Prime Minister Sitiveni Rabuka says as of today, Fiji’s national debt is around $10.3 billion which is 80 percent of Gross Domestic Product and the nation’s debt is a major challenge in funding of urgently needed expenditures.
Debt level at end of July stood at $9.75 billion, equivalent to 80 percent of GDP.
In his New Year’s message, Rabuka says he is fully aware that some sections of the population continue to raise concern with the dilapidated state of key infrastructure and are saying that the coalition government is not doing enough to address this issue.
He says as a “rule of thumb” for a small country like Fiji, the debt ratio should be around 40 to 45 percent of GDP and the current ratio of 80 percent of GDP is not acceptable and unsustainable.
Rabuka says however, Fiji has to “bite the bullet” and make the necessary adjustments so that debt obligations can be met.
He says this simply means that in the 2023/2024 financial year budget,$1.05 billion has been allocated to service debt commitment.
Rabuka says this is 20 percent of the total budget of $4.3 billion for the 2023/2024 financial year.
He says the $1.05 billion allocation for debt servicing will cover interest payment of $500 million and the balance of $500 million is for refinancing existing debt.
Rabuka says this implies that Fiji’s capacity to finance other urgent expenditure is very much limited.
He says this entailed cutting back on wasteful spending, improving efficiencies and growing revenue and they had to create public and investor confidence, lift the economy, increase employment, and improve infrastructure and government services.
Rabuka further says that based on information from the FNPF, wages and salaries for permanent and full-time employees increased between 10 to 12 percent compared to 2019.
He says this is a reflection of the marketplace at work, however, the government is not just relying on market forces to determine wages and salaries.
He adds as promised in the budget they will review minimum wages.
Rabuka says expect some decisions in the next few months.
