Parliament has approved the government guarantee for the Fiji Development Bank borrowings for a sum of $150 million from March 1 2023 to February 28 2024.

This is through the issuance of short and long-term bonds, promissory notes, and any Reserve Bank of Fiji financing facility and other short-term borrowings.

The Deputy Prime Minister and Minister for Finance, Professor Biman Prasad moved the motion, saying the 2023 government guarantee request from the bank will allow lending to essential sectors of the economy.

“Is going to ensure that the Bank lends to the resource-based sectors that will assist in the development of the agricultural sector and assists the development of the Fijian economy in the long run.”

[File Photo]

Professor Prasad says accessing the government guarantee by the bank will increase its total exposure.

“As at 31 December 2022, the total Government Guaranteed Debt stood at FJ$1.1 billion or 9.5% of Gross Domestic Product (GDP). Accessing the FJ$150 million guarantee by the Bank will increase the total Government Guarantee exposure to FJ$1.3 billion or 10.7% of GDP.”

Professor Prasad says the outstanding guaranteed borrowings has been declining over the years.

He says the total approved government guarantee for FDB borrowings for the past six years has accumulated to a sum of $1.1 billion.

Professor Prasad says as of December 31 2022, only 28% which is $296.97 million of this accumulated approved guarantee is outstanding.

[File Photo]

He says the Debt Management Unit in the Ministry of Finance, Strategic Development, National Development and Statistics is closely monitoring to ensure that associated fiscal risks are mitigated.

According to the Deputy Prime Minister and Minister for Finance, FDB recorded a consolidated profit of $1.79 million in the 2022 financial year.

The Minister says this is an increase by 78 percent when compared to the same period in the previous year, attributed to the decline in interest expenses and allowances for interest and fees.