Foreign exchange problem biting hard

Main Stories

By Gynnie Kero
A BUSINESSMAN from East Sepik is concerned about the prolonged foreign exchange situation the country is faced with which is affecting his import business.
Robin Humori, from Hambuge in Yangoru-Saussia district, runs his automotive business outside Wewak town,  providing employment opportunities for  youths he helps sponsor for training.
Humori imports vehicle parts from overseas.
He said local businessmen like himself were feeling the pinch of the situation.
“The continuous falling of kina is making it difficult for some of us who are trying to run our operation,” Humori said.
His concern probably echoes the concern of other business people in the country.
Economist and Institute of National Affairs executive director Paul Barker had earlier pointed out that businesses in the country would continue to suffer from a lack of foreign exchange.
Barker told The National that foreign exchange shortage had “really hurt businesses” and the small to medium enterprises were worst affected.
“It’s not just businesses that are importing goods for reselling domestically, it’s also nearly all other businesses that are dependent on imported goods that are part of their manufacturing process or inputs for operating their businesses, spare parts or processing machines.”
“There’s a big backlog of debts and it’s easier for some of the bigger companies that have better access to overseas credit and overseas suppliers.
“Small to medium-term enterprises have probably suffered more.
“It’s affecting all industries and at a time when the economy is down somewhat, we’re seeing growth but it’s been on the back of that LNG production.
“We saw the benefits of LNG during the construction phase, but the production phase only provides a few jobs. While the development partners are having to pay off the debts, and that’s taking a lot longer now because the LNG price is so much lower than originally envisaged.
“So, we won’t be seeing those debts paid until 2018 and beyond.
“We have some new projects, LNG and other resources projects.
“If the market is right and if the financiers are happy, we’ll provide significant economy but that won’t be happening until late 2018 and 2019.

Leave a Reply