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Fiji’s Cabinet has given the go-ahead for the Government to adopt a strategy to safeguard the country’s fiscal position for the remainder of the year.
And the major focus is on implementing stringent control on spending patterns of State ministries and departments.
In his submission to Cabinet this week, Prime Minister and Finance minister Voreqe Bainimarama said it was vital for Government to adopt a prudent fiscal policy to cushion the impact of the global cash crisis, the January floods and the recent 20 per cent devaluation.
“Stringent control on spending must be maintained to allow for the achievement of medium – term fiscal targets of reducing the net deficit and maintaining public debt at manageable levels,” Bainimarama said.
He said the cash flow for the next eight months would be revised with the reallocation of 20 per cent of available funds for operating expenditures from the second and third quarter to the fourth quarter.
He said that the objective is to slow down spending patterns of Ministries and Departments, while monitoring revenue performance.
He added this strategy would require the Finance ministry to impose a number of restrictions through the Financial Management Information System (FMIS).
This he said, will include ceasing processing of cash-flow adjustments that allow ministries and departments to move funds from the subsequent months to the current month.
“The monitoring of the Agencies Inter-Departmental Clearance (IDC) Account balance will be intensified, by putting in place a ceiling on balances at the end of every month.”
Bainimarama said the implementation of this strategy would impose tighter controls on, and intensify monitoring of, operating expenditures on a monthly basis according to revenue receipts.
“It will also provide Government with the flexibility to meet productive capital expenditures and obligatory payments.”
