THE Papua New Guinea Chamber of Mines and Petroleum is encouraged by Prime Minister James Marape’s recent announcement of a clear policy on the payment of dividends from resource projects through to a Sovereign Wealth Fund (SWF).
Prime Minister Marape made the announcement upon receiving a K100 million dividend payment from Kumul Petroleum Holdings Ltd (KPHL) on August 18th.
President of the PNG Chamber of Mines and Petroleum, Anthony Smare said this was a good sign of the government’s commitment to ensuring economic returns from resource sector projects are rightfully accounted for, and properly invested and managed for the long term.
“The resource sector contributes approximately 28 percent annually to the PNG economy. While this has a massive indirect multiplier effect in the form of employment, crucial infrastructure and education and health support. There is still a misinformed opinion as to how the real economic returns of the sector are being recorded, and correctly valued.
“The establishment of a sovereign wealth fund with strong and transparent management processes will ensure that these direct economic returns from our resources are adequately captured and managed for the long term, and be used for development, right down to people in our districts and communities,” Mr. Smare said.
Mr Smare, the former long-serving Chairman of Nambawan Super, said from his experience “The growth of the country’s superfunds like Nambawan Super and Nasfund from mere hundreds of millions, to over K15 billion in 20 years for the benefit of millions of superfund members and their families, demonstrates the value of putting away money for the long term to support you in times of need, and the country can do this for itself by saving and investing a significant portion of its resource revenues in the SWF for the future.
“The legislation for an SWF has been existence for over a decade, but the political will has previously been lacking. However, the Prime Minister’s commitment is a very important step in the right direction and this important statement by Prime Minister Marape should be recognized and applauded.”
He acknowledged Prime Minister Marape’s observations that the establishment of a Sovereign Wealth Fund has been effected in law, but this is the first time a government has shown its determination to have the SWF set up to ensure a saving’s culture for the government, through its resources revenue.
“The resource sector has always been a willing party in the setting up of a Sovereign Wealth Fund for the country. And I am sure the resource sector, as well as the entire business community, will work closely with government to ensure this is achieved in a timely and proactive manner,” Mr. Smare said.
