Majority of the members of parliament authorise Minister for Economy to loan $65 million from ADB

Majority of the members of parliament have authorized the Minister for Economy to borrow money by raising loans of US$65 million from the Asian Development Bank and US$35 million from the International Bank for Reconstruction and Development.

Minister for Economy Aiyaz Sayed-Khaiyum says this is for the purpose of refinancing the 2015 Global Bond in October 2020 on such terms and conditions as the Minister thinks fit.

Sayed-Khaiyum says the government has been effectively pursuing cost-effective and least risky option of redeeming the US$250 million Global Bond due in October 2020.

He says the first international bond with a 5 year maturity was issued in 2006 by the then Qarase government for US$150 million, subsequently the Bainimarama government and the FijiFirst government raised US$250 million and then US$200 million rolling it over in 2011 and 2015 respectively.

Sayed-Khaiyum says given that the funds were raised in the international bond market which attracts market interest rates ranging from 6.6 percent to 9 percent, it is in the best interest from a cost of refinancing risk perspective to explore other sources of funding.

While responding on the motion, National Federation Party Leader, Professor Biman Prasad says public debt always has a negative impact on economic growth and it puts the burden on the future generations.

Prasad says the loan should have been paid in the last 4 or 5 years.

SODELPA MP, Niko Nawaikula says he believes the government desperately needs money and it is bringing in laws like re-registration of companies to raise more money.

He says he believes the e-ticketing system is also brought in to raise for money for the government. Nawaikula says even the lawyers have to be tax and FNPF compliant to get the legal practitioners license. He says this is a sign of ‘desperado’.

Aiyaz Sayed-Khaiyum says the money is being drawn down however it won’t be used now. He also says that the government will make a saving of about $15 million because the interest rate will be about 3 percent compared to more than 6 percent.

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