Photo: PNGX Chairman Mr David Lawrence receives the Securities Commission of Papua New Guinea approval from Acting Chairman Mr Robert Salmon-Minak and Mr James Joshua

PNGX, Papua New Guinea’s national stock exchange, has received formal reconfirmation of approval by the Securities Commission of Papua New Guinea to operate a stock exchange. The approval was Gazetted on 29 August 2022.

The Capital Markets Act 2015 (“CMA”) requires approval by the Securities Commission of Papua New Guinea (“SeCom”) for a person to operate a stock exchange.

PNGX has been operating the stock exchange since 1999 under a licence granted under the previous Securities Act 1997 which was replaced by the CMA. PNGX has been operating under transitional licencing arrangements since the introduction of the CMA in 2018.

“We thank SCPNG for issuing the new formal approval. Receipt of formal approval provides PNGX with certainty to continue to operate the market” said PNGX Chairman, Mr David Lawrence. “Just as importantly, it provides certainty to accelerate PNGX’s work to develop the country’s capital market and improve access to funding and investment opportunities for Papua New Guineans” he said. “We would like to thank SCPNG Acting Chairman, Mr Robert Salmon-Minak for his support for the development of the capital market.”

“This is the first approval issued by the Securities Commission since the introduction of the Capital Markets Act 2015 said Acting Chairman, Mr Robert Salmon-Minak. “It is appropriate that the first approval is for the country’s stock exchange. We are now progressively working towards licencing other financial service providers including stockbrokers, financial advisers and funds managers. This is an important step towards increasing competition for financial services and ensuring the quality of advice provided to Papua New Guinean investors” he said.

PNGX is continuing to work with SeCom towards the launch of its new corporate debt market. PNGX will also be releasing new equity market Listing Rules for public consultation in the near future. The ongoing work of the DEFINE Initiative (www.define.pngx.com.pg) is a stepping stone towards PNGX providing services for SMEs to access new forms of investment capital. SeCom’s approval assists all these projects.

Article courtesy of PNGX Markets Limited

EU-STREIT PNG collaborates with registered enterprises (nurseries) to sustainably supply quality cocoa seedlings in the Sepik region of Papua New Guinea.

The Food and Agriculture Organization of the United Nations (FAO), under EU-STREIT PNG Programme, in its mission to increase the production of high-quality cocoa that will improve the agribusiness of rural communities in the Sepik, signed agreements with over 30 registered nurseries and now these enterprises are distributing (CPB) pest-tolerant seedlings to the potential cocoa producers in the Sepik region.

The newly boarded partners have been already equipped with nursery set-ups by the Programme that meet PNG Cocoa Board standards. FAO also purchases and covers transportation cost of the supplied (CPB) pest-tolerant seedlings to target cocoa blocks. These partnerships provide opportunity for the nurseries to further nourish in PNG agri-businesses environment, being empowered to engage, provide and meet local demands for cocoa seedlings sustainably.

“We’re engaging farmer groups as service providers to deliver seedlings to their members including youths and women. The FAO under the Programme will purchase these seedlings at the rate of between K3 and K4 per seedling. Transport cost for distribution to farmers who live far from the nursery sites will be paid as well,” explained National Cocoa Production Officer Mr Michael Lames.

“Payment will be made upon satisfactory completion of deliveries that will be followed with field verification where seedlings are actually planted into the ground. The money paid into the groups’ respective bank accounts is to support their operation as a business for the benefit of their members,” added Mr Odrick Urum, the FAO-STREIT Cocoa Production Officer.

Another benefit under this collaboration is the capacity building of group leaders to learn and adopt recommended practices for running agribusinesses. “It is an exciting opportunity for us to learn some new things like how to operate as a service provider which requires quality delivery on a set period or time,” said Mr Wilfred Mombiang who represents a registered farmers group of Saure Village, in Wewak District, that are supported under the Programme. 

The Programme has already built the capacity of nursery owners as well as the producers in efficient cocoa cloning, budding and block management and now the Programme take a new step to connect two critical nodes along cocoa value chain by supporting and facilitating the distribution of high-quality inputs from nurseries to cocoa block owners. All these initiatives are part of the EU-STREIT Programme broader workplan to strengthen all cocoa value chain actors.

Highlight of Cocoa for Papua New Guinea

The Papua New Guinea, and namely the Greater Sepik region, has excellent agro-ecological potentials to produce valuable agricultural economic crops, including cocoa, and to further downstream agri-businesses activities development.

Cocoa production provides jobs and income for the rural population, which remains predominant throughout Papua New Guinea. In the main regions of production, around 30% of households produce cocoa, while representing 15% of the number of households at the national level.

Around one million people’s livelihoods depend on cocoa. Cocoa in PNG is estimated to grow on 130,000 ha in coastal provinces, as a monoculture or intercropped with coconuts or other food crops.

However, this potentiality mostly remained untapped or under-developed, mainly due to lack of sufficient investment, support and capacity, and insufficient infrastructures, leaving the Sepik region less equipped with resources to progress toward sustainable economic development.

The EU-STREIT PNG, as a UN Joint Programme (FAO as leading agency, and ILO, ITU, UNCDF and UNDP as partners), is the largest grant-funded Programme of the European Union in the country and the Pacific region. Being implemented in close cooperation with the National and provincial government institutions, research entities, civil society organizations, and private sector enterprises, the Programme aims to help improve the lives of the people from East Sepik and Sandaun provinces, by focusing on increasing sustainable and inclusive economic development of rural areas through improved economic returns and opportunities from cocoa, vanilla and fishery value chains while strengthening and improving the efficiency of value chain enablers, including the business environment, and supporting sustainable, climate-proof transport and energy infrastructure development.

EVERYONE’S A WINNER: Mr Gerea Aopi, CBE – PNG Cancer Foundation Chairman and Mr Leon Buskens, Santos Country Chair, PNG along with Team Southern Cross Assurance Limited, winners of the Santos 2022 Corporate Golf Challenge.

The Santos 2022 Daffodil Corporate Golf Challenge with the tremendous support of the business community has raised more than K160,000 for the Papua New Guinea Cancer Foundation (PNGCF). 

