Investors need assurance

INVESTORS and stakeholders continue to hope for a speedy resolution to key resource project negotiations to drive confidence and economic growth, according to the Kina Bank.
Executive general manager for banking Lesieli Taviri said these were in addition to planned Government spending over the medium-term to improve infrastructure and providing confidence that the economy would have support until the global pandemic subsided.
“The resource projects currently in the pipeline for PNG represent an estimated K110 billion in foreign investment and domestic production over their lives,” Taviri said.
“The 2021 National Budget projects over K40 billion in capital expenditure from 2021 to 2025.
“This fiscal support, especially after the sharp downturn witnessed globally, gives some measure of reassurance to economic stakeholders and has the potential to set a solid foundation for future growth in PNG.
“The resource projects continue to be the main economic drivers in the medium term.”
She said 2020 was a challenging year for PNG as the Covid-19 pandemic took a significant toll on all sectors of the economy.
“The Prime Minister stated in September that PNG’s economy had declined by K10.7 billion in nominal terms by the third quarter, which is significant relative to estimated gross domestic product (GDP) of K81.6 billion,” Taviri said.
“The cancellation of the Papua LNG and P’nyang LNG before the Covid-19 outbreak put a dampener on investments in resource-adjacent sectors and tilted risks in the broader economy towards the downside.
“The pandemic aggravated these risks and caused a number of private and commercial investments to be either delayed or cancelled outright.”