A profile of the services sector in Papua New Guinea including growth, challenges and potential opportunities.

Credit: Viewsonic

Overview

While a wide variety of business services are delivered in Papua New Guinea, there is a widely held view that PNG is an under-serviced market for a range of services.

Nevertheless, Papua New Guinea has some established and well-respected providers of first tier consulting services across its economy. Major consulting firms such as Deloitte, KPMG, Ernst & Young (EY) and PricewaterhouseCoopers have offices in PNG, while the country’s status as a leading commodity exporter has led to the development of a competitive logistics and transportation sector.

Similar competition also exists in the human resources and recruitment sector due to the country’s reliance on the resources industry and expatriate labour.

Law and order concerns are also prominent, which means the security services industry is also a major employer.

Government spending is a critical driver for the services sector. The increasing level of employment in teaching, health and security have directly contributed to GDP growth while higher spending on goods, services, and investment filtered into other parts of the services sector.

Although there has been some expansion of PNG’s services sector, in many areas the country is still an under-serviced economy. This may be due, in part, to the perceived difficulty of establishing a business in PNG, which traditionally has given a natural advantage to a small number of established local suppliers, and also to those with a long specialisation in PNG (such as PNG-based law and accounting firms).

The introduction of the National Procurement Act in 2019 provides for the preferential treatment of local companies when providing services to government.

Nevertheless, local services are not able to meet demand in a range of areas. This is opening up opportunities for overseas companies to either set up operations in PNG or to partner with local businesses to expand capabilities.

This is especially true in

• information technology and communications
• health
• education and training (primary, secondary and tertiary education)
• legal services
• management consulting
• construction contracting and engineering
• mining and petroleum project-related services.

PNG’s emerging middle-class is also providing opportunities for the provision of more sophisticated services, such as financial advice, private health and real estate.

What else would you like to know?

This sector file is a living document created as a service to our subscribers. It is updated from time to time, as new information comes to hand.

Is there something else you’d like to know about this sector? Is there new information we haven’t included? Let us know in the Comment section below, or email editor@businessadvantageinternational.com and we’ll look into it.