Forty teams registered in the annual charity event held at the Royal Port Moresby Golf Club on Friday, 02nd September 2022 with Southern Cross Assurance Limited crowned the Daffodil Cup winners.

Santos Country Chair, PNG, Mr Leon Buskens said, “This is the inaugural event under the merged entity of Oil Search and Santos. Santos is proud to continue the support towards cancer education and awareness which can potentially save lives.”

Santos is looking to collaborate more in the prevention of cervical cancer which is the most common cancer in women in PNG. “One low hanging fruit is vaccination against the Human Papilloma Virus (HPV). 90% of cervical cancers are caused by HPV and so to prevent cervical cancer including penile cancer in men, HPV vaccination is most needed. In our various capacities as well, we must challenge the status quo that makes sexual education a taboo subject in some cultures. It will take a more strategic and collective effort from every one of us to overcome this burden.”

“And so, I acknowledge the many companies including individuals who are here, demonstrating their commitment in the fight against cancer through their support of the annual Daffodil campaign. I also congratulate Southern Cross Assurance Limited for being crowned winners of the Santos 2022 Daffodil Cup,” said Mr Buskens.

The Santos 2022 Daffodil Corporate Golf Challenge was held in fond memory of the Late Mr Willie Kupo, who contributed immensely to the success of the charity event. Chairman of PNGCF, Mr Gerea Aopi, CBE led a minute of silence before the official tee-off for Late Mr Willie Kupo including the Late Chief Jacob Luke who was heavily involved in the work of the PNG Cancer Relief Society.

The Santos-funded golf event has been an annual activity on the Royal Port Moresby Golf Club’s charity event calendar since 2003. The annual golf day is hosted by PNGCF under the Daffodil Campaign to encourage individuals to make healthy lifestyle choices to reduce their cancer risk and to inspire the message of hope for a healthier Papua New Guinea.

The Australian government has signed a new five-year deal with foreign fisheries agencies to address illegal fishing in the Pacific region including Papua New Guinea waters.

This was revealed by Australian Foreign Affairs Minister Penny Wong in response to questions on illegal fishing. Wong, who was on a three-day visit, said that access to sovereignty around fisheries was critical in the region.

“Access to fisheries around sovereignty is a critical development and economic and food security benefit for the nations of the region and PNG,” she said.

“Fisheries is critical to people’s livelihoods for prosperity and critical to food security,” Wong said as development and climate change progress continued there would be more pressure on fisheries.

“We are going to see more and more pressure on fisheries and there will be more and more sovereignty questions raised.

“We have signed a new five-year deal with Foreign Fisheries Agencies.

“The Pacific Island focus is on this and we’ve worked with World Trade Organisation with Pacific Island nations to reduce subsidies for illegal fishing to protect people’s value in the exclusive economic zone.”

Wong said that the Pacific Island Fisheries Forum Agency had increased aircraft monitoring as well.

“In governments, we have committed to doubling aerial surveillance through the Pacific Island Fisheries Forum Agency to combat illegal fishing.

“We are also committed to providing fast patrol boats another additional one to the boats being delivered.

“We understand illegal fishing is a big issue for PNG and for the region,” Wong said.

Reference: Tarawa, Helen. The National (1 September 2022). “New five-year fisheries deal sealed”. 

Photo: Philip Samar 

According to the PNG Chamber of Mines and Petroleum, the government must make greater efforts to safeguard the economy by encouraging exploration to find new projects in the resources sector.

Chamber Vice-President Philip Samar said that the resource sector has made direct contributions to the government totaling K2.9 billion to State-owned enterprises, K1.2 billion in taxes, K1 billion in royalties, K637 million in fees and levies to state agencies, and K444 million for social projects in impacted communities. These figures are based on the most recent data from the 2019 EITI country report.

The majority of the current mines, according to Samar, are mature, although a few only handle lesser grades and have a relatively short lifespan.

“PNG has had a very significant drop in production from our major exports over the last three years,” he said.

“Gold was down 40 per cent due to the closure of Porgera, copper down 55 per cent and nickel down 15 per cent.

“While this has been significantly offset by increased commodity prices, this is a worrying trend that must be addressed by doing more in the exploration stage to ensure the discovery, development, growth, and continuity of the mining sector in PNG.

“This does not measure the multiplier effect which adds further to government contributions, suppliers and contractors with every mine employee also contributing to the economy when spending their wages,” Samar said the multiplier effects were greater when there was a major construction project occurring.

“This has a great significance when we consider how our economy recovers from the Covid-19 induced weakness over the next five years with the Porgera restart, Wafi Golpu, and Papua LNG approvals, and the Kainantu mine expansion all expected to occur during this period,” he said.

Reference: The National (1 September 2022). “Promote exploration, govt told”.

Photo: Ok Tedi Mine

According to the Chamber of Mines and Petroleum, the resources industry contributes 39% to the nation's gross domestic product (GDP).

As current mines near their end of life, such Ok Tedi, which will stop operating by 2030, vice president Philip Samar said exploration was essential for the industry's survival.

“Exploration is a high-risk business with a failure rate of 99 per cent,” he said.

“For every 1,000 exploration prospects, only 50 will move to advanced exploration followed by only two that will move to feasibility studies and only one will become a mine.

“Ramu took 50 years from discovery to development while Lihir, Porgera and Ok Tedi took just under 20 years plus a very significant amount of investment and expertise, so we need to act now to revive the exploration sector or the next 50 years will be bleak with no new mines for development.”

According to data from the Mineral Resources Authority (MRA), exploration licences were issued for the whole nation in 2011 alone.

With only a few exploration licences active in 2022, all of these operations have already ceased.

Samar stated that the chamber was dedicated to working in collaboration with the government to solve the crucial factors required to promote exploration and mining, such as:

• PROSPECTIVITY;
• CLEAR legal authority;
• SECURITY of tenure and transferability of exploration and mining rights;
• EXCLUSIVITY of exploration and mining rights;
• NON-DISCRIMINATION between local and foreign nationals;
• PREFERENTIAL right to convert an exploration licence to mining licence;
• REASONABLE royalty rates;
• TRANSPARENT licensing procedures;
• CLEAR and uniform policy on government ownership; and,
• PROTECTION against speculation.

