Transcript FIJI’S PUBLIC DEBT

FIJI’s PUBLIC DEBT
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Mandate to audit Public Debt
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Section 152 – 2013 FIJI Constitution
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Section 6 of the Audit Act
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Section 46 and 47 of Financial Management Act 2004
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Financial Statements & Public Debt Records
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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
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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.
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Verification of debt records
Compliance
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Internal Controls
Laws and Regulations including Debt framework
Analyze the Borrowing Fund Account
Areas of Public Debt Management examined
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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.
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Deficit to be Financed from
Borrowings
2007: $334,935,764
2012: $136,880,612
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Figure 10.4
Deficit to be Financed from Borrowings
400
350
300
250
200
Amount ($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