Fiji will need to raise a staggering $1 billion in the next year to service public debt.
Deputy Prime Minister and Minister for Finance, Professor Biman Prasad said this is about $536 million dollars for interest payments and another $516 million for principal repayment alone.
He said Fiji cannot afford to default on its repayments.
“In other words, almost one dollar out of every four in this Budget must now be spent servicing Government debt.”
He said during his consultations with Cabinet Ministers, he told them that they needed to understand Government’s abilities to spend on capital works, maintenance, upgrades and incentivize human capital that the Government is losing daily and is being crowded out by debt repayments.
Prof Prasad said poor revenue and spending decisions for years, including during the COVID-19 crisis, have undermined Government finances and now left the Government deeply in debt.
“National infrastructure has been ignored, with highly visible consequences. Government has been left scrambling to fix infrastructure problems for which no money has been budgeted, because for years there has been no money for maintenance.”
He added that the Coalition Government has inherited a public debt of close to $10 billion, almost the entire size of Fiji’s economy.