Reference: The National (2 September 2022). “Exploration crucial for mining”.

August 30th commemorates 21 years since the 2001 Bougainville Peace Agreement (BPA) was signed between the Government of Papua New Guinea and the people of Bougainville to cease hostilities in the Bougainville Civil War.

Bougainville President Ishmael Toroama said the BPA is a joint creation between the GoPNG and the Autonomous Bougainville Government, which is an extension of the people of Bougainville.

President Toroama said the implementation of the provisions the Peace Agreement are focused on Weapons Disposal, Autonomy and Referendum for independence that both governments must adhere to and strive to implement.

“We have gone passed weapons disposal and we are nearing final stages of autonomy as Bougainville completes the referendum process by way of ratification by the National Parliament,” President Toroama said.

“The amendments to Part 14 of the Papua New Guinea Constitution gave way for the referendum for Bougainville’s independence. The amendment was a guarantee to appease the people of Bougainville’s yearning for self-determination and to end the hostilities,” President Toroama said.

“If the amendments to Part 14 of the PNG Constitution were never passed, the Bougainville Crises would never have been resolved. It was through compromise and a latent need for peace that allowed leaders from both sides to sign the Bougainville Peace Agreement,” President Toroama said.

Since the inception of the Autonomous Bougainville Government in 2005, there have been issues on the implementing the autonomous arrangements for Bougainville.
Most of these issues revolve around financial constraints and capacity issues to develop fiscal self- reliance and a more decentralized governance structure within the ABG.

The failure by the National Government to address these issues has further isolated the people of Bougainville that was evidently displayed during the 2019 Referendum where an overwhelming 97.7 percent opted for political independence from PNG.

Despite these shortfalls President Toroama is committed to Bougainville’s independence mission.

“We have gone passed the period of autonomy as Bougainville now prepares for independence through the consultations and roadmaps with the National Government,’’ President Toroama said.

“I remain optimistic of the future and look forward to building a positive relationship with the 11 th Parliament of Papua New Guinea as we implement the BPA to settle the Bougainville issue once and for all,’’ President Toroama said.

Photo credit: PNG Chamber of Mines and Petroleum - Stephen Quantrill

The Pasca A gas project's developer, Twinza, is prepared to collaborate with regional members of parliament to identify and reap the community advantages of the Pasca Development project.

Stephen Quantrill, the executive chairman of Twinza, stated as much at a briefing for the PNG Chamber of Mines and Petroleum during the Members of Parliament Induction.

According to Mr. Quantrill, Twinza anticipates that the project would create 300 direct and indirect employment in PNG during construction and that this figure will rise to 500 once the facility is up and running.

He said that the business will aim to have PNG citizens fill 90% of these positions.

“Twinza will introduce training programs to give the maximum number of Papua New Guineans the opportunity to work on the project and its supporting industries,” he said.

Mr. Quantrill gave an update on the Pasca development, which, according to the business, could be operational and begin paying the government the planned K500 million in direct revenue annually by the conclusion of the current legislative session provided the required permissions are granted this year.

The project will open up the economic development of neighbouring found and potential resources, and it is anticipated to contribute more than K18 billion to Papua New Guinea's GDP throughout its lifetime.

The project sits 95 kilometres off the coast of Kerema in the Gulf of Papua, 93 metres below the surface of the ocean.

Mr. Quantrill stated that the project is prepared to go into FEED as soon as the gas deal is finalised, signed, and approved, which the business stated is set to happen this year.

Reference: Post-Courier (2 September 2022). “Pasca Project Targets 90 Per Cent Of Jobs For Nationals.”

Small and medium-sized businesses have received export orders totaling more than K7 million (US$2 million) as a result of an ongoing commercial collaboration between the British and PNG governments.

Keith Scott, the British High Commissioner to PNG, made this statement in response to Prime Minister James Marape's appeal for investors to consider the agricultural industry.

He stated that he wants to advance direct business support that benefits the economy, jobs, and rural regions of Papua New Guinea.

According to Mr. Scott, there is a lot happening in the agricultural sector, as evidenced by the fact that coffee and New Britain Palm Oil's biggest export markets are Liverpool and the United Kingdom.

“That’s essentially what we are looking to expand and promote but we’re looking very much at the technical level assistance that feeds directly down to PNG producers,” Mr. Scott said.

“We did some work last year with Commonwealth and Standards Network helping PNG establish internationally recognised standards and again that will help facilitate trade. So we’re looking to help PNG and facilitate trade to the UK, Commonwealth, and beyond and hopefully meet a lot of the objectives that the Prime Minister set out.

“We’re looking for areas where the UK has specific expertise that can meet the needs of PNG.

“Forestry is a good example we have a market project on sustainable forestry which we are setting up in the next couple of weeks. Which is to do a study to help PNG Forest Authority look at how we commit better use of all the trees, that’s the sort of technical expertise we want to give the PNG government a number of options and that’s the data that the PNG government can use and decide how to set policies.”

Reference: Yafoi, Melisha. Post-Courier (2 September 2022). “K7 Million In PNG Coffee Export Orders From UK”.

The Central Bank has been encouraged to take action and resolve the problem of the country's businesses having a backlog of foreign exchange, according to Prime Minister James Marape.

“We’ve reached a K11 billion threshold as far as Forex is concerned. We work to ensure we bring in additional liquidity into the market and so Mr. Popoitai (Central Bank Governor) and those in the financial sector, let’s free up the space and allow free flow so that especially those that are traditional and key importers/exporters, business players in our country get their share in the queue much better and faster,” he said.

Mr. Marape was replying to inquiries regarding the government's goals for addressing issues including market forces' access to foreign exchange from Ian Tarutia, head of the PNG Chamber of Commerce and Industry.

While it is encouraging news that the government would concentrate on changes to boost trade and investment, particularly in the manufacturing, agricultural, and natural resources sectors, Mr. Tarutia stated there are still issues that need to be resolved.

The availability of foreign exchange and the high cost of the internet as a result of wholesale market inequalities, he claimed, as well as recent import duty costs and retrospective fines and penalties, have an impact on ordering goods for finished goods like biscuits, noodles, and stock feed, some of which are exported abroad.

