Govt told to explain new loan

The National, Wednesday July 6th, 2016

MOROBE Governor Kelly Naru wants the Government to explain the terms of the K1.5bn loan acquired from an overseas financial institution.
Naru made this call yesterday after learning that the Government had secured a syndicate loan of US$500 million (about K1.5 billion) from international financial institution Credit Sussie AG last week.
Naru said while the loan might have been taken in the name of development, the Government must be wary of the  interest rates charged on the loan and who was going to shoulder the burden of repaying the loan.
“I think the people of this country would love to hear from the Government what the actual terms of the loan is, the rate of repayment and the interest component,” Naru said.
“The Government needs to come out clear on that because at the end of the day we will collectively foot the bill. These are the information the Government must feel duty-bound to reveal to the people in the spirit of transparency, good governance and accountability.”
Treasurer Patrick Pruaitch said the first tranche of the loan would be acquired immediately and all legal and procedural requirements had been met. He said the Treasury Department and Bank of PNG had to work closely with the Government to ensure it was able to finance its budget deficit for 2016.
Naru said: “This country is running on a deficit budget and so we have to fund the deficit. So the loan was inevitable to run some of our development agendas.
“I will be grateful if they can use part of this loan to offset some of the outstanding PSIP (provincial funds)  and project funds due to Morobe.
“We collectively have between K38 million and K50 million carried over from previous years still outstanding for project funding.
“I welcome that loan but at the same time I caution the people who will be responsible for the distribution of that loan to properly prioritise it according to things that are budgeted for.”