Sovereign wealth fund is important as government savings for PNG’s economic future

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Sovereign wealth fund is important as government savings for PNG’s economic future

08 Sep 2021

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 up to a Sovereign Fund.

Prime Minister Marape made the announcement when receiving a dividend of K100 million from Kumul Petroleum Holdings Ltd (KPHL) on August 18.

PNG Chamber of Mines and Petroleum Chairman Anthony Smaré said this was a good sign of the government’s commitment to ensure that the economic benefits of resource sector projects are properly accounted for. , properly invested and managed for the long term.

“The resource sector contributes about 28% per year to PNG’s economy. Although this has a massive indirect multiplier effect in the form of jobs, crucial infrastructure and support for education and health. There is still a misconception as to how the real economic returns to the sector are recorded and properly valued.

“The creation of a sovereign wealth fund with strong and transparent management processes will ensure that these direct economic returns from our resources are properly captured and managed in the long term, and used for development, down to the inhabitants of our districts and communities,” ‘said Mr. Smaré.

Mr. Smaré, the long-time former chairman of Nambawan Super, said from his experience: “The growth of the country’s superfunds like Nambawan Super and Nasfund from a few hundred million to over K 15 billion in 20 years for the benefit of millions of superfund members and their families, demonstrates the value of putting money aside for the long term to support you in times of need, and the country can do it on its own by saving and investing some significant amount of its resource income in the SWF going forward.

“The legislation for a sovereign wealth fund has been around for over a decade, but the political will has been lacking before. However, the engagement of the Prime Minister is a very important step in the right direction and this important statement by Prime Minister Marape must be recognized and applauded. ‘

He took note of Prime Minister Marape’s observations that the creation of a Sovereign Fund has been achieved in law, but this is the first time that a government has shown its determination to have the SWF in place to ensure a culture of savings for the government, through its resources. returned.

“The resource sector has always been a willing party in setting up a sovereign wealth fund for the country. And I am sure that the resource sector, as well as the entire business community, will work closely with the government to ensure that this is done in a timely and proactive manner, ”Mr. Smaré said.

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PNG Chamber of Mines and Petroleum published this content on September 08, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on September 08, 2021 01:41:01 PM UTC.


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