Fijian economy forecast growth revised upward

The Fijian economy is now expected to grow by 12.4 percent this year, up from the 11.3 percent growth envisaged earlier.

The Reserve Bank of Fiji in its latest economic review states, the ongoing tourism recovery and its flow-on effect on employment, tax collections and overall aggregate demand, as well as the absence of restrictions on economic activity relative to last year, will provide the required tailwinds to the recovery.

The broad-based economic recovery is envisaged to continue into 2023 and 2024, with the economy forecast to expand by 9.2 percent and 5.0 percent, respectively.

Looking at the increasing number of visitor arrivals to our shores so far, the Tourism Industry is projected to fully recover by 2024.

The RBF has revised the 2022/2023 projection, stating that visitor arrivals will reach 55 percent of the 2019 level from the 50 percent projected earlier and recover fully by 2024.

Since the border reopened, arrivals totaled 143,399 visitors, equivalent to 44.6 percent of the arrivals recorded in the same period in 2019.

Governor, Ariff Ali says arrivals from Australia, New Zealand, and the United States dominate the tourism market, accounting for 91.7 percent of visitors in the first five months of the year.

Combined with the stronger-than-expected recovery in a number of other economic indicators observed to date and generally positive feedback from major stakeholders, Ali says the Macroeconomic Committee has upgraded the growth forecast for 2022.

Government’s tax revenue has also picked up, increasing by an annual 22.8 percent in the year to May.

RBF says the financial sector is also supportive of the economic recovery as private sector credit grew annually by 2.6 percent in May, driven by $1.3 billion in new lending disbursed by commercial banks.

Ample liquidity in the banking system, at above $2.2 billion, continues to place downward pressure on interest rates which are currently near historically-low rates.

RBF says the main sectors expected to contribute to the growth outlook are the transport and storage; accommodation and food services, manufacturing, finance and insurance, agriculture and education sectors.

Despite the growing optimism, the rising risk of stagflation across the globe is a significant downside risk to the outlook.

RBF says globally high inflation rates have led to aggressive monetary policy tightening in advanced countries, which will stall growth and possibly dampen demand for travel to Fiji.

On a positive note, demand for travel continues to rise globally, thus Fiji can still gain from the expanding pie of travel-ready tourists.

The next review of macroeconomic projections is scheduled for November.

Credit: FBC

Foreign Investors Want To Partner With Locals: Seeto

“Investment Fiji has taken the lead in its transitional role to bring about changes outlined in its new governing Act”

Attendees at the Fiji Institute of Accountants annual general meeting and 50th anniversary celebration at the Sofitel Fiji Resort And Spa, in Nadi on June 25, 2022 . Photo: DEPTFO News

“Investment Fiji has taken the lead in its transitional role to bring about changes outlined in its new governing Act,” chair-person Jenny Seeto said.

Under the new Act, foreign investors do not have to invest in Fiji to get a foreign investment registration certificate, she said.

Speaking at the Fiji Institute of Accountants annual general meeting and 50th anniversary celebration in Nadi, she said the Investment Act, which comes into effect on August 1 meant foreign investors would be treated like their domestic counterparts.

It will also allow Investment Fiji to focus on investment and trade promotion, and provide aftercare services.

The Act would focus on increasing the success of foreign businesses globally, and match high impact capital with Fijian businesses and investment opportunities, Mrs Seeto said.

“We have a number of investors at the moment from Fiji, who we are trying to match with overseas investors,” she said.

Mrs Seeto said foreign investors have since learnt that a quick way to succeed was to partner with lo- cal investors.

Fiji was abound with opportunities that needed courage to be developed into worthy investments, she said.

“We look at what sectors we are going to invest in.”

Transitioning into an investment promotion agency would mean a stronger brand, with a more proactive focus on competitive sectors, she said.

Investment Fiji could now free up staff to provide improved investment facilitation services, as a result of the new Act.

Aftercare services involved helping investors move projects along that were otherwise stuck, Mrs Seeto said.

“We have large investors; we’re talking 10s of millions and hundreds of millions of dollars for some of these projects,” Mrs Seeto said.

Trade Mission

Investment Fiji will lead a trade mission to Australia straight after the National Budget is delivered.

The delegation, which will include the Reserve Bank of Fiji Governor, Ariff Ali, will head out after the Budget is delivered on July 15.

“We just took a stab in the dark as to when the Budget would come out,” Mrs Seeto, said.

“We had to do a mission straight after the Budget, because we’ve had a lot of inquiries from overseas, Australia, New Zealand, as to what incentives are available.

About 30 businesses will join the delegation.

“It’s not meant to be a holiday; it’s a tight schedule,” Mrs Seeto said.

