Government obtains loan from K1bil Nippon to support economy
BY GRACE AUKA-SALMANG
It has been a tough 12 to 15 month period since COVID-19 entered PNG, where it devastated the economy and slashed revenues by 20%.
Treasury Minister Ian Ling-Stuckey said this during the COVID-19 crisis response emergency support loan dialogue between the Government of Japan through JICA and the Government of PNG.
“Subsequently, the PNG government requested international support and we thank you (Japan) for responding,” he said.
“Today we are here to execute a loan agreement that was part of the 2020 financing plan but due to some delays it was brought forward to this year.
“There is a process to be followed to ensure that the loan agreement complies with the PNG Loan Assistance Act 1971.
“As responsible minister, after the signing of this particular agreement, the loan will become effective.”
He said that as the minister responsible for government procurement, the second signed instrument complied with JICA’s terms and conditions and would enable the loan of JPY 30 million (K 1 billion) to be disbursed this month.
He said the interest rate is virtually zero (0.01%) and is repayable over 11 years.
“The loan will support our budget for 2021,” Ling-Stuckey said.
“This loan continues the Marape government’s policy of replacing expensive commercial loans with good, cheap concessional financing.
“Last year, based on the financing plan, we raised K 5.379 billion in concessional financing and I am proud to say that the total cost of these loans is on average around 1.5% and certainly not. more than 2%.
“This demonstrates our commitment to continue to seek support for concessional finance.
“Obviously the strategy here is to pursue a revenue strategy because over the past 15 months in COVID-19 conditions, the Marape government is focused.
In the first quarter of this year, we will embark on an aggressive and realistic mid-term strategy, in which we hope to identify three to four key revenue initiatives. “