The government’s COVID-19 bond was oversubscribed after the first week, according to Treasurer Ian Ling-Stuckey. He said over K1 billion was raised and that the money will help protect Papua New Guineans from the worst effects of the coronavirus pandemic.
Economists are forecasting a recession in PNG in 2020 as the country struggles to deal with the global crisis caused by the outbreak of the COVID-19 virus. The ratings agency Standard & Poor’s has also downgraded the country’s debt.
The decision by the Marape-Steven government not to extend the Special Mining Lease on the Porgera gold mine is headed for the courts after the National Court of Justice at Waigani ordered both parties to have discussions to resolve the matter.
Prime Minister James Marape moves to allays concerns among Papua New Guinea’s mining companies following the decision not to renew the special mining lease for the Porgera gold mine. Meanwhile, the mine’s temporary closure is already affecting local business.
The Papua New Guinea Government has announced that it will not renew the existing Special Mining Lease at the Porgera gold mine, which is operated by Barrick Gold. Barrick is set to challenge the decision.
The impact of the COVID-19 crisis on Papua New Guinea’s financial markets has been muted so far. However, the crisis provides an opportunity to create new investment opportunities so that local entrepreneurs can raise capital more easily.
Papua New Guinea is facing a debt crisis according to new reports from the Asian Development Bank and the World Bank, and the country will need the cash injection of new major investments to avoid ‘lacklustre’ future growth.
Papua New Guinea’s largest company, Oil Search, is proposing to raise US$700 million (K2.4 billion) to strengthen its balance sheet in response to declining oil prices. The company’s stake in the PNG LNG project may also eventually be on the table.
Papua New Guinea’s government has announced its Budget deficit will balloon to more than K6 billion, the biggest in the nation’s history. Treasurer Ian Ling-Stuckey has announced a well-targeted stimulus, but the International Monetary Fund needs to come to the party.
As a thinly traded currency, the kina has been protected from some of the volatility affecting world markets in the wake of COVID-19, but that presents its own set of problems.