Fiji to refinance global bond

By Peni Komaisavai

Fiji’s Parliament has passed a government motion to borrow money by raising loans of US$65million from the Asian Development Bank (ADB) and US$35million from the International Bank for Reconstruction and Development.

Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum told parliament the loan would refinance a 2015 Global Bond which is due in October 2020.

The Bond was first issued in 2006, and was rolled over in 2011 and 2015.

The motion came under fire from Opposition leader Biman Prasad who criticised government for putting a heavy burden on Fiji’s future generation.

“The Government must take some blame, public debt always has a negative impact on economic growth, there is no such thing as sustainable debt, Government is putting a heavy burden on the future generations,” Prasad said.

“The fact is we are borrowing more, this is a reminder to the Government that you have brought this onto yourself, we had the opportunity to repay this loan three to four years but instead we are borrowing more.”

In his response, Sayed-Khaiyum accused the Opposition of misleading parliament.

“When you refinance a debt you do not increase the volume of the debt it just means that we are moving to another bank because it gives us a better interest rate,” he said.

He said the interest rate for the previous loan sat at about 6 % where as the current one sat at a little bit over 3%.

He said there was nothing wrong in trying to save Government about $15 million and that all loans made by the current Government had been for development purposes.