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Westpac Business Advantage CEO100 Survey

The results of the 2024 Westpac/Business Advantage CEO100 survey were published in March providing a mixed update on the outlook for the PNG economy. The outlook for profits was below average but more positive was that the outlook for employment and investment which were above average. Top business constraints included ongoing uncertainty around FX, law and order and unreliable utilities. These results are explored later in the pack.

IMF Funding

The next tranche of K450 million funding from the International Monetary Fund (IMF) maybe delayed due to the country’s failure to meet conditions set by the international lender. In providing the finance packed that was to be used to support the Government’s reform agenda, the IMF had set several conditions including; the furnishing of a report on the K500 million obtained for COVID–19 funding by December 31, to fill vacant positions board positions and Deputy Governor position at the Bank of PNG (BPNG), pass amendments in the Central Banking Act to reform BPNG to ensure it follows best international practice, and to adopt key implementing regulation related to the Independent Commission Against Corruption.

Puma Fuel Crisis

The National Executive Council of PNG has invoked Sections 2 and 3 of the Essential Services Act to direct Puma to continue to provide fuel and for BSP to continue to provide Puma’s with banking services for a period of one year.

Proposals now exist for the long–term supply of Jet A1 fuel which will see another supplier enter the market. However, there remains the issue of distribution and storage of product outside of Port Moresby and Lae to solve. There is a proposal for the Mineral Resources Development Company Ltd to acquire PNG Power land and construct two JET AI fuel tanks but the parties are yet to come to an agreement.

The Gold Corporation Act and National Gold Mint

PNG Chamber of Resources and Energy President, Antony Smare, said the proposed Gold Corporation Bill 2022 will have serious ramifications for the country. The Bill proposes giving the National Gold Mint, a privately owned entity, the sovereign authority to issue legal tender and thus exclusive rights to issue legal currency for the BPNG. Additionally, the Bill gives a related entity, the National Gold Bank, exclusive authority to hold gold and international reserves replacing the mandate currently held by the BPNG.

The Gold Corporation Bill 2022 is expected to be tabled by the Government at the May parliamentary sitting.

P’nyang LNG

The P’nyang LNG project took another step closer to fruition with the signing of the Fiscal Stability Agreement in Port Moresby by the Chief Negotiator Dairi Vele and developers Esso PNG P’nyang Limited (Exxon Mobil) represented by managing director Tera M Shandro, Jun Hosaka for JX Nippon and Sigurdur Jonsson sitting in for Santos country manager Leon Buskens.

Increased Air Connections for PNG

With the potential to improve international connections with Port Moresby, China Southern Airline is considering increasing the number of flights for their Port Moresby to Guangzhou route which currently runs on a weekly basis.

A New Trade Agreement

Papua New Guinea and the Republic of the Philippines have agreed to their first ever Trade Committee meeting to be held in Manila on June 17–18, 2024.

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