The presidents of Papua New Guinea’s two largest business chambers, in Port Moresby and Lae, outline the difficulty for business of life under lockdown, but also point to how PNG’s economy can bounce back from the current crisis.

Lae City. Credit: LCCI

Nearly a month into lockdown, Papua New Guinean businesses are feeling the pinch of life under the country’s state of emergency. Foot traffic is down, there is confusion about the rules of moving goods between provinces, and the cases of COVID-19 are growing.

But some of the hardest hit economically are PNG’s small-to-medium enterprises (SMEs) that simply do not have the capital to ride out a sustained loss of turnover.

‘Our goal is to keep the city’s businesses operating and keep things working as much as normal while you are restricting the movement of people.’

‘A lot of businesses are really on their knees,’ Rio Fiocco, President of the Port Moresby Chamber of Commerce and Industry (POMCCI) tells Business Advantage PNG. ‘Almost daily I am told of a restaurant or a small business that has closed its doors and of course everyone that closes their doors loses their employees and that has an ongoing impact on their families. Our priority is to keep operating, to keep the doors open and keep as many employees employed as we can.’

John Byrne, President of the Lae Chamber of Commerce (LCCI) agrees. ‘Our goal is to keep the city’s businesses operating and keep things working as much as normal while you are restricting the movement of people,’ he says.

Doing business in lockdown

POMCCI’s Rio Fiocco. Credit: Rocky Road

Both business chambers report that, while there are less people on the streets,  many businesses are trying to make the best of the current trading restrictions. Byrne reports that most businesses are operating in some fashion and Fiocco says supermarkets are seeing an upswing but that other businesses are doing it tough.

‘Sadly, a lot of SMEs rely on business from the government and because the government is fiscally challenged they are not paying their suppliers,’ Fiocco says. ‘For big companies – like the Borneo Pacific Pharmaceuticals and the City Pharmacy Ltds of this world – they can afford to carry the government debt for three-to-six months but if you’re an SME you can’t.’

‘The stimulus is still very Moresby-centric, we need to put a business case and a budget case for what we need in Lae and Morobe.’

One unforeseen challenge is the cost of transport, with the PMV bus system not working, many businesses have had to move to private transport. ‘Most companies are picking up their own staff with the own vehicles or the bigger ones are engaging security companies or transport providers,’ Fiocco says.

On the positive side, Byrne reports that the Lae port is working well, particularly the ICTSI section responsible for container shipping and that is keeping manufacturers working by keeping supply chains moving. ‘They [the ports] were very responsible from day one, they shut down the whole process and stopped any ship coming in that did not have 14 days clearance from the day of last departure or crew change over by sea and they are doing that really well, and their hygiene processes are really effective,’ he observes.

More needed for business

LCCI’s John Byrne

In terms of government-driven stimulus, both presidents thought that there was more that the government could do.

‘When you analyse it, you will see that there is very little that the government is offering because it has very little money to offer,’ says Fiocco. ‘We need relief to businesses from some of the taxes like land tax and a reduction in some of the tariffs for electricity and even water. We would like to see some sort of assistance package even it is a waiver of some of the salary and wages taxes or tariffs, even if it is just for this year or the last three-quarters of the year.’

Byrne says that the regions need to be more proactive about their needs.

‘The stimulus is still very Moresby-centric, we need to put a business case and a budget case for what we need in Lae and Morobe,’ he tells Business Advantage PNG. ‘It is up to us now to ask for what we need. It is not deliberately Moresby-centric but it is down there and no-one is asking for it.’

‘The two big elephants in the room are still Wafi-Golpu and the expansion of P’nyang and I believe discussions are still going on and we are hoping for a positive announcement.’

New investment

And then there is the overall need for more foreign investment to come into PNG, a situation that has already been putting pressure on the local economy.

‘The two big elephants in the room are still Wafi-Golpu and the expansion of P’nyang and I believe discussions are still going on and we are hoping for a positive announcement on one or both of these by the end of the month from the PM,’ Fiocco says.

The POMCCI president even sees a silver lining to Papua New Guinea’s reliance on the oil and gas sector when we move past the current COVID-19 crisis.

‘We are not like most of the Pacific Islands, in that we are not so heavily reliant on tourism because that sector has been decimated throughout the rest of the Pacific,’ he says. ‘We do rely on the oil and gas and agriculture and all of those markets are still operating, although some of the prices are right down. But at least we still have those sectors moving, so PNG is much better placed than the rest of the Pacific nations and we will bounce back the quickest.’