The Fiji Times »Ratu Naiqama on Fiji Airways loans


Although Fijians own 52% of the shares of Fiji Airways Ltd, people do not have access to general company reports, said opposition leader Ratu Naiqama Lalabalavu.

Responding to a motion by Economy Minister Aiyaz Sayed-Khaiyum for an increase in the government guarantee for Fiji Airways’ local and offshore borrowing, Ratu Naiqama said people needed a better idea of ​​the prospects in the middle and long term for a company to appreciate the implications of an additional $ 106.4 million over the existing open guarantee of $ 4.55 million.

“So if these two guarantees are approved by this august House, it means that our contingent liability will increase from $ 1.1 billion to $ 1.286 billion, an increase of about $ 186.4 million,” said Ratu Naiqama.

“This means that our total contingent liability will be around 12% of GDP.

“Yet despite the risks, the government continues to facilitate additional guarantees to both institutions. “

Yesterday, the government also sought parliamentary approval to extend the government guarantee from $ 170 million to $ 250 million for the 12-month period from March 1, 2021 to February 28, 2022 (guarantee period) for borrowings of the Development Bank of Fiji through the issuance of short and long term securities – term bonds, promissory notes, term deposits, other short term borrowings and any reserve bank of Fiji funding facility ; and that a 0.075 percent guarantee fee be applied to the accumulated guarantee credit used.

Ratu Naiqama said that an International Monetary Fund report released on October 7, 2021 clearly suggested that the economy would continue to contract with the concomitant increase in public debt to nearly 90% of GDP.

“Contingent liabilities also increased during the pandemic, and the government extended guarantees to state-owned enterprises.

“So there is no wiggle room or fiscal space to protect against such a risk, sir.

“Instead, the government has decided to forgo almost $ 200 million to stimulate consumption, the result of this guarantee will put more pressure on our economy and be very difficult to recover.”

In his right of reply, Mr. Khaiyum denied Ratu Naiqama’s assertions by saying, “No, of course, this has led to consumption, now we have had so many people telling us that it actually was. good for business, small stores “.

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