Mr. Marape asserted that there is no free flow of funds to consumers from the bank and urged the Central Bank to collaborate with commercial banks to find a resolution to this problem.

“Having K11 billion in the Central Bank is enough to cover for nine months of forex coverage in our country,” he said.

“I just want us to liberate that space. Let’s liberate that space for that our businesses and are functional instead of having a long queue.

Something that I will be interested to look at. I want your advice to the bank and the government and hopefully (working) together we can alleviate this problem.”

Reference: Post-Courier (31 August 2022). “Central Bank Urged To Address Forex Issue”.

According to Peter Laden, managing director of ExxonMobil PNG Ltd, there are major sources of LNG (liquefied natural gas) supplies outside of Papua New Guinea (PNG).

According to Laden, PNG presently accounts for 2% of the market for LNG, which produces eight to nine million tonnes annually.

“In the future, even after Papua LNG, we will still represent about two percent of the global LNG market as a number of new projects come online in the coming years,” he said.

“We are challenged and fighting for a limited amount of global capital to advance the next trench of projects here in PNG.

“That’s why we are all here with the common objective, we want PNG on the map and we want to advance the resources here in a responsible way.”

Laden acknowledged the benefits of the nation's competitiveness.

“Specifically, proximity to Asia where the majority of our customers are is a true advantage.

“This is a true advantage with shorter shipping routes to South East Asia at this point in time and it is also one of the global greenhouse competitive LNG projects already.

“So when future investors and lenders look for future opportunities, they will start from there.”

Commenting on exploration, Laden said this year that ExxonMobil was conducting its own seismic campaign and building on over US$2 billion (K6.9 billion) in exploration investments since 2010.

“We are very active in the exploration space but we are going to need to work together to advance the exploration potential in this country.”

Reference: Pacific Mining Watch (29 August 2022). “PNG gas competing on global supply market, says exec”.

Photo credit: TotalEnergies 

According to an official, Papua New Guinea would gain K86 billion from the Papua LNG project throughout its lifetime.

Jean-Marc Noiray, managing director of Total Energies PNG Ltd, made the comments at the induction ceremony for new lawmakers in Port Moresby. He said this when acknowledging the country’s laws and regulations that governed resource projects as some of the best in the world.

Local laws, according to Noiray, recognised landowners and gave the State and its citizens a powerful role.

“From a regulatory point of view, we have done all that was needed, we have the gas agreement which secures the fiscal and regulatory terms,” he told MPs.

“They are stabilised in a fiscal stability agreement with all the amendments that were required. So we are ready to go.”

According to Noiray, during the course of the project's existence, the State would collect between 50 and 55 percent of its worth.

“The higher the price of the gas, the more the shareholders are going to get,” he added.

“The direct value going to the State we reckon will be in the order and value of US$25 billion (K86 billion) over the life of the project.

“Just half of that is direct from what the developer will pay in terms of income tax than we have other direct taxes that will be paid, the workforce for example which we reckon is in US$3 billion (K10 billion) and indirect benefit in the order of US$8 billon (K27 billion) going to the country.

“All those numbers, we will round them up and will be in the file that we will give to the authorities to try to get our different licenses.

“We are keen to start contributing big to the country and to help the country and its citizens and local communities.”

Reference: Pacific Mining Watch (29 August 2022). “Papua New Guinea getting K86 billion from gas”.

The clean green energy projects initiative being championed by Papua New Guinea Prime Minister James Marape moves one step closer to take-off as he met the second time this month with Fortescue Future Industries South-East Asia President Allard M. Nooy in Port Moresby today (August 29 2022).

The Prime Minister used this opportunity to connect the company directly to the Government’s working team to get the project off the ground, which he wants to see happen within 2022 and 2023.

The meeting follows from the first PM Marape and Mr Nooy held in Singapore earlier this month during the PM Marape’s short visit to the country some days after his election.

At the meeting this morning, Prime Minister Marape reassured Mr Nooy that he stood ready to speak at the high-level arena, while directing the State Negotiating Team to work with the company in processing the mechanisms needed to get the first project off the ground. The Prime Minister also committed the relevant agencies of the State to assist FFI progress this work immediately.

PM Marape then came in strong with his reassurance that at the high-level, he would speak with the founder and owner of the company Dr. Andrew Forrest and proceed in making connections to markets in countries that have existing bi-lateral relations with Papua New Guinea.

He highlighted Papua New Guinea’s strategic location in relation to the economies of both ASEAN (Association of South East Asian Nations) and APEC (Asia Pacific Economic Cooperation) nations, many of whom already have existing bi-lateral ties with PNG.

He said with very high populations in these countries and PNG having all the right conditions to produce energy and food, the country was appropriately placed to contribute to both energy and food security in the region.

PM Marape said: “At the high-level, if you want someone to market these things for you, our Government can market for you using the bi-lateral connections. We have strong relationship with China since 1975; with US at the bi-lateral level, with South Korea, India, Indonesia, Malaysia. These are big economies.

“We are rightly placed to advocate for green energy. That is our competitive advantage. African nations do not have this; they are too far but we are right here. And we are here to support you.

“We are ready to assemble a team. So by 2023, we not in concept anymore but get some project going.”

PM Marape once more reassured the company on the opportunities available in Purari River, Gulf Province and the geothermal springs of West New Britain Province where the company has already established working sites based under two heads agreement signed between the State and FFI last year.

The meeting, held at the Prime Minister’s office at Sir Manasupe House, was attended by Minister for Petroleum and Energy Hon. Kerenga Kua; Governor for West New Britain, Hon. Sasindran Muthuvel; Member for Rabaul, Hon. Graham Pinau Rumet; and Head of the State Negotiating Team Dairi Vele. President Nooy was accompanied by FFI PNG representative, Andy Hetra.

Article courtesy of PM James Marape News Page

Photo: Minister Wong and PM Marape during their meeting in Port Moresby.

Prime Minister Hon. James Marape recently (August 29 2022) welcomed Australian Foreign Affairs Minister Hon. Penny Wong to Papua New Guinea.

He welcomed Minister Wong during a meeting with her and her delegation in his office in Port Moresby.

PM Marape was accompanied by Minister for International Trade and Investment Hon. Richard Maru.