“We were going to Sydney, Brisbane, and the the trade office in Australia, where some meetings have been planned for some investors.”

Digitalisation will always be a journey because of fast changing technological advances,” Mrs Seeto said.

“The pandemic has resulted in reviews of business models and the delivery we must do to survive,” she said.

“We must find solutions to our sudden loss of skilled labour that’s been very topical in the private sector.”

“The brain drain will continue, and up skilling of our people is obviously imperative.”

She called for easier access for skilled labour to enter Fiji to fill the gaps, a matter that the Immigration authority was considering.

Credit: Fiji Sun

Fiji signs $150m loan agreement with ADB

The Asian Development Bank and the Ministry of Economy today signed a $150m loan agreement to boost economic recovery and various other local sectors.

Asian Development Bank Regional Director, Aaron Batten says their support towards Fiji’s sustainable and resilient recovery program is only possible through the effective management of COVID-19 and the combined efforts of government, organizations, and the people.

Batten adds the agreement also supports climate change and green growth which have long been cross-cutting themes across Fiji’s development agenda.

“The sustainable and resilient recovery program further deepens Fiji’s long-standing commitment to the global climate agenda. Realizing the dangers posed by climate change, Fiji was the first country in the world to ratify the Paris Climate Agreement back in 2016.”

Minister for Economy, Aiyaz Sayed-Khaiyum says this financing from ADB will assist developments and expand the government’s gender-responsive budgeting.

“We now have five additional ministries that are implementing gender-responsive budgeting. Initially, we have the two ministries, the Ministry of Fisheries, MCTTT and now we have got the Ministry of Education, Youth and Sports, Agriculture, Forest, Women and Police.”

Sayed-Khaiyum says this will help build the resilience of our economy, empower ordinary Fijians and create a better commercial environment for the private sector.

The Sustainable and Resilient Recovery Program comprises a $60 million policy-based concessional loan and a $90 million policy-based regular loan.

Credit: FBC

Business Increasing Warehouse Capacity

Supply chain issues and shipment delays has seen some businesses in Fiji increasing storage capacity.

ANZ Country Head for Fiji, Rabih Yazbek says in many cases, businesses have spent working capital to buy excess stock to ensure they don’t run short on supplies.

Yazbek says in these cases, it is helping customers to navigate the current tricky times as businesses are taking loans to increase their warehouse capacity.

“Main pocket of lending we are seeing is in properties, mainly commercial property. This is where you have large businesses who have to build more warehouse and storage capacity so that they can stock more to counteract the supply chain disruptions we are seeing around the world at the moment.”

According to ANZ, there are major economic opportunities for Fiji, including “trade up,” which refers to banks’ supporting their customers as they recover from the pandemic.

According to the Reserve Bank’s May economic review, private sector lending grew annually by 2.3 percent. New loans by commercial banks also increased, underpinned by higher loans to businesses engaged in wholesale and retail trade activities.

Credit: FBC TV

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“Use Land To Make Money”: Landowners Told By PM

Landowners have been urged to explore cash- generating opportunities through the use of their lands.

Prime Minister Voreqe Bainimarama.

Landowners have been urged to explore cash- generating opportunities through the use of their lands.

Prime Minister, Voreqe Bainimarama, made the call at the Naitasiri Provincial Council meeting where he was chief guest.

He said the Government was a partner with landowners where land utilisation could generate income.

“We’ve waived premium payments from lease offers, making it easier for landowners to own leases, and obtain credit from financial institutions, to develop their lands,” he said.

He said a tenant cannot could not subdivide a lease on their own volition, to circumvent regulatory checks and balances.

Landowners Consent

A landowner’s consent was required for any land-related change.

“In all cases of subdivisions, once new leases are issued over each newly created lot, a premium is required to be paid directly to the landowners for each lot,” he said.

“And just because tenants have already paid a premium on the original lease, does not mean they do not receive any benefit, even if the land is legally subdivided.”

“Subdivisions and land developments increase the value of the land in the medium to long term.”

TLTB still had the right to any development lease for non-compliance to lease terms and conditions.

60 per cent

Landowner consent needed prior to leasing of land.

10 per cent

The board incorporates 10 per cent of sales consideration for any lot sold for individual title.

“Landowners benefit from this deal by having 10 per cent of sales consideration (sales price) per lot upon sale.

“Landowners have the right to lease their land, either on their own or in partnership with Government, and go on to benefit from the equity returns of its sale at market rates,” he said.

Leasing A Land

Five things must be factored into consideration when leasing a land, Mr Bainimarama said.

