Billions in debt: Economists question Government spending priorities

Fiji has borrowed billions while cutting investment in infrastructure, expanded the largest Cabinet in the country’s history, and produced a national development plan with no measurable targets.

This was highlighted by Dialogue Fiji executive director Nilesh Lal and University of the South Pacific Senior Economist Mahendra Reddy during the State of the Fijian Economy Dialogue 2026 yesterday in Suva.

Mr Lal said Government revenue had increased by $1.19 billion since 2022 – largely through painful tax hikes including a 66.7 per cent increase in VAT (Value Added Tax) – yet debt grew by $1.95 billion over the same recovery period.

“If revenues have increased by $1.19 billion, why did debt grow by $1.95 billion during a supposed recovery period? Where did the money go?” he asked.

Mr Lal said the civil service had bloated and salary bill substantially increased.

“Very controversially, we have the largest Cabinet in Fiji’s history – and all this has happened ironically at a time when people have been asked to tighten their belts,” he said.

He said the operating surplus had collapsed by 95 per cent in one year to just $28 million.

Capital expenditure now accounts for only 19 per cent of the total budget, down from 38 per cent a decade ago.

Mr Reddy said Government efficiency had badly deteriorated. Ten years ago, every dollar of operating expenditure delivered 64 cents of capital investment.

Today, it delivers just 24 cents. “Something is seriously wrong with Government efficiency,” he said. Mr Reddy said Fiji’s 2025-29 National Development Plan had no baseline targets and was never tagged with cost. “Are we serious about the development plan? Or was it done just for the sake of it?” he asked.