Fiji’s economy will only grow by about two to three percent in the next two to three years because the tourism industry which is currently driving the economy will reach maximum capacity of about 1 million visitors by next year.
This has been highlighted by ANZ Bank economist Doctor Kishti Sen who says he does not think Fiji has too much capacity to absorb more tourists during the peak seasons and hotels in the next 2 years are booked out.
He says the next big up turn tourism will provide for the economy will come when we add more stock or room capacity.
Dr. Sen says Fiji is short by about 5,000 hotel rooms and the good news is they have got an investment pipeline for 4,500 rooms but these projects have not really gotten off the ground yet.
He says these projects need to be happening sooner because it will take about three to four years for it to complete and once they are completed, more people can be added during peak and off seasons and tourism will then come back and become another primary driver for the economy.
Dr. Sen says for the construction industry, approvals are given but they are not commencing because of lack of labour and it will help the construction and the tourism industry if the government can bring in people quicker.
He says labour needs to be imported to immediately fill the workforce gap because vocational college training can take up to two years.
On moving away from the reliability on tourism, Sen says the government is looking at whether Fiji can manufacture medicinal cannabis and export it and adds the potential is there.
The economist says Victoria in Australia produces 73,000 litres of cannabis oil, 24,000 kilogrammes of dried leaf and flowers per year and if Fiji produces just 50 percent of what Victoria does then earnings from those exports is going to be more than sugar and gold put together.
He says if Fiji can match 100 percent of what Victoria produces, revenue will be $454 million which is more than gold, sugar and water exports put together.
If Fiji matches 100% of Victoria’s medicinal cannabis production, revenue will be $454M which is more than gold, sugar and water exports put together.#fiji #fypシ゚viralシ2023 #economy— fijivillage (@fijivillage) November 9, 2023
Full Story: https://t.co/ZMZr7TSySN pic.twitter.com/CPJGUc4W8j
Dr. Sen further says Fiji can do a lot of downstream processing where value can be added to agriculture products such as ginger, turmeric, tuna and timber.
He says to have these industries set up, you need supporting infrastructure such as electricity, water and roads and he believes this is what lets Fiji down.
ANZ Bank Country Head, Rabih Yazbek says Fiji cannot rely on two to three percent of GDP growth every year and it needs to be growing more by about five to six percent and unless something changes, Fiji is not going to get to that in the current environment.
Apart from major labour shortage, Yazbek says another major issue is power where a lot of projects are being held up because of access of power and access to transformers.
Yazbek adds Energy Fiji Limited requires capital expenditure to expand the grid.
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