[Source: Fiji Government/Facebook]

A recent report released by the Asian Development Bank highlighted that State-Owned Enterprise governance and commercial framework have made significant strides since the passage of legislation in 2019.

However, the report highlights the need for continued improvement in reporting and transparency.

ADB Regional Director for the South Pacific Subregional Office, Aaron Batten, commends Fiji’s SOE portfolio as one of the top performers in the region between 2015 and 2020.

[ Source : Fiji Government] 

He emphasizes that the Public Enterprise Act has played a pivotal role by establishing a single minister responsible for SOE ownership interests, outlining detailed director duties and governance practices, simplifying the definition and legal forms of SOEs, and providing clarity on community service obligations.

[ Source : Fiji Government] 

Despite these positive developments, the Act only applies to 13 SOEs, representing less than 20 per cent of the government-controlled SOE assets in 2020.

Furthermore, he highlighted that the Act lacks specified due dates for SOE account submissions to the responsible minister and does not mandate the presentation of these accounts in Parliament. The report suggests that legal reforms could greatly enhance the Act’s effectiveness.

According to the report, Fiji’s SOEs recorded an average return on equity of four per cent per annum from 2010 to 2021, with an average return on assets of 2.1 per cent over the same period. These figures indicate the need for further improvements in financial performance.

[ Source : Fiji Government] 

Additionally, the report reveals that state-owned utilities that prioritize commercialization are more likely to respond to incentives for decarbonization and asset protection.

[ Source : Fiji Government] 

While Pacific SOEs have shown improved returns, the report states that they continue to fall short of covering their cost of capital.

[ Source : Fiji Government]