1. 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.

2. 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.

3. 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.

4. 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%.

5. 2.Composition of Outstanding Borrowings 2012

6. 3.Borrowing in the Last Ten Years YearDomestic Bond $ % of Total Borrowing Treasury Bills $ % of Total Overseas Loan $ % of Total Borrowing Total $ 20031,682,718,65079276,925,83813174,125,75282,133,770,240 20041,986,515,65087126,987,8226168,665,37972,282,168,851 20052,121,422,65088136,018,3876164,050,92472,421,491,961 20062,300,672,65080141,311,6875416,729,200152,858,713,537 20072,196,208,15080141,160,4335397,103,384152,734,471,967 20082,346,258,1508164,552,9902475,994,415162,886,805,555 20092,505,092,1508097,721,2943527,248,475173,130,061,919 20102,759,292,1508274,969,8002548,461,798163,382,723,748 20112,627,382,0877470,921,3932832,147,793243,530,451,273 20122,631,565,65072111,732,9633935,530,587253,678,829,200

7. 3.1Govt. Borrowings Outstanding From 2003-2012

8. 4.Deficit to be Financed from Borrowings 2007: $334,935,764 2012: $136,880,612

9. 5.Overseas Loan Raised in 2012 Yearly Overseas Borrowings 2002 - 2012

10. 5.1Composition of Outstanding Overseas Loans 2012 Composition

11. 6.Treasury Bills Raised Composition of Treasury Bills

12. 7.Flexibility – Interest Bite Percentage of Debt Repayments to Total Revenue Interest Bite 2012 – 55% (2011 – 48%)

13. 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.

14. 8.1Overseas Loan Percentage to Total Government Debt Trend Year 2012 – 25% (2011: 23%)

15. 9.Sustainability Government Borrowing as a % of GDP Year 2012 – 49% (2011: 52%)

16. 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.

17. Thank You