The five factors were:

• 60 per cent of the community consent for the land to be leased.
• community consent on the type of lease.
• community consent on the term of the lease
• community consent on the premium.
• community consent on the yearly lease payments.
• Source: Fiji Sun

Fiji amongst NZ’s top 20 trading partners: Koya

Faiyaz Koya

New Zealand continues to remain one of Fiji’s largest trading partners.

Minister for Commerce and Trade, Faiyaz Koya says prior to the pandemic, the total two-way trade was worth over $898 million.

Fiji exports fresh produce, pharmaceutical products and garments to NZ worth around $162 million annually.

Koya says Fiji is the only country in the region to be amongst New Zealand’s top 20 trading partners.

“On the Tourism front, New Zealand was Fiji’s second-largest tourist market and one of the fastest-growing sources of international arrivals with over 200,000 Kiwis visiting Fiji in 2019. Inevitably, the pandemic had resulted in a decline in our two-way trade by 9.37 percent, reducing to $813.90 million in 2021.”

Koya says visitor arrivals from NZ declined by 97.9 percent to 532 visitors, and tourism earnings declined by 91.22 percent to $0.4 million.

He adds the government is confident there are opportunities to further secure the country’s economic future by enhancing the trade and investment relations.

The Minister says they look forward to getting the tourism numbers back on track, as both countries continue to remove the travel restrictions.

Source: FBC

Increased economic activity buffer domestic inflation

Fiji’s current economic activity has to some extent, countered the harsher impacts of domestic inflation on ordinary consumers.

Reserve Bank Governor Ariff Ali says domestic inflation is expected to increase from three to around seven percent in the next couple of months before we see a drop towards the end of the year.

Ali says Fiji has been able to successfully manage inflation so far.

“Within a span of two months, arrivals from New Zealand have surpassed the 50 percent that we had anticipated. About 65 percent of visitor arrivals came in May this year compared to May 2019. “

Ali adds that Fiji’s investment market is also growing, contributing to our economic recovery.

Participating in the ‘Enabling Trade Recovery’ today, Immigration Director Amelia Komaisavai says they continue to receive investor permit applications.

“In terms of New Zealand investors, we saw from our permit application, tourism goes up as a leading industry. After tourism is real estate. Based on our record, we have a total of 149 New Zealanders holding an investor permit right now, and 86 are those that continue to extend their investor permit. “

The business community is having a “Business Mission 2022” programme in which they engage with the New Zealand Fiji Business Council to explore business opportunities.

Source: FBC

Investment Fiji settles in promotion agency role

Investment Fiji CEO, Kamal Chetty. [Photo: Supplied]

Investment Fiji has fully settled in its role as an investment and trade promotion agency.

Chief Executive, Kamal Chetty says with the investment body’s recent transition from a regulator unit to promotions, it is in a grand position to attract the right type of investment and exports to aid Fiji’s economic recovery.

“So with this transition, our aim is to provide best service to investors, with the right kind of information and target the right kind of investors.”

Chetty says Investment Fiji’s transition is right on time, following the World Bank’s report which stated that statutory bodies that act as both regulator and promoter can sometimes mix their roles.

He says this sometimes leads to these agencies not giving the best service to their investors.

Source: FBC

Tourism earnings for March quarter looks promising

[File Photo]

Fiji’s tourism earnings increased by over 3,800 percent in March compared to the same quarter last year.

The Fiji Bureau of Statistics in its report states that earnings from the quarter stands at $109.4m.

It also says that the March quarter earnings for this year was 255 percent higher than the amount recorded for the December quarter of 2021.

The Australian market raked in $86.6 million contributing over 79 percent to the total.

The United States of America is second contributing $14.6m to the total while New Zealand is third with earnings standing at $2.3m.

The Chinese market is also in top four as earnings increased by 25 percent raking in half a million dollars for the first quarter of this year.

These numbers look promising for Tourism Fiji and its stakeholders, as the industry suffered a huge setback in 2020 and 2021 due to travel restrictions as a result of COVID-19.

Source: FBC

Port Denarau Marina ensures they are aligned to the strategic plans for tourism

[Photo:Port Denarau Marina]

As the tourism industry in Fiji recovers after the borders reopened, the Port Denarau Marina is ensuring they are aligned to the strategic plans of a $3.37 billion industry for tourism by 2024.

Chief Executive Officer, Cynthia Rasch says they are ready to cater for the increase in demands of transient vessels and super-yachts.

Rasch also says they have a dredging project currently in the pipeline with master planning underway for expansion of their marina offerings.

She adds since November 2021, there has been a hive of activities at the Marina and as more properties in the Yasawas and Mamanucas have reopened, they have seen heightened activitis with their commercial ferries and business in general within the port premises.

Credit: FijiVillage