The Deputy Opposition Leader and Shadow Minister for Treasury, Finance, and Economy and Rural Development, the Member for Chuave Honorable James Nomane, has called on the Prime Minister to elucidate the country on his purported economic performance under the auspices of the disowned Treasurer Hon Ian Ling-Stuckey, MP.
Emphasis was placed on two pronouncements of progress since 2019 that should irk the country: (1) The claim of a 357% increase in capital expenditure, and (2) GDP growth of K43bn.
Mr Nomane said: “Marape’s record budgets since 2019 have created very little socio-economic impact notwithstanding the 357% capital budget increase and K43bn in GDP. There are no jobs, no private-sector growth in SME or business in general, no improvement in health and education, and no visible and practical solution to solve the most volatile law and order situation in our history.
He added: “GDP growth is due to increased borrowing and increasing government spending. Other components of aggregate demand like net exports, investments, and consumption are neglected. GDP growth is not an achievement when there is no job creation, stifling of the non-renewable sector, no FDI, and the absence of a thriving middle-class. Marape has nothing to be proud about. GDP cannot be his measure of performance. Marape must talk jobs. Period. Marape is trying to boast about the highest debt level, and the highest spending in the dubious Connect PNG program.”
Mr Nomane said under National Alliance the country experienced K21.4bn GDP growth that made cost of living affordable, created jobs, and strengthened the Kina. Under Marape the appetite for debt is insatiable at K64bn, taking debt-to-GDP to 60%. For every Kina in revenue generated, K0.60 must repay the debt and only K0.40 gets used to fund infrastructure and social services. This does not sound like prudent economic management.
He added: “Marape claims that the Central Bank has K14bn in foreign reserves. So why are we experiencing capital rationing? Why is there a FX shortfall? Why are businesses unable to import at a rate that promotes growth, expansion, and job creation?”
Mr Nomane has described the purported comprehensive report as a rant by trolls just regurgitating numbers without understanding what they mean.
He said: “The report is glib, and it has all the trademarks of being a sham. Marape must respect the people and stop lying about how the economy is tracking. We are in an economic freefall, and he does not have the wherewithal to save PNG. FX crisis, fuel crisis, cost-of-living crisis – no solution for increasing inflation, unemployment, and crime.”
Mr Nomane said: “Can the Prime Minister confirm how much contingent liability we have? Is it K8bn or K12bn? Can he confirm the loan arrangements for the Air Niugini re-fleeting at over K2bn? Can he confirm the sovereign guarantees given to SOEs for the loan to purchase 5% of Papua LNG for K4.8b etc? Can he confirm the K7bn for unpaid Connect PNG contracts.”
The level of borrowings is exorbitant, and the undisclosed amounts could take national debt to K100bn. Incurring debt to fund investments without any clear economic rationale, demonstrates irresponsible and reckless governance.
He added: “The PNG economy is not a tucker box. This Prime Minister needs to tell the people what capital budgeting tools were used to justify increasing our debt profile. These reports must be made public and open to scrutiny. The Prime Minister cannot be furtive when it comes to the economic management of the country. His reckless borrowing affects every Papua New Guinean.”
Mr Nomane highlighted that the Prime Minister was concurrently increasing taxes and spending funded by debt, without any real understanding of the concomitant inflationary effects of such a mismatch. There was so much waste in expenditure and the Treasury website stipulates a GDP growth rate of 2.4% which contradicts the 5.3% GDP pronouncement by Marape-loyalists.
He added: “Reality does not match the rhetoric. Two people responsible for micromanaging the PNG economy through selective warranting are the Prime Minister and Treasurer. Lo and behold! Now Marape is both Prime Minister and Treasurer in full control of the national coffers and holding the country at ransom with his superficial economic interventions and lack of acuity.”
