Govt works on reducing loans, says Ling-Stuckey

THE Government is working on lowering the interest costs on the country’s debt, says Ian Ling-Stuckey, the minister assisting the prime minister on treasury matters.
“No more expensive commercial loans such as the US$500 million (about K1.89 billion) sovereign bond taken out in 2018,” he said.
“Now, we are looking for good, concessional international financing.”
He said the sovereign bond had more than eight per cent interest.
“We paid over K152 million in just interest costs on this expensive loan in 2023. We are now looking at international financing at only half this rate.
“As we move towards a surplus in 2027, we can stop taking out new loans, and start repaying loans faster than initially planned.
“This is what a surplus budget means: we no longer need to take out any more debt, and we can start paying down our debt.”
He said that debt-to-Gross Domestic Product (GDP) ratio dropped from 52.6 per cent in 2021 to an estimated 52 per cent in 2023.
He said under the 13-year budget repair and reconstruction plan, the Government has the option of paying off all PNG’s sovereign debt by 2034.
“Future assistance will then focus on grants. We won’t need any more loans,” he said.
He said new sources of grant aid would be sought, such as through the Millenium Challenge Corporation (MCC).
Ling-Stuckey said countries must meet strict requirements to receive grant funding, such as ruling justly, investing in people, and economic freedom.