In brief: Bank of Papua New Guinea to provide US$100m to ease forex pressure and other business stories

Central bank to ease forex pressures with US$100 million, new Lands Minister promises to clean up corruption in his department, and the cost of childhood malnutrition estimated at K4.8 billion annually. Your weekly digest of the latest business news.

Treasury Minister Charles Abel says the Bank of PNG will provide US$100m to ease pressures in the local forex market according to the Post Courier. He said it was part of the National Executive Council’s 100-day, 25-point economic stimulus plan. He also said next month that Oil Search will provide 50 per cent crude oil to the Napa Napa refinery, and a rice import quota scheme will be implemented to encourage local production. An economic advisory committee comprising New Ireland Governor Sir Julius Chan, Milne Bay Governor Sir John Luke Crittin, Gulf Governor Chris Haiveta, and Esa’ala MP Davis Steven will be in charge of implementing the 100-day plan. Abel reportedly said the government wanted to stick to the guidelines of the Fiscal Responsibility Act, which prescribes a 30 per cent debt-to-GDP, adding there would be no new taxes.

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Lands Minister Justin Tkatchenko. Credit: RNZI

New Lands Minister Justin Tkatchenko says it is his mission to clean up the entrenched corruption in the Lands Department. He told RNZI he was formulating a five-year plan to weed out a network of corrupt officials who facilitate crooked land deals. He’s also promised action on the controversial Special Agricultural Business Leases (SABLs) system, under which about 12 per cent of the country’s land was leased.

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The economic cost of childhood malnutrition in PNG was about US$1.5 billion (K4.8 billion) in 2015-2016, or 8.45 per cent of GDP, according to a report by Save the Children. Consultancy Frontier Economics says PNG has the fourth highest child stunting rate in the world, more than double the global average.

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Oil Search has recorded a four-fold increase in half-year profit due to higher oil and gas prices and cost reductions. The company recorded a net profit of US$129.1 million (K414 million) in the six months to June 30, up from US$25.6 million a year earlier. Managing Director Peter Botten said the gains were underpinned by a more than 25 per cent increase in average oil and gas prices, a 12 per cent decline in operating costs, and reduced depreciation and amortisation expenses.

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Kumul Petroleum Holdings (KPHL) has signed an agreement with global oil and gas engineering and construction service provider, KBR, to investigate the feasibility of an energy hub in Kikori, Gulf Province. KPHL managing director Wapu Sonk says a stand-alone downstream LNG process development could create up to 30,000 jobs during the construction phase, according to the Post Courier.

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The government is to launch an investigation into the standoff that eventually resulted in the destruction of properties at the K92 mine site in Balimoia, Eastern Highlands, in a bid to resolve issues raised amicably. Disgruntled landowners went on a rampage last Thursday burning two trucks, a grader and standby generator.

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Bank South Pacific recorded a K370.9 million profit after tax for its 2017 half-year results. CEO Robin Fleming said this was a 23 per cent increase from its 2016 operating profit after tax of K301.4 million.

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The PNG Government says it will establish a National Plantations Management Agency, aimed at resurrecting the smallholder cash crop sector. Prime Minister Peter O’Neill said it would mean a deviation from the large-scale plantations option, which was no longer viable in the Highlands region due to landowner issues.

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The ANZ’s Michael Lim

ANZ’s Head of Trade and Supply Chain, Michael Lim, says blockchain technology holds tremendous possibilities to transform the PNG economy. He told a seminar in Port Moresby the technology could reduce paper-based transactions and fraud; promote transparency, drive standardisation and increase efficiency and accuracy.

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The Government will allocate the first 300 of 1762 land titles to ordinary Papua New Guineans. They will be released to Bank South Pacific for mortgage loans within the 100 days through a raffle. Treasury Minister Charles Abel says the scheme is part of the 100-day economic recovery plan, according to the Post Courier.

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The National Fisheries Authority has presented this year’s K60 million dividend payment to the National Government from revenues generated from statutory and access fees.

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Air Niugini will partner with Sabre Corporation to introduce a leading Passenger Service System to enhance its customer experience for online ticket sales, and as part of its Business Transformation Program. The transition will come into effect on September 30.

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And finally, the Deputy Secretary of PNG’s Department of Personnel Management, Agnes Friday, says it’s a big concern there is no record of public servants who have been awarded overseas scholarships. She told NBC millions of kina are spent every year on scholarship programs with overseas governments but no one knows if the students are using the qualification that they’ve attained.

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