Bank of PNG’s Loi Bakani. Credit: BAI

‘The preliminary fiscal outcomes for the eleven months to November 2020 showed a deficit of K5,638.4 million …  To finance the deficit, the Government raised K4,077.3 million from domestic sources and K1,561.0 million from external sources. The impact of these high expenditures in 2020 on economic activity has not been evident.’

—Loi Bakani, Governor, Bank of Papua New Guinea in his latest Monetary Policy Statement

The positive news that the Marape government and Barrick Gold have reach a ‘binding framework agreement’ for the reopening of the Porgera gold mine is being welcomed with relief by almost all concerned.

While the full agreement isn’t before us yet, compromise appears to have been the order of the day. 51/49 isn’t the 66/33 that the PM threatened Barrick with last year, but it will mean more long-term benefits for the country and landowners, and a happier central bank governor.

The deal doesn’t just provide a much-needed boost to business confidence.

As one Unitech student commented on our site this week:

‘PJV [the Porgera Joint Venture] has recruited a lot of students in the past decade, thus its closure has brought uncertainty to us … However, this news has lifted our hearts and we look forward to set a new legacy together.’

COVID-19

The increasing number of COVID-19 cases in PNG is a matter of concern for all business people.

While the country has a vaccination plan, mitigation measures to prevent the spread of COVID-19 will be necessary for some time to come and businesses of all kinds are being asked to show leadership and support as PNG pursues its national isolation strategy.

‘Never let a good crisis go to waste,’ as one senior executive said to me recently, using a quotation often attributed to Winston Churchill.

Recent pronouncements from PNG’s peak business groups offering exactly this support are to be applauded, as is support from PNG’s international partners.

Recently, we’ve been hearing about the impact of COVID-19 on businesses as diverse as Ela Motors, the Brian Bell Group, KK Kingston and Puma Energy.

While all have faced challenges, they have also embraced the opportunities that have arisen, just like Vani Nades, the PNG entrepreneur behind PNG’s first Ebay.

‘Never let a good crisis go to waste,’ as one senior executive said to me recently, using a quotation often attributed to Winston Churchill.

Politics

PNG’s Parliament is due to sit again on 20 April after an extraordinary five-month hiatus.

Is the Opposition still after the PM’s job, or has James Marape secured the numbers he needs to survive to 30 July, which is by convention the last opportunity for a vote-of-no-confidence before the July 2022 National Elections? I won’t offer a prediction, although the Porgera deal was well-timed.

There are certainly many reforms requiring Parliament’s attention when it does reconvene: the promised new organic law on mining and petroleum and a revised Investment Promotion Authority Act are just two. The stock exchange is also hoping for some clarity from the Treasurer on the governance of the Securities Commission.

Future projects

Our interview this week with Oil Search’s MD provides the latest on the Papua LNG project and P’nyang. It’s been a tough first 16 months in charge for Dr Kieran Wulff, but he remains positive about PNG’s long-term prospects. Given Fitch’s recent downgrade of PNG’s likely LNG production, that’s good news.

Also bullish is PNG Power’s MD Flagon Bekker, who featured in our most recent online business briefing with Puma Energy’s Hulala Tokome. Bekker opened up about plans to recapitalise PNG Power, stabilising PNG’s two main grids, and also the ‘gamechanging’ Ramu 2 hydro project. If he can deliver, Bekker will be one of the most popular men in PNG.

Hulala Tokome also talked about transformation. Puma’s business model is going to change in PNG, as it looks to the fuel sources of the future.