“Welcome to Port Moresby and I look forward to seeing you on many more visits in the future,” PM Marape told Minister Wong.

He said that whether it was a Labour or Liberal Government, the bilateral relationship between Australia and PNG was always at an excellent level.

PM Marape said after 46 years, it was now time to diversify the relations to a more business and commercial one, and called for more trade and investment relations to make PNG less dependent on Australian and eventually phase out Australian Aid.

He said a secure and prosperous PNG would enable a safer region and a prosperous Australian economy.

PM Marape said increased people-to-people relations at all levels was vital and looked forward to an official visit to PNG by PM Albanese before the end of this year.

Minister Wong, in response, recognized the Marape Government’s strong desire to strengthen PNG’s economy and affirmed Australian Government support in assisting through its various development assistance programmes.

Article courtesy of PM James Marape News Page

Prime Minister Hon. James Marape Hon. James Marape says “the story of our country is not bad” as many make it out to be.

He said this today (August 31 2022) when welcoming the 2022 Mid-Year Economic and Fiscal Outlook (MYEFO) presented by Treasurer Ian Ling-Stuckey which highlighted the fact that the Papua New Guinea economy was on the rebound.

PM Marape predicted that by 2027, the Budget would be in surplus, and by the mid-2030s PNG would have paid off all its total sovereign debt on its way to becoming a K200 billion economy.

Among the good news for PNG:

• The latest MYEFO figures have the PNG economy growing by the largest Kina amount in history – from K82.6 billion in 2020 to K92.6 billion in 2021 and K110.3 billion in 2022. The K27.6 billion increase in the economy over the last two years is more than double the K12.4 billion increase in the economy during 2014 and 2015 as the PNG LNG Project started.
• Treasury estimates that inflation will average 6.2 per cent in 2022 after incorporating the lower cost pressures by removing fuel taxes, assistance to lower the price of flour, rice, tinned fish and Ox & Palm; and lower education costs from the School Project Fee subsidy. The MYEFO forecasts that inflation rate will drop down to 5.6 per cent in 2023 and continue declining.
• The MYEFO forecasts an increase in revenue from K13.67 billion in 2021 to K17.07 billion in 2022 – which is a 23.1 per cent increase on revenue outcomes in 2021. Not only was the ambitious revenue target of K16.19 billion surpassed, it was exceeded by K875.8 million; and
• PNG’s debt to GDP ratio in 2022 will not fall from 53.3 per cent down to 49.1 per cent, which is even lower than the 51.6 per cent in 2021.

“At the macro level, the story of our country is not bad,” PM Marape said.

“Our country has been travelling on a positive road thus far.

“In 1975 our economy was a K5 billion economy, in 2011 it was K44 billion, in 2018 it was K79.6 billion.”

PM Marape commended Treasurer Ling-Stuckey for a sterling performance over the last three hard years.

“Despite many criticisms, he (Ling-Stuckey) has ensured our short-term measures to keep MV PNG floating, in tough waters, are paying off.

“Over the last three years, we have climbed from a K79.6 billion economy of 2018, to an International Monetary Fund (IMF) forecast of K110 billion by the end of this year.

“The thermometer, in as far as our economic expansion is concerned, is rising while similar countries as ours may have regressed.”

PM Marape stressed that there was a lot more work in the short, medium and long terms to be done by everyone in the country.

PM Marape said Porgera Mine, P’nyang LNG, Papua LNG, Pasca LNG and Wafi-Golpu Mine should be progressed as a matter of urgency.

“Short term measures include bringing back Porgera at the earliest,” he said.

“P’nyang LNG will run at the back of Papua LNG construction, so instead of just a four-year construction period like the PNG LNG from 2011-2013, P’nyang and Papua will be constructed over an eight-year period.

“That will mean a windfall economy as a result of construction from 2023 right up to possibly 2031.

“We will make a concerted effort to consult all landowners and all provincial governments in Gulf, Western and Enga provinces for these projects.

“The smaller Pasca Project, the easiest, lowest-hanging fruit, will be reactivated and that will hopefully by concluded at the very earliest.

“I am very keen to work with the Morobe Provincial Government, and Governor Hon. Luther Wenge, on the much talked about Wafi-Golpu Project.

“These five projects will be progressed over the next 10 years and give us the window for a K200 billion economy as I have been targeting.

PM Marape warned the country of the “lazy man expectations” that money from oil gas and mining would have a permanent solutions to our economy.

“Far from it, and I liken that mindset to those on steroid drugs, needing boosts all time,” he said.

“The dependency on the boom-and-bust of the petroleum and mineral sector must stop and the country must shift to the sustainable renewable sector of our economy.”

PM Marape said everyone should work hard over the short, medium and long term.

“The hard work starts today,” he said.

“Everyone must contribute to the growth of our country, and when you contribute, you receive services.

“We must start mobilising our people to get into agriculture, forestry, fisheries and other small businesses.

“Our people own land, and bringing markets to them will ensure all of them participate in the sustainable part of our economy.”

Photo: New Office - Nambawan Super Building - Top Town

FinCorp embarks on a transformation program as it commences a nationwide branch upgrade that will incorporate the newly revitalized Fincorp brand. The roll out commences with the relocation of the Lae branch, to the Nambawan Super Building, Section: 49, Allotment: 3 – 7, Office 4, Lae, Morobe Province.

FinCorp first opened its Lae branch doors in 1998, where the Milfordhaven Road branch, was positioned to service the Lae clientele. Since then, Lae has expanded, the township has grown and so has FinCorp’s loyal customer base. ” As our customer needs continue to evolve, it’s important that the FinCorp brand reflects our commitment to grow with our customers.  Our new facilities offer a more convenient and accessible location to our customers and easier access to our friendly customer service staff,” CEO Fincorp, Brett Tayler.

 Old Office - Milfordhaven Road

The new Fincorp facilities in Lae Top town will cater for a larger customer service area and boasts greater space and privacy. “Fincorp has been servicing the people of Morobe province for over twenty years, so It’s timely and fitting, that we launch the first FinCorp rebranded modernized facility, here in Lae. Our new facilities will offer our customers and staff a professional and inclusive zone, where our customers’ needs can be discussed privately and in comfort. ” CEO FinCorp, Brett Tayler.

