‘It is a recipe for disaster ’
23 May, 2022, 11:52 am
Borrowing because of low-interest rates and long grace periods is a recipe for disaster, says Unity Fiji party leader Savenaca Narube.
He made this comment while responding to close to $900 million in loans taken by the Government during the COVID-19 pandemic that was concessional or zero interest rate and repayments were scheduled to begin from the 11th year.
The former Reserve Bank of Fiji governor said the Government of the day needed to clear its expenditures first.
“Government is trying very hard to defend the loans when they should be defending the expenditures that the loans are financing,” he said.
“That is not smart.
“First and foremost, the Government must clean up its expenditures.
“We must never forget that a loan is always a loan. “Although the interest may be low, the principal still needs to be repaid.
“Would Fiji have the capacity to pay this principal in ten years’ time?”
Mr Narube said the government was burdening future generations by borrowing simply because interest rates were low and grace periods were long.
“It is a recipe for disaster.”