State borrowings in 2010 run into a staggering $740 million – the highest ever in Fiji’s history.
Of the total, domestic loans (from FNPF) amount to $498 million, while overseas loans add up to $242 million.
The provision for debt repayments in the 2011 Budget stands at $519 million. The gross deficit for the year is $735 million.
Overseas loans were sourced as follows:
Asian Development Bank – Water & Sewerage – $95m
Exim Bank of China – Low Cost Housing – $70m
Exim Bank of Malaysia – Road Upgrading – $77m
The debt repayment cost of $519 million means that the taxpayer is forking out $1.42million per day to repay the State’s massive debts.
The escalation of debt since 2008 is summarised below:
Source: Budget Estimates 2008-2011
Budgeted Borrowing for 2011
The 2011 Budget Estimates provide for further borrowing of $450 million. Of this $250m is to be raised locally and $200m is to be sourced from the Exim Bank of China. The Chinese loan is stated to be for “Roads Improvement”.
Both the Chinese and Malaysian loan projects are contracted out, under special arrangements, to construction companies from those countries.
The IMF has warned the State that its debt level of 56% of GDP is high by regional standards. The situation is aggravated by the fact that when the State’s contingent liabilities (loan guarantees to statutory bodies and corporations) are included the debt level rises to a staggering 73% of the GDP.
Mahendra P. Chaudhry