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FIJI’s PUBLIC DEBT Mandate to audit Public Debt Section 152 – 2013 FIJI Constitution Section 6 of the Audit Act Section 46 and 47 of Financial Management Act 2004 Financial Statements & Public Debt Records Disclosed as Term Loan Payable -Statement of Assets & Liabilities Loans Drawn – proceeds from Government Domestic Bonds and external loans and bonds shown in Statement of Receipts and Payments adopting modified cash basis of accounting. 1. Role of Fiji SAI Analyse the Borrowing Fund Account Examine Reported Public Debt Overseas and domestic components Changes in debt balances during the period Components of internal control – authorization, initiating and recording transactions. Role of Fiji SAI contd. Verification of debt records Compliance Internal Controls Laws and Regulations including Debt framework Analyze the Borrowing Fund Account Areas of Public Debt Management examined Contract terms and conditions of borrowings; Service (interest, discounts, and expense) payment procedures; Loan processing and direct disbursement records; Debt Recording Authorizations; Revaluation of foreign loans/hedging implication; and Regulatory requirements for granting government guarantees. 2. Composition of Outstanding Borrowings 2012 Public debt in 2012 totalled $3,678,821,497 and comprised of domestic loans of $2,631,565,650 or 72% of total debt; overseas loans of $935,530,571 or 25%; and Treasury Bills $111,731,276 or 3%. 2. Composition of Outstanding Borrowings 2012 Composition of Public Debt in 2012 Overseas, 25% Treasury Bils, 3% Domestic Debt, 72% 3. Year Borrowing in the Last Ten Years Domestic Bond $ % of Total Borrowing Treasury Bills $ % of Total Overseas Loan $ % of Total Borrowing Total $ 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 88 136,018,387 6 164,050,924 7 2,421,491,961 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 2008 2,346,258,150 81 64,552,990 2 475,994,415 16 2,886,805,555 2009 2,505,092,150 80 97,721,294 3 527,248,475 17 3,130,061,919 2010 2,759,292,150 82 74,969,800 2 548,461,798 16 3,382,723,748 2,627,382,087 74 70,921,393 2 832,147,793 24 3,530,451,273 25 3,678,829,200 2011 2012 2,631,565,650 72 111,732,963 3 935,530,587 3.1 Govt. Borrowings Outstanding From 2003-2012 Amount ($) Billions Government Borrowings Outstanding (2003 - 2012) Treasury Bills Overseas Loans Domestic Loans Total Borrowings 4 3.5 3 2.5 2 1.5 1 0.5 0 2003 2004 2005 2006 2007 2008 Years 2009 2010 2011 2012 4. Deficit to be Financed from Borrowings 2007: $334,935,764 2012: $136,880,612 Figure 10.4 Deficit to be Financed from Borrowings 400 350 300 250 200 Amount ($m) 150 100 50 0 -50 2003 2004 2005 2006 2007 2008 2009 -100 -150 -200 -250 -300 -350 -400 Year 2010 2011 2012 5. Overseas Loan Raised in 2012 Yearly Overseas Borrowings 2002 - 2012 Yearly Overseas Borrowings: 2002 - 2012 Amount ($m) 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007 Year 2008 2009 2010 2011 2012 5.1 Composition of Outstanding Overseas Loans 2012 Composition Composition of Outstanding Overseas Loans Water Supply & Sewerage 2% Road Maintenance 17% Flood 1% E Government Project 7% Housing 2% International Bond 71% 6. Treasury Bills Raised Composition of Treasury Bills Composition of Treasury Bills Borrowing 2012 Others 1% FNPF 15% Commercial Bank 83% Flexibility – Interest Bite 7. Percentage of Debt Repayments to Total Revenue Percentage Interest Bite 2012 – 55% (2011 – 48%) 80% 70% 60% 50% 40% Interest Bite 30% 20% 10% 0% 2002 2003 2004 2005 2006 2007 Years 2008 2009 2010 2011 2012 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 total debt. 8.1 Overseas Loan Percentage to Total Government Debt Trend Year 2012 – 25% (2011: 23%) 25% Percentage 20% 15% 10% 5% 0% 2002 2003 2004 2005 2006 2007 Years 2008 2009 2010 2011 2012 9. Sustainability Government Borrowing as a % of GDP Year 2012 – 49% (2011: 52%) 56% Percentage 54% 52% 50% 48% 46% 44% 2003 2004 2005 2006 2007 2008 Years 2009 2010 2011 2012 10. Summary & Conclusion Total debt outstanding increased by $148m or 4% in 2012 compared to 2011. The Deficit to be financed from Borrowing also decreased by $185.9 from a surplus of $49.0 m during 2011 as there was a deficit of $136.9 million in 2012. Overseas loans raised in 2012 also saw a decrease of $431.3 m or 76% compared to that of 2011, and The decrease of 3% in the Public debt ratio as a % of GDP indicates a favorable sustainability in debt. Thank You