About FinCorp

FinCorp is a licensed consumer and commercial financial Institution, in Papua New Guinea, offering a range of financial services catering to a wide variety of lifestyles and market segments. FinCorp has branches in Port Moresby, Mt Hagen, Goroka, Kokopo and Lae, complimented by an extended Agent Network.

Photo: Kina’s CEO and Managing Director Greg Pawson

Kina has today announced an NPAT of PGK 45.6m an increase of 15% compared to the prior corresponding period (PCP). Kina’s 1H22 results reflect strong revenue growth and ongoing progress against the key strategic priorities of the Group. Kina remains committed to delivering improved returns by growing market share organically, disciplined expense management and a prudent approach to maintaining a resilient balance sheet. Revenue growth was evident across both net interest and non-interest income. Net interest income grew by 8% against PCP due to solid lending performance in SME and home lending. In non-interest income, merchant facility fees and FX income contributed to the 34% increase against PCP. 

In good news for shareholders, The Board has declared an unfranked half year dividend for the H122 of AUD 4.1 cents per share/ PGK 10.3 toea per share.

Kina’s CEO and Managing Director, Greg Pawson said the result demonstrates top line growth momentum, execution of our digital initiatives and a solid start to lending for the half.

“Over the past 6 months we have continued to build out our organic growth strategy. Increasing market share in our targeted segments remains the focus for 2022 supported by a robust balance sheet that ensures profitable growth. Underpinning revenue momentum is a disciplined approach to deliver customer-led digital solutions. The Launch of our ‘Single View’ is a market first in PNG. Single View enables customers to access their superannuation balances via Kina’s online banking channel.”  Other key achievements for the half were:

• New customer segment propositions Kina PRIME PLUS (home loans), Kina Private (mass affluent), Kina Venture (SME)
• Established a Corporate Advisory Services Unit
• Expansion of Business Banking footprint to key provincial centres
• Implementation of customer analytics and artificial intelligence for AML and transactions monitoring
• Several Key payment partnerships such as Pei Beta and Xero,
• Digital channels income up by 92% and scheme card growth of 138%
• Implemented Environment and Social Management System for commercial loan origination (in partnership with Asian Development Bank)
• Development of the ESG strategy and objectives for implementation over H2 2022
• Expansion of MiBank financial inclusion partnership including the first co-branded branch in Alotau, Milne Bay province

Performance snapshot:

• Increase in NPAT by 15% to PGK 45.6m. 
• Loan book growth of 5%, to PGK 2.05b.
• Net Interest Income increased by 8% to PGK 92.5m, compared to PGK 85.4m in the PCP.  
• Foreign Exchange (FX) grew by 10%.
• Fees and Commissions increased by 34% against PCP due to the ongoing expansion of Kina’s digital channel network.  
• Cost to income increased 2% compared to PCP due to non-recurring expenditure in capability projects and initiatives targeted to drive sustained efficiency.
• Kina’s Funds Administration business recorded NPAT of PGK 4.4m, with revenue growth of 12%.
• The Funds Management business grew by 5% in total funds under management (PGK 5m).

Banking – Lending growth of 5% 

The lending portfolio delivered solid results across Home and Corporate Lending. Home lending grew by PGK84.3m, representing 10% growth on the PCP with housing loans contributing 41% of loan book growth. Business lending experienced growth in Term and Asset Financing loans, Agriculture sector, with expectations for higher growth in the second half of the year – something is missing here. Deposits grew 12% over the past 6 months largely attributed to an increase in fixed term deposits resulting in a lengthening of the balance sheet duration. Net Interest Margin reduced to 6.2% due to a lower yield in government securities, strong growth in corporate deposits supporting a strong lending pipeline and acquiring additional share of customer transactional banking including FX and a deliberate strategy of participating in corporate lending.

Funds Administration - Revenue growth of 12%

Kina’s Funds Administration business recorded NPAT of PGK 4.4m, with revenue growth of 12% compared to PCP generated from improved value add services to superannuation clients. The Funds Management business grew by 5% in total funds under management (PGK 5m), maintaining Kina’s market share in this sector.

Strategy and Outlook

Kina’s purpose is to constantly improve the prosperity of the people, communities, and markets it serves. The bank achieves this by being the most dynamic, progressive, and accessible financial services organization in the Pan Pacific. To deliver on our purpose the bank developed a series of priorities.

Kina is on track to deliver against its 2025 strategic plan. The plan will continue to drive organic growth in the core banking business and a leading edge digital customer experience, focused on organisational sustainability and corporate responsibility.  Kina aims to continue its current trajectory of pursuing targeted market growth, customer service excellence, digital on-boarding and transactional processing, and strategic partnerships to extend our network coverage. These initiatives include:

• Home loan and SME growth in key target segments
• Digital onboarding through Electronic Know Your Customer (E-KYC)
• Enhancing data capabilities to proactively manage risk
• Building a workforce capability that reflects our strategic requirements.
• Embedding our ESG strategy through our Environment and Social Management Systems.

Mr Pawson said the growth agenda remains our key focus in the second half.

“Our aspirations to be the most sustainable leader in PNG will drive our agenda. Our regional branch expansion and appointment of additional business advisors will support our growth targets, efficiency initiatives will improve our expense base and creating a dynamic workforce with a digital mindset will set Kina up to deliver prosperity for our communities”.

The Pasca A offshore gas project in Gulf will go ahead once the gas agreement is signed and the petroleum development licence (PDL) is approved, says developer Twinza.

Robert Gard, the chief executive officer of Twinza, made the statement while attending the recent induction ceremony for the 11th National Parliament in Port Moresby.

“We are awaiting finalisation and signing of the gas agreement and approval of the petroleum development licence.

“We are ready to proceed with front-end engineering and design (Feed) and project financing arrangements,” he said.

The 95 km offshore Pasca A offshore gas project is located in 93 m of water.

It was found in 1968, and Twinza bought it in 2011.

After conducting a rigorous subsurface evaluation programme, Twinza submitted for a PDL in 2015.

