K5.6m boost for SWF

By GYNNIE KERO and REBECCA KUKU
PAPUA New Guinea (PNG)’s Sovereign Wealth Fund (SWF) kick-started yesterday with the Government finally making a maiden deposit of K5.6 million into the fund.
The deposit represented seven per cent of K80 million paid by Kumul Consolidated Holdings (KCH) as dividend to the State.
According to the Treasury Department’s website, the Organic Law on the SWF was passed by Parliament in July 2015 and the Fund was to come into operation in 2016.
But it had remained dormant until yesterday.
Speaking at the dividend presentation by KCH yesterday, Prime Minister James Marape said: “This is a historic day for Papua New Guineans and for our generations to come.”
Marape said KCH was paying 50 per cent of its profits as dividend to the State, and seven per cent of the dividend, or K5.6 million, will go into the SWF trust account.
“The Government is setting aside seeds to sustain our children and our children’s children, rather than harvesting and eating everything,” he said. “We are placing dividend proceeds from KCH investments into SWF which was established by the Treasury and Finance.
“The SWF is designed to provide stabilisation against potential volatility in the domestic economy and external economic shocks, and encourage much-needed savings for the future.
“This will be the first of many contributions to the country’s SWF, made possible by the prudent economic and financial management.
“The course set for this country is directionally correct and needs energetic and ethically-based leaders to overcome the many challenges.
“Previous governments made unfulfilled promises to implement the SWF legislation. SWF plans were left unexecuted and accounts were dormant. There are no savings from investment dividends from our past since the Mineral Resources Stabilisation Fund days.”
Marape commended State Enterprises Minister William Duma and the KCH board and management for successfully progressing the SWF facility.
“This is KCH’s first dividend declaration under my watch. The State-owned enterprises (SOEs) reform agenda is seeing success due to the commitment and hard work of SOEs and the oversight provided by KCH,” he said.
“I am aware that we still have many challenges, in service quality and performance, accessibility and affordability. However, we are making good ground, where others have fallen short.
“These are not just empty promises, but an accelerated strategy supported by real actions and properly executed plans.”
Marape said the KCH dividend was driven by the results of a well implemented SOEs reform programme.