Dec 03, 2020 Last Updated 4:55 AM, Dec 2, 2020

Jobless numbers soar in Fiji

  • Dec 04, 2020
  • Published in August

Unscripted and unplanned, Fijians have returned quietly to the land and the sea over the past months as the impacts of job losses brought about by the COVID19 pandemic began to bite.

In the tourism belts of Nadi and nearby Sigatoka, former hotel and resort workers – in their hundreds – are turning to farming and fishing virtually overnight.

Necessity is driving them, and no one knows when, how, or indeed if, this quiet revolution will end.
“With many in the village losing their work, we no longer have a steady income to buy food so we’re planting our own,” says Epeli Ganilau.
He is Turaganikoro, village administrator of Sanasana, the traditional owners of the land which hosts the multi-million dollar InterContinental Fiji Golf Resort & Spa and the Natadola Bay Championship Golf Course.

With almost all the men and women in the village laid off work from the resort and its neighbouring golf course, Sanasana has revived their youth and women clubs to spearhead the return to subsistence farming and fishing.

Other villages in Fiji’s tourism belt on Viti Levu’s west coast and Vanua Levu’s south coast around Savusavu town have done the same; closure of hotels and supporting businesses has driven jobless men, women and youths back to subsistence farming, or fishing.

Figures are daunting, and likely to worsen

A survey of tourism businesses by the International Finance Corporation and Fiji’s Ministry of Commerce, Trade, Tourism and Transport found that if the current situation doesn’t change by this November (a likely scenario given recent increases in COVID diagnoses in the Australian and New Zealand source markets), over 500 of the 3,569 businesses surveyed anticipate bankruptcy. If international travel does not resume within six months, 60.5% of those surveyed will close or move away from the tourism sector.

The study further found that 20% of tourism businesses are currently unable to service their debt, and a further 16% expect to default on their debt within one to four months, and have called for loan repayment moratoria, further tax reductions/holidays, and financial support for recovery and rent deferral.

Meanwhile a study by the International Labour Organisation on the impact of COVID-19 on employment also released at the end of last month found half of the workers surveyed had lost their jobs, and most of those still in employment were on reduced hours. More than half of redundant workers said they could not find jobs and needed financial support, and 46% had ventured into subsistence living and operating a microbusiness. Almost all (99%) said the government should do more to protect their jobs and rights, “instead of depleting their retirement fund.”

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Fiji’s workers’ pension fund, the Fiji National Provident Fund  has reiterated that members funds are well protected and that the Fund has the capacity to meet partial withdrawals for members who have lost work orworking on reduced pay or hours due to the impacts of the COVID19 pandemic.

Fund chief executive officer Jaoji Koroi gave the reassurance during a news conference he called at the Fund’s boardroom in Suva to announce the start of a new round of withdrawals for affected members.

“I must stress that the Fund is well within its financial means to enable these withdrawals for members, while continuing to monitor and manage the impact of the pandemic on our business and operations. The Fund’s total assets is in excess of $7 billion and with cash deposit in excess of $500m, so the Fund has the financial capacity to pay this financial obligations to our members.”

With the next phase of payout to members due to start on 1 September, and continue for the next two months, Koroi could not say how long this assistance would last. “We are continuing to assess as we go.We are hopeful that things can turn out quickly but as I said Phase Two Round 2 is for another five fortnights, of $110.”

To date, a total of 113 thousand FNPF members have been assisted in which a total of $87 million have been paid out. This number is expected to rise however to around 159-thousand workers when new payout schemes are rolled out by the Fund, including draw down for those who have been unemployed since October 2017.

On Fiji Airways, Koroi said therehave been no new talks for additional loans to the national carrier after it lent $53 million in March this year. He confirmed though that the airline had applied and granted a moratorium on interest payments. “Like any lender, we are assessing the situation that we have on hand now. Of course Fiji Airways plays a very important role for our tourism sector, we also have a lot of our own investments in the tourism sector, so we will have to assess that loan under the current environment that we have. Our facilities are well secured, in terms of the $53m that we lent recently was guaranteed by government.”

FNPF ponders telco investment

  • Dec 04, 2020
  • Published in June

An invitation by Amalgamated Telecom Holdings(ATH) to existing shareholders to buy up more shares is still being considered by the Fiji National Provident Fund (FNPF).

FNPF is the major shareholder, owning around 72% of the telecom group.

"We are still assessing that investment," FNPF CEO Jaoji Koroi told Islands Business.

"It's a strategic investment for us. ATH has grown the past years into the Pacific and the rights issue is to fund that growth. Of course the environment now has changed (due to COVID-19) so we have to assess [it] differently," Koroi said.

