The past year has been a challenging one for Papua New Guinea’s major businesses but, as we are learning from our own conversations with them, they are nevertheless proving remarkably resilient. Now, all eyes are again focused on the next wave of resources investments.

The retail precinct of Harbourside South, Steamships’ new retail, office and hospitality development in downtown Port Moresby. Credit: BAI

How is business confidence among PNG’s CEOs as we approach the end of 2024?

We’re in the process of finding out.

Work is currently underway on our 2025 PNG 100 CEO Survey, the results of which will be published in March 2025, in the 20th annual edition of Business Advantage PNG magazine.

Now in its 14^th year, the survey aims to capture business confidence among PNG’s largest companies by asking them about their profit, investment and recruitment expectations for the coming year.

It also asks them to rank the business impediments they are facing.

We’re about halfway through the long and fascinating process of surveying the country’s top executives, mostly face-to-face. Once this task is complete, the anonymised data will be handed over to our survey partner Westpac for analysis.

While the final results won’t be known until next year, there are two things that are already clear: firstly, 2024 has been one of the toughest years for business in PNG but, secondly, most of PNG’s leading companies have shown remarkable steadfastness.

Executive stress

Starting with the January 10 riots in Port Moresby, businesses have had to deal with a number of unwanted and often unforeseen imposts this year.

They have faced acute fuel shortages due to the challenges faced by the country’s largest fuel importer, Puma Energy.

They have faced ongoing foreign exchange shortages which, they tell us, have often put severe stress on their relationships with their international suppliers, not to mention their plans for capital expenditure.

Those in retail and manufacturing have seen domestic demand weaken in the face of a combination of imported inflation and the kina’s reduced buying power.

A tragic landslide and law and order issues have also slowed the plans to return the reopened Porgera gold mine to full production.

Combined with continued uncertainty about when the next wave of major resources projects will begin, it is not surprising that we are finding morale at a low ebb as 2024 comes to a close, even though the 2025 National Budget suggests GDP grew by 4.9 per cent this year.

Resilience and innovation

That said, time and again our survey team is hearing of resilience and innovation from the CEOs we talk to, and an optimism in the long-term future of the country.

Some businesses are re-tooling to target export markets (and earn some foreign exchange for themselves). Many are making better use of technology to not only be more productive but also launch new products and services. Many are investing in training and skills development.

While some have slowed or stopped their investment in new plant and equipment in the face of ongoing project delays, many others are taking the opportunity to invest in the new or upgraded facilities they expect to need.

Opportunities present

Ironically, some are observing that the very business conditions they contend with on a daily basis are actually affording them a measure of protection by acting as a barrier to entry to the market. As Westpac’s Senior Economist Justin Smirk observed earlier this year when launching the results of our 2024 CEO Survey, competition is not a first-order concern for most of PNG’s business leaders, outside of the increasingly vibrant telco and financial services sectors.

Competition will no doubt increase as PNG’s economy opens up again on the back of its expected greenfield resources projects, and perhaps we won’t have so long to wait for these as some fear.

In positive news, Santos has confirmed completion of the Angore Pipeline Tie-In Project, which brings more gas reserves into the PNG LNG project to help backfill and maintain production.

Moreover, in our exclusive interview with TotalEnergies’ Arnaud Berthet, published today, he expresses confidence that a final investment decision on PNG’s second gas project will still come before the end of 2025.

Meanwhile, we hear positive noises that a mine development contract and special mining lease for Wafi-Golpu may be concluded soon, as demanded by Prime Minister James Marape back in October.