, roads, bridges, jetties and nursing stations but it was critical for the gov­ernment to see whether debts inherited from previous gov­ernments were for operational costs or other expenses.

“ As we know the collapse of the NBF, the National Bank of Fiji when Rabuka was Prime Minister, the Fijian govern­ment has had to go out and bor­row more money.”

“It’s the failure of that bank that has resulted in what we call intergenerational debt,” he said.

 

Feedback: salote.qalubau@fijisun.com.fj



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