Government intends to borrow $1.1 billion in the 2023-2024 financial year, reveals the Annual Borrowing Plan (ABP) released by the Ministry of Finance, Strategic Planning, National Development and Statistics.
The ABP states on July 13, 2023, Parliament approved the Appropriation Act which entails Government’s financing requirements amounting to $1.1 billion for the 2023-2024 financial year that comprises funding necessary to cover the estimated net deficit of $639.1 million and estimated debt redemptions of $516.2 million to refinance maturing Government debt securities and loans.
“Government will continue to pursue a mix of domestic and external currency borrowing and ensure that the debt composition is well managed against market risks,” states the ABP document.
“The total financing need is estimated at $1,155.4 million of which $390.2 million is expected to be raised from external sources while the remaining $765.2 million is expected to be raised from domestic market. “Government may increase its overseas borrowing limit simultaneously reducing its domestic limit and vice versa.
“This provides flexibility and ensures that Government can fully utilise all financing sources available while remaining within the borrowing limit approved by Parliament.
“The ABP for the FY2023-2024 anticipates a well-functioning domestic market in which liquidity conditions remain favourable and provide pathways for the Government to refinance or re-open Government securities in the market with lower yields.”
“The planned domestic funding amounts to $765.2 million which is from the issuance of Fiji Infrastructure Bonds (FIB) and Viti Bonds. Government will also continue to issue Treasury Bills (T-Bills) to roll over the current stock as part of its development objective to build the market yield curve and to finance temporary shortfalls.
“New external financing for FY2023-2024 is forecasted at $300.5 million which will be sourced from multilateral financing amounting to $269.4 million. Government also anticipates reimbursement of $31.2 million from the European Investment Bank (EIB) and the Australian Infrastructure Financing Facility for the Pacific.”
