Sustained Private Sector-Led Growth Reform Program (Subprogram 2)

Specifically, Subprogram 2 aims to:
(i) Improve fiscal management – strengthen public financial management systems to ensure fiscal discipline, improve transparency, and make public services more efficient, which in turn provides businesses with greater certainty and confidence.
(ii) Strengthen state-owned enterprises (SOEs) and expand opportunities for private investment – enhance SOE governance, accountability, and performance; reduce fiscal risks; and open up more areas of the economy to private sector participation through reforms, divestment, and public–private partnerships (PPPs).
(iii) Enhance the business, policy, and regulatory environment – reform laws and regulations to make it easier to invest, trade, and do business in Fiji, including improving access to finance, strengthening dispute resolution frameworks, and reducing barriers to entry for businesses.
(iv) Support inclusive and sustainable growth – align reforms with Fiji’s National Development Plan (2017–2036) to foster inclusive socioeconomic development, create jobs (including for women), and ensure broader participation in growth.
(v) Advance gender equality – ensure women benefit from reforms through measures such as increasing representation of women on SOE boards, improving access to finance for women-owned businesses, and strengthening labor laws (e.g., maternity, paternity, and family leave).

Key policy actions for Sub-program 2:
1. Fiscal management - Pilot new planning framework, publish quarterly debt reports, and shift 75% of payments to digital.
2. Policy, legal and institutional framework for SOEs & PPPs - Pass Public Enterprises Bill, set up fiscal risk and guarantee frameworks, improve SOE board recruitment (with more women), and complete at least one divestment/PPP.
3. Business climate - To Approve investment policy statement, enforce Personal Property Securities Act regulations, implement WTO trade facilitation steps, circulate draft IP laws, and extend maternity/paternity/family leave.

Subprogram 2 policy gender actions comprised
(i) open consultation and gender analysis of the Public Enterprises Act 2019, validated by the Standing Committee on Justice, Law and Human Rights;
(ii) prioritizing the trialing of new planning frameworks by the Ministry of Women, Children & Poverty Alleviation to aid with service delivery, staffing, and planning requirements;
(iii) strengthening recruitment methods and merit-based appointments for SOE directors, leading to women’s increased representation on SOE boards;
(iv) improving women’s economic empowerment and access to finance through the issuance of regulations under the Personal Property Securities Act 2017, which enables lenders to more easily, cheaply, and securely accept movable assets as security for loans, which will particularly benefit businesses owned by women; and
(v) enacting new provisions in Fiji’s Employment Relations Act 2007 to support women in the workforce by extending maternity leave and introducing paternity and family leave.

1.) Overall, the program is rated SUCCESSFUL. The program design and modality are assessed as highly relevant at both appraisal and completion given:
I. program’s alignment with government and ADB strategies and plans,
II. appropriate prioritization and sequencing of reforms that address the binding constraints, and
III. responsiveness to emerging issues and opportunities, including gender equality and the COVID-19 shock.
The program is assessed as effective given
(i) sound results chain from policy actions to outputs and outcomes,
(ii) achievement of output and outcome targets, except for one outcome target which has been likely substantially achieved, but was not measured using the given indicator, Doing Business survey, since it was discontinued by the World Bank.
2.) The program is assessed as highly efficient, with only a slight delay caused by the onset of the COVID-19 pandemic, which was outside of the program’s control, but the improved development partner coordination led by the program supported efficiency by reducing transaction costs for the government.
3.) The program is assessed as likely sustainable, with all reforms remaining in effect and continued follow-through, progressing and deepening the multiple larger reforms under the P3F and successor program.
4.) The program is rated satisfactory in terms of its development impact given its positive impact on budget systems and institutions, productivity and competitiveness of SOEs, and creation of new businesses and formal job growth, including for women.
5.) The performance of the borrower and the MOE as executing agency is rated highly satisfactory given their strong leadership role, proactive engagement, and quick familiarization with the policy-based lending modality which was new to the country.
6.) The performance of the cofinanciers is rated satisfactory, with one policy dialogue coordinated and policy reform matrices aligned.
7.) The performance of ADB is rated highly satisfactory, with its notable lead role in bringing together development partners to provide well-coordinated and predictable budget support.

• 3 Modality/ Sources of Financing include: New Zealand Grant - Programmatic Approach Policy-Based Lending (Grant) USD 1.7 million | Ordinary capital resources (Regular loan) USD 65 million & World Bank (WB) USD 64 million together with a total of 130.7 million USD.
• Financial Instruments for the project include concessional loan and grant whereby, ABD regular loan and World Bank are (concessional loan) and Grant from New Zealand

Specifically, capacity building is targeted through:
1.    Public financial management
-    2.1.2 The Department of Public Enterprises conducted training programs for 76% of directors and 80% of senior management (defined as chief executive officer and chief financial
2.    SOE governance and PPPs
-    Improving board recruitment processes, including increasing women’s representation and Building skills for fiscal risk assessment and management of government guarantees.
3.    Policy and regulatory environment
-    Enhancing staff knowledge to implement Investment Policy Statement and related legal reforms and Training on WTO trade facilitation commitments and intellectual property law updates.
4.    Gender and inclusiveness
-    Capacity development for women in leadership positions in SOEs and participation in policy reforms such as - 2a. Training programs conducted for SOE directors and senior management, including at least 90% of women in these roles, on compliance