Govt secures interest-free loan

THE Marape-Steven Government has secured an interest-free K1.2 billion loan from the International Monetary Fund.
The achievement is a “strong vote of confidence in the Government from the international community”, Prime Minister James Marape said.
Marape was delighted that Treasurer Ian Ling-Stuckey had secured the financing agreement.
“I want to congratulate Treasurer Ian Ling-Stuckey for working tirelessly to repair the country’s budget,” Marape said.
“He (Ling-Stuckey) has put a stop to reckless borrowings for poorly-conceived capital projects that mostly benefited foreign firms and SOE (state owned enterprises).
“He has stopped expensive commercial borrowings where the financial benefits flowed to foreign bankers.
“He has instead delivered a major reform agenda that has reshaped our debt management strategy to focus on securing good, cheap, transparent financing from the international community and our priority strategic partners such as Australia.”
Marape said Ling-Stuckey and his team had worked closely with the IMF over many months.
“I thank the IMF board for recognising my Government’s sincerity and transparency in setting a new direction for the economy.
“We are a more open, transparent and accountable government working to reduce corruption,” he said.
“We are working diligently to adjust from recurrent expenditure towards increased investment in growth through the capital budget while focusing on improving efficiencies and productivity for export growth.”
“The K1.2 billion lending programme was secured on unprecedented terms of 0.0% interest rate over 10 years with a 5.5-year grace period and the first principal repayments to start in December 2025.
“Like the Australian bridge-financing in 2019, the loan will go straight into the Bank of Papua New Guinea with direct foreign exchange benefits for the private sector.
“I want to assure the people that this loan will be put to good use in supporting our proven policy-based programmes.
“These include support for our Covid-19 response, Connect Papua New Guinea, Special Economic Zones to promote exports, Help programme, Agriculture and MSME policy, State-Owned Enterprises reforms and public sector reforms.”
Marape added: “This loan forms the core of the 2020 budget and is within our five-year fiscal consolidation strategy that aims to bring debt-to-GDP ratio to below 40 per cent in 2024 in order to restore commitment to the limits set out in the Fiscal Responsibility Act.”