ATH is listed on the South Pacific Stock Exchange (SPX) and announced late April an intention to raise F$126.76 million (US$58.32 million) via a 1 share for 6.66 rights issue, at a discount price of F$2 (US$.91) per share.

The rights issue, which was to have closed on June 18, has now been extended to July 17.

For the full story, get the June Islands Business.

 

Around 8,000 members of the Fiji National Provident Fund (FNPF) now have less than F$35 in their General Account (GA) after exhausting it over COVID-19 assistance.

This was revealed by the Fund this week when it gave details of a second phase of assistance for members - to begin tomorrow (Friday June 5) with a payout of around F$1.7million ($220 each) to the 8,000 members.

"These are the members who came in during COVID 1 (COVID-19 Assistance Phase One) and have exhausted their GA balances. Why we have kept the $35? It is to cover their Special Death Benefits. So about 8,000 workers have between $0 and $35. For these 8000 members, the government will fully pay their assistance for the next five fortnights," said FNPF Chief Financial Officer Pravinesh Singh.

Phase 2, announced by government last week, will see FNPF members unemployed due to COVID-19 dipping again into their own accounts for a total of $1,100 per member, paced out in five fortnightly payment of $220 per fortnight, with those having less than $1,100 to be topped up by government.

Category 1 of Phase 2, which comes into force today, caters for 8,000 members, according to Singh.

While the first $220 will be directly deposited into their bank accounts this Friday, they will only qualify for the next fortnight's $220 and subsequent installments if they are able to verify, via their previous employer, that they are still unemployed.

Singh said the Fund expects total value of assistance for this first group to be at around F$8.8 million, if all 8,000 members qualify for the duration of the five fortnights.

Category 2 and 3 of Phase 2 will be activated on June 9, with total value dependent on number of applications approved.

The FNPF, a compulsory pension scheme for Fijian workers, maintains a 70/30 access rule for each member, where 70 percent of a member's account is preserved for retirement (Preserved Account) and 30 percent is for members to access for a list of approved benefits such as housing, unemployment and education(General Account).

According to CEO Jaoji Koroi, this 70/30 rule was instituted in 2012 following a reform of the Fund and this has helped build up members' Preserved Account from F$2.5billion in 2014 to F$4.72 billion at the end of June last year.

The Fiji National Provident Fund (FNPF) is helping to bail out Fiji Airways as it is a strategic investment for tourism, which accounts for around 16 percent of the Fund's investment portfolio.
 

While confirming FNPF's participation in the Fiji Government-guaranteed loan facility of F$455 million (US$207 million)  approved by Parliament last week, FNPF CEO Jaoji Koroi said interest payments, deferment and related issues will be discussed with the borrower under the Fund's new lending facility, in which its borrowers can make suitable arragements in light of difficulties faced due to COVID-19.

"FNPF has always had a strategic relationship with Fiji Airways. We're a long term investor and we see Fiji Airways as a strategic asset for Fiji because tourism is quite important and having a strong airline is crucial for our investments in the tourism sector. As you know after the Global Financial Crisis, we had that investment with Fiji Airways through a loan and that has yielded good results over the years. In fact, members have received close to $65.1million in interest from that lending facility since then. We're going through a very important cycle, and we still need to look to the future. We still need that strategic asset to grow and continue to bring back what we all look forward to, which is a strong tourism sector," Koroi said.

"It's a matter of looking over the next two years or so, we understand the capacity and what needs to be done. I think Fiji Airways has also done internal restructuring of their balance sheet in terms of what to let go and what to keep, so that it can be a finer company that we can improve. So we're looking at participating in that facility and because it's now a government guarantee, we're taking a risk on the lending." Koroi said.

Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum detailed the loan structure in Parliament last week as comprising domestic borrowing (F$191.1m) and offshore borrowings (U.S$117.1m), or a total of F$455million spread over a three year period, effective May 30, 2020.

"Companies like ADB and all these international funding agencies are also looking to be part of that facility, so I think the message is: ok, two years is going to be tough but we need Fiji Airways to come out strongly for the future of the country," Koroi said, when asked about the likelihood that the national airline may not be able to pay anything in the first year since tourism is still crippled.

As revealed by Sayed-Khaiyum last week, $56.3 million is coming from FNPF while the rest will be borne by other local agencies including the Reserve Bank of Fiji and ANZ Bank.

FNPF, whose exposure in the tourism sector is around 16 percent, owns most of Fiji's major hotels and hotel properties in Fiji's tourist belt in Nadi as well as in Suva.

*Editor's note: This article was updated on June 5 after FNPF provided updated figures.

 

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