Forex shortage seen as obstacle

THE foreign currency shortage affects business operations which require foreign injection from Foreign Direct Investment, according to PNG Business Council director Nuni Kulu.
She presenting the council’s second quarter business performance report of the council during a prime minister’s breakfast event yesterday in Port Moresby.
“In our first quarter report, sales, investments, employment, consumer and insurance are our five business strengths that are our core focus,” she said.
Kulu said in terms of sales, the small to medium enterprise sector underwent significant adjustment in the second quarter but still remained resilient compared to the last quarter.
Other sectors performed strongly.
“Capital expenditures were modest which indicated operators were expanding their operations. Employment remains constant,” she said
Kulu said top corporate sales remained 30 per cent lower in quarter one compared to quarter two in 2015.
This was due to three factors.
“Impacts of direct limited oil investment from the extractive and non-extractive sectors, reduction of public investment projects, and foreign currency shortages persistency impacted the payment of supply of goods and services and therefore limiting sales growth,” she said
Kulu said the hostile compliance rules by several regulators were also affecting sales performance.
“These trend remain,” she said.
“There is and there was a further reduction of two per cent from quarter one frame.
“Of the four factors mentioned previously, foreign currency shortages remain the single biggest challenge and this is symptomatic of limited foreign direct investment in the market.”