FIJI’s PUBLIC DEBT

Mandate to audit Public Debt Constitution Audit Act Finance Management Act 2004

Accounts and Records Borrowing Fund Account-St. of Receipts and

Expenditure

1. Role of Fiji SAI

Analyse the Borrowing Fund Account

Examine Reported Public Debt Foreign and domestic components Changes in debt balances during the period Financial costs Components of internal control – authorization,

initiating and recording transactions

Role of Fiji SAI contd.

Verification of debt records Compliance

Internal Controls Laws and Regulations

Analyse the Borrowing Fund Account Areas of Public Debt Management examined-

Contract terms and conditions of borrowings Service (interest, discounts, and expense) payment

procedures Authorizations Revaluation of foreign loans Applications of resources from foreign lending agencies Regulatory requirements for granting government guarantees Contingent Liabilities

2. Composition of Outstanding Borrowings 2007

Figure 7.1Composition of Public Debt in 2007

Domestic Loans80%

Overseas Loans 15%

Treasury Bills5%

3. Borrowing in the Last Ten Years

Year DomesticBond $

% of TotalBorrowing

TreasuryBills$

% ofTotal

OverseasLoan$

% of TotalBorrowing

Total $

1998 1,016,273,250 78 43,790,072 3 245,557,713 19 1,305,621,035

1999 1,046,595,650 76 117,231,671 9 206,036,450 15 1,369,863,771

2000 1,158,595,650 81 72,449,838 5 207,697,167 14 1,438,742,655

2001 1,302,595,650 77 176,604,613 10 206,889,315 12 1,686,089,578

2002 1,501,095,650 80 196,432,453 10 193,505,879 10 1,891,033,982

2003 1,682,718,650 79 276,925,838 13 174,125,752 8 2,133,770,240

2004 1,986,515,650 87 126,987,822 6 168,665,379 7 2,282,168,851

2005 2,121,422,650 87 136,018,387 6 164,050,924 7 2,421,491,962

2006 2,300,672,650 80 141,311,687 5 416,729,200 15 2,858,713,537

2007 2,196,208,150 80 141,160,433 5 397,103,384 15 2,734,471,967

3.1 Govt. Borrowings Outstanding

From 1998 - 2007Figure 7.2

Government Borrowings Outstanding (1998 - 2007)

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

3,500,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Years

Amou

nt ($

m)

Treasury Bills

Overseas Loans

Domestic Loans

Total Borrowings

4. Deficit to be Financed from Borrowings 2006 $348,146,225 2007 $306,858,903

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

Am

ount

($m

)

5. Overseas Loan Raised in 2007

Yearly Overseas Borrowings

0

50

100

150

200

250

300

Am

ount

($m

)

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

Figure 7.4Yearly Overseas Borrowings: 1998 - 2007

5.1 Composition of Outstanding Overseas Loans 2007 Composition

Figure 7.10Composition of Outstanding Overseas Loans

E-Government P roject1%

Global Borrowing 59%

Agriculture1.3%

Water Supply & Sewage P roject

14%

Investment/Export P rogramme

1%

Others1.5%

Road Upgrading 21%

Rural Electrification1.3%

Alternative Livelihood P roject0.25%

6. Treasury Bills Raised

Composition of Treasury Bills

Composition of Treasury Bills

Colonial Fiji Life Limited 0.3%

Air Pacif ic Ltd4%

Home Finance0.4%

Credit Corporation Ltd0.1%

Others0.2%

FNPF9%

Commercial Banks87%

Life Insuarnce Corporation

0.4%

7. Flexibility – Interest Bite

Percentage of Debt Repayments to Total Revenue

Figure 7.7Percentage of Debt Repayments to Total Revenue

"Interest Bite"

Revenue for Government Programs

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Years

Per

cen

tag

e

8. Vulnerability

Measures the degree of dependence of Government on sources of Borrowing outside its control.

One of the measures is the comparison of overseas loan to the total debt.

8.1 Overseas Loan Percentage to Total Government Debt Trend

00.020.040.060.08

0.10.120.140.160.180.2

Perc

enta

ge

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Years

Figure 7.8Overseas Loan Percentage to Total Government Debt

9. Sustainability

Government Borrowing as a % of GDP

0%

10%

20%

30%

40%

50%

60%

Perc

enta

ge

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Years

Figure 7.9Government Borrowings as a % of GDP

10. Summary & Conclusion

Total debt outstanding decreased by $124m or 5% in 2007 compared to 2006.

The Deficit to be financed from Borrowing also decreased by $41.3m or 12% compared to 2006

Overseas loans raised in 2007 also saw a decrease of $19.6m o5 5% compared to that of 2006, and

The decrease of 4% in the Public debt ratio as a % of GDP indicates a favorable sustainability in debt.

Thank You

Questions if Any!!!