Pasca A possesses more than 70 mmbbl (million barrels) of liquefied petroleum gas and condensate in addition to 0.33 trillion cubic feet of recoverable dry gas. The project's advantages include:

• K500 million per year to the State (tax, levies, royalties);
• K8.6 billion revenue to PNG over the life of the project;
• K18 billion contributions to the gross domestic product over the life of the project;
• K400 million per year spent in PNG annual operating costs; and,
• 300 construction and 500 permanent jobs in PNG both direct and indirect.

According to Gard, around 70 local businesses have already been named as service providers for the continuing project.

“Direct jobs include offshore, supply base and office workers such as operating, maintenance, onshore support, marine support, catering staff, management and office support,” he said.

“Indirect jobs include security, airline operations, hotel and transport, meals and catering supplies, spares and materials supply, helicopter logistics, training and professional services.”

The Pasca A liquids-rich gas field in the Gulf of Papua is being developed by Twinza, an Australian upstream energy firm. The business has been operating in PNG since 2011 and has committed more than K350 million to thoroughly assess the market.

Its creative development strategy and design are now prepared for implementation.

Twinza is supported by financially sound and helpful investors and has offices in Port Moresby, Perth, and Singapore as well as a skilled staff of experts.

Reference: The National (25 August 2022). “Twinza: Projects await signing”.

Photo credit: PNG Tourism Promotion Authority

The PNG Tourism Promotion Authority is still encouraging travellers from all around the world to come to PNG.

This was made known at the beginning of this month at the week-long roadshow, The Treasures of the Pacific, a tourism-focused event held in many Australian cities, including Brisbane, Gold Coast, Melbourne, and Sydney.

Alice Kuaningi, the marketing director for TPA in PNG, and Simon Dari Pih, the marketing officer, participated in the roadshow, which began in Brisbane and finished in Sydney a fortnight ago.

Richard Skewes, the host event organiser, was pleased with how PNG was represented at the occasion and said that it was nice to see PNG participating in the road show with other Pacific Nations.

“This is the first time in two years to showcase in person all of the South Pacific Products and its treasurers and is possibly be the first time in a long time PNG actually came out with its representatives unlike others which is wonderful,” Mr Skewes said.

According to him, this is a yearly event that aims to enlighten and educate travel agents on travel and tourism in other nations.

“More importantly to tell the people around the world that the Pacific Island countries are now open to receive tourists and people alike that needed time and break away from all that is happening around them,” Ms said.

Travel brokers were told by Ms Kuaningi that PNG is a fascinating nation that may make a vacation trip unforgettable.

“It was short timing to show and tell the World about our beautiful country but they were all impressed,” Ms Kuaninigi said.

“Our primary objective is to come out here and inform our partners that our borders have opened up, we are now ready to receive tourists again.”

Mr Skewes said: “It is important to start conversing with the travel trade partners and convince them that PNG is ready to receive tourists after the long delay caused by COVID-19 travel restrictions.

“Our tourism operators, hotels and airlines depend on business and leisure travellers to keep their business operating.”

Reference: Teme, Kevin. Post-Courier (August 25, 2022). “PNG Attends South Pacific Roadshow”.

Photo credit: Kumul Petroleum - Ila Temu

The government must now think about creating a strategy to facilitate the raising of equity capital for fresh resource projects.

Dr Ila Temu, country executive director for Barrick Niugini Limited, stated that one of the major challenges that have to be resolved is the financing of equity for resource projects in the nation.

According to him, in the early going in Porgera and Lihir, they were able to secure preferential financing from EXIM banks thanks to a government-to-government connection, and that's how they paid for the equity for Porgera landowners and Lihir landowners.

As there is presently no plan in place, Dr Temu questioned how the government is getting ready to fund the additional stock that they must purchase for the new projects.

He emphasised that the government does have Kumul Petroleum, which owns the ownership in LNG, and that Kumul is organising the money for the equity when it occurs for the Papua LNG project.

According to him, a commercial firm receives funds from another entity to help it conduct its business.

“I’m of the view that the concessional funding either from bilateral or multilateral is still a good way to fund the equity for resource project,” Dr Temu said.

“I think we should explore that a bit more, this is something to live with the new Members of Parliament.”

A finance mechanism that may support the purchase of equity for the state, the government, or the landowners must be put in place, according to him, and this requires government policies and actions.

According to Dr. Temu, the mining and petroleum industries have done very well over the past 30 to 40 years in arranging both the ownership debate and the benefit distribution in a way that permits rights to everyone who is touched.

“Moving forward, there is plenty of room for change and that includes to finding the right pathway on how the government can acquire equity funds for new projects that are in place,” he said.

Reference: Wohi, Lorraine. Post-Courier (29 August 2022). “Government Urged To Look At New Pathways To Acquire Resource Equity”.

The re-opening of Papua New Guinea's Pogera Mine must be accelerated as it is a key contributor to the foreign exchange says, BSP Financial Group (BSP) CEO Robin Fleming.

The mine has been closed since 2019, but a reopening is imminent after representatives of Mineral Resources Enga and landowners recently signed the shareholder agreement.

Foreign exchange dynamics and the Gross Domestic Product (GDP) will alter with the reopening of the mine, according to Mr. Fleming, who spoke to FM100/Hot97FM News.

The expansion of the Papua LNG Project and the development of the P'nyang Gas Project are two more significant extractive sector initiatives that Mr. Fleming says would help the economy.

According to him, the economy would be stimulated by these projects alone when they become a financial investment programme in the third or fourth quarter of the fiscal year 2023.

Reference: Pacific Mining Watch (22 August 2022). “Re-opening Porgera Mine will boost PNG Economy: Fleming”.

The Independent Consumer and Competition Commission has postponed the review of the coastal shipping industry until 2023.

In a statement, ICCC Commissioner Paulus Ain said the review, which was started earlier this year to address issues with the market structure and efficiency of the coastal shipping industry, has been postponed until next year after a number of problems were found in the submissions the watchdog received.

He said that on April 25, 2022, a discussion paper was published in order to get feedback or opinions from all stakeholders.

According to Mr. Ain, the ICCC has received a number of submissions that highlight important industry challenges that also apply to PNG's domestic maritime sector.

“The purpose of this review is to understand the current market dynamics and development that have taken place since the last review by the ICCC in 2006.

