PNG gets K1bil loan

THE Government has secured a K1 billion (US$300 million) from the Australian government to assist the budget, according to Prime Minister James Marape.
Marape said in a statement he had discussed the challenges facing the nation with Prime Minister Scott Morrison during his State visit to Canberra in July.
“We successfully negotiated the loan on favourable terms to be the cheapest possible (the LIBOR rate of 2 per cent plus 0.5 per cent) compared to the more expensive sovereign bond negotiated by the former government with more than 8 per cent in interest,” Marape said.
LIBOR (London Interbank Offered Rate) is the average interest rate at which leading banks borrow funds from other banks in the London market.
It is the most widely used global “benchmark” or reference rate for short term interest rates.
Marape said the funding was the first significant concessional loan Australia had offered in many years to anyone.
“This reflects the confidence Australia has in the extensive and comprehensive reform programme undertaken by the Government,” Marape said.
“Our reforms are focused on continuing the urgent task of budget repair through more prudent macroeconomic management, embarking on significant reforms to improve our revenues, to strategically target expenditure towards growing the economy and removing trade barriers to propel our exports to overseas markets.”
He said Treasurer Ian Ling-Stuckey had already released the 2019 Supplementary Budget.
He will table the 2020 Budget when Parliament sits this week.
It will detail how the Australian funding is going to assist the budget and businesses in PNG.
“The Treasurer will also use the budget to chart the path to recovery for the budget and the economy for today and over the future,” he said.
“The other credible reforms taken by this Government is to appoint a ministerial committee to support the Minister for State Enterprises.
“This will turn the financial performance of the State-owned enterprises around and significantly improve the services they provide to the people.
“This will also oversee the implementation of a detailed and comprehensive policy matrix that Cabinet has approved with the support of the Asian Development Bank.”