In brief: World Bank releases new economic outlook for Papua New Guinea and other business stories

The World Bank predicts slower GDP growth for Papua New Guinea, P’nyang could still be on the table and fibre optic cable landing to start in Vanimo. The business news you need to kick-start your week.

2019 GDP growth projection vs 2020 GDP growth projection. Credit: World Bank

Resources

Patrick Pouyanne, CEO of the French oil and gas company Total, has said that ExxonMobil and PNG need to go back to the negotiating table. Total leads the US$10 billion Papua LNG project, the agreement for which was approved after review in September last year. ‘Our project is joint with that of Exxon,’ Pouyanne said. ‘There is a need for an agreement and the PNG government is aware of that.’

‘We have an agreement; they need to find an agreement. All of that needs negotiation, I don’t think negotiations should be done through media,’ he added. (Reuters)

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After last week’s news on the P’nyang gas agreement, Prime Minister James Marape has said that for the project to progress, it has to be treated as separate from both the PNG LNG and Papua LNG projects and that more local content participation is required, among other conditions.

‘In the meantime, I call upon ExxonMobil and Oil Search not to hold the Total project in Gulf to ransom,’ Marape said. ‘If you model the project to be uneconomical, then don’t push it: let’s leave the gas in my land and you develop Papua (LNG) plus further work in PNG LNG.’

The State Negotiating Team and ExxonMobil will present to the Ministerial Gas Committee and the ‘Cabinet will decide on P’nyang’, the Prime Minister explained. (RNZ)

Economics and finance

The World Bank has released it latest economic update for Papua New Guinea. Global uncertainties and slower growth in the non-resource economy could mean a drop in PNG’s GDP growth to three per cent between 2020 and 2022.

‘PNG’s growth outlook remains positive, but projected GDP growth rates are lower than our previous forecasts, mainly due to delays in finalising agreements and launching large new resource projects,’ said Ilyas Sarsenov, World Bank Senior Economist for PNG.

(Look out for our analysis of the World Bank update in this Wednesday’s newsletter.)

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The Independent Consumer and Competition Commission (ICCC) has said there is no issue with the acquisition of PNG Microfinance Limited (PML) by Nationwide Microbank Limited (MiBank). ICCC’s Chief Executive Officer, Paulus Ain, said: ‘On the basis of the available information, the ICCC concluded that the transaction fell outside of any of the mandatory notification thresholds … Accordingly, MiBank was notified to proceed with the acquisition.’ (LOOP)

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Vendors at Gordon Market are getting assistance to open savings accounts from the National Development Bank through the People’s Micro Bank (PMB). According to the PMB’s Marketing Officer, Tizuha Kiki, the initiative also seeks to encourage vendors to save money and improve their businesses. K20 is the minimum deposit for merchants. (The National)

Telecommunications

PNG DataCo and its partners will start laying the Kumul Submarine Cable Network (KSCN) in Vanimo, Sandaun Province (West Sepik). KSCN is part of a domestic and international network and it is expected that it will connect Vanimo to Jaypura, Indonesia, by mid-2020. The project partners have completed the cable landing from Sydney, Australia, to Port Moresby. (EMTV)

Aviation

Air Niugini has committed to transporting PNG nationals studying in China out of Hong Kong airport. The national airline company has said that ‘as long as they [the students] meet all the health and quarantine as well as the government’s requirements to mitigate the coronavirus risks,’ they will fly them home for free. The only students who cannot access this free service are those in Wuhan or Hubei Province. The students’ parents are advised to contact Air Niugini Customer Care. (Air Niugini)

Retail

Brian Bell distribution centre.

Retailer Brian Bell and the superannuation fund NASFUND have signed a three-year deal that enables NASFUND’s members to get a 15 per cent discount at Brian Bell shops. Cameron Mackellar, Brian Bell’s Group Chief Executive Officer, said: ‘On behalf of the Brian Bell Group of companies, I am delighted to say we have a new three-year deal in place for all the NASFUND members to take advantage of.’ (Post-Courier)

Agriculture

Highlands AIC production plant. Credit: IAI

Innovative Agro Industry (IAI), the developer and operator of the frozen French fries facility Kuk Chips factory, in the Highlands, has started to process locally grown potatoes. This is the first step of an ‘ambitious import substitution plan’ that will help reduce the price of frozen foods in the country. Ilan Weiss, Chairman and Executive Director of IAI, said: ‘We buy only potatoes that are suitable in size and quality. We are buying almost four tons daily at the Hagen buying point, we also buy in Enga through our farm in Sirunki and directly at the factory in Pangia. It’s a lot, but not enough.’ (LOOP)

Health

Just like many other countries, PNG is implementing ‘stringent measures’ to avoid possible cases of the novel coronavirus in the country. According to NBC News PNG, the Papua New Guinea Ports Corporation Limited (PNG Ports) has announced it will assist ‘customs, shipping lines and the health department officials, in monitoring and restricting the movement of vessels, passengers and cargoes’. Fego Kiniafa, PNG Ports’ Managing Director, said that all vessels are required to submit pre-arrival documents and National Health Department screening forms.

The PNG Institute of Medical Research has also mentioned that it will conduct the test to determine the presence of the virus in suspected cases.

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