“Since then, market dynamics within the shipping industry have changed, in terms of market efficiency, structure, legislative and regulatory requirements, policy directives, processes and procedures of operations in the coastal shipping industry.

“Ultimately, the goal is to identify opportunities to promote and improve market competition conditions,” Mr Ain said.

“Some of the concerns raised relate to matters such as institutional bench-mark practices, cabotage, labour-supply needs, subsidies and oversight of freights, infrastructure demand, competition and costs.”

According to Mr. Ain, the review included, among other things, the lowest economic market price possible prices, Quality shipping services provided, promote incentives available to shipping service providers to innovate practises and products and increase or promote opportunities for shipping service providers to maximise their profits.

“The ICCC thanks those stakeholders that have provided their written submissions on the

Discussion Paper and further advise that consultations on these concerns will not continue until the review commences in early 2023.”

Reference: Post-Courier (23 August 2022). “Shipping Industry Review Moved To 2023”.

EU-STREIT PNG joins hands with rural youth groups in Papua New Guinea to celebrate the International Youth Day with a message for young population to become proactive and take part in agri-food value chain businesses. 

The EU-STREIT PNG Programme in collaboration with rural youths and students in the Greater Sepik region marked the International Youth Day 2022 (IYD) with a message for all to become innovative and take part in all nodes along the agri-food value chains, including areas supported under the Programme.

Led by the Food and Agriculture Organization of the United Nations (FAO), the EU-STREIT Programme organised two events this year in East Sepik and Sandaun provinces, bringing together 1,781 youths in total. These youths were briefed, sensitised, and made aware through engaging interactions, including motivational speeches, cocoa competitions, student debates, contemporary group dances, drama role plays, march pass and collective chanting, in a bid to promote this year’s theme of IYD: ‘Intergenerational solidarity, creating a world for all ages”.

IYD is commemorated every year on 12 August, bringing youth issues to the attention of the international, national, and local communities, while celebrating their potential as partners in today’s global society.

Explaining this year’s theme, Ms Patu Shang, the FAO International Gender and Youth Inclusion Specialist, on behalf of the Programme Coordinator, called on the elders and parents as well as authorities to provide an enabling environment for youths to excel and take over. “It means mainstreaming young people’s perspectives and we have to come together as one from all ages. Therefore in everything we do, we must sit together and include youths in solidarity so they can tell us their perspectives.”

Ms Shang also challenged the youths particularly those from rural areas to become innovative and take part in agribusiness. “Don’t just sit back and observe because the world will pass you by.”

She added: “EU-STREIT PNG is supporting a holistic approach to develop cocoa, vanilla and fisheries activities so every young person can find his/her place in any node along the agri-food value chains and with the advantage of technology they can develop a particular value chain either as a farmer, or input supplier, or take part in processing and marketing.”

These overarching and inspirational messages where shared in the two celebrations held in Yangoru-Saussia District of East Sepik Province, on Thursday 4 August and in Vanimo, Sandaun Province, on Wednesday 17 August.

The youth were also urged to participate and become an integral part of the European Union funded rural agriculture development programme, as well as to appreciate and subsequently take up “Agriculture as a Profession”, thereby curbing rural youth exodus and striving towards Zero Hunger by 2030 through the development of agri-food value chains.

The commemoration in Vanimo started with a march pass in solidarity with youths and students from Don Bosco Technical Secondary and Vanimo Secondary, chanting and singing a popular line “ooh when the youths go marching in …”. In addition, present to give their speeches were the Deputy Provincial Administration for Cooperate Services and Director for Community Development, representing the Sandaun Provincial Administrator, as well as the Vanimo Royal PNG Constabulary Commander. After the official speeches, the youths went over to Don Bosco Technical Secondary to promote agriculture as a professional career with a cocoa bud grafting competition. A debate on the topic “is agriculture only for the poor and elderly” was organised as well between students from the two schools.

The celebrations in Yangoru-Saussia District of East Sepik Province was held in Baimuru Village and organised jointly with the “Baimuru Heights Youths in Agri-business Group” whose common interest lies in cocoa value chain activities. The day started with a march pass by youths carrying placards and chanting and soliciting community support in their quest to make a change in the community and the country through agribusiness.

It was an exciting and fun day for the youths in Baimuru Village with the support of the parents and elders to execute the day’s activities like choral music, dances and three role-plays showcasing challenges that rural farmers face like low prices for cocoa and vanilla beans and awareness on child labour. A successful female and male youth (community Campions) who have taken on agriculture as a profession also shared their success stories. The rest of the youthful population were encouraged to see the opportunities that exist agribusiness.

To encorage the youths to their agriculture work, cocoa and vanilla cultivation and processing tools/materials and items like secateurs, pruning saws, wheelbarrows, cooler box/Esky, strainer, thick cloth/blanket and Digital thermometers were presented to three youth groups that supported and participated in the celebrations.

Engaging Rural Youths as well

“I’m really happy to learn about the International Youth Day. Thank you EU-STREIT PNG for bringing these celebrations here. This kind of events are (typically) celebrated in urban areas and it’s the first of its kind in our village,” said a young female adult Melisa Jorry.

The event was also an opportunity to promote the One-UN approach by working with partners of United Nations Capital Development Fund (UNCDF) like MiBank and Women’s Micro Bank (Mama Bank), to impart basics of financial literacy knowledge to the youth, including the importance of saving and using banking services. 100 attendees (78 women and 31 men created personal bank accounts on the spot.

The EU-STREIT PNG through its Facebook page did a live streaming of the celebrations in East Sepik and Sandaun Province.

The EU-STREIT PNG Programme, being implemented as a UN Joint Programme (FAO as the leading agency, and ILO, ITU, UNCDF and UNDP as partners), is the largest grant-funded Programme of the European Union in the country and the Pacific region. The Programme aims to help improve the lives of the people from East Sepik and Sandaun provinces, by focusing on increasing sustainable and inclusive economic development of rural areas through improved economic returns and opportunities from cocoa, vanilla and fishery value chains while strengthening and improving the efficiency of value chain enablers, including the business environment, and supporting sustainable, climate-proof transport and energy infrastructure development.