ECONOMY

GDP – K110 Million (2022)

GDP/Capita – K 9336.63

Merchandize Trade Balance- (PGK) 20,990.6

Current Account Balance – (PGK) 11,635.4

ENVIRONMENT

Total Land Mass: 462,840 km2

Forest Area: 333,244.8 km2

Population Density per km2 – 25.45

Exclusive Economic Zone: 2.4 Million km2

Fisheries

Papua New Guinea has an extensive and valuable fisheries sector ranging from inland river fisheries, aquaculture, coastal beche-de-mer and reef fisheries to the prawn trawl and large scale deep-water tuna fisheries. PNG’s fisheries Exclusive Economic Zone (EEZ) of 2.4 million square kilometres is the largest in the South Pacific covering an extended reef system and extensive coastline that supply about 18% of the World’s tuna catch.

The fisheries and marine resources sector is a multi-billion-dollar industry that needs proper development to maximise economic returns to the country. PNG controls around 15% of the global tuna trade valued at US$4 billion-US$5 billion (approximately K12 billion – K15 billion; NFA 2022).

The tuna export volumes appear to have stabilised at 200,000 metric tonnes over the last five years, indicating sustainable harvesting, with the export value stabilising around US$450 million (or K1.5 billion) over the same time period.

Coconut

Papua New Guinea’s export of coconut products makes up 1.1% of the World market (KIK, 2022). In 2021, the coconut industry ranks fourth in terms of export revenue generated by major agricultural commodity exports after palm oil, coffee and cocoa by contributing about 3% (K101 million). More than 464,000 households are engaged in the coconut sub-sector. Of these, 71% use coconuts for their own consumption, whilst only 29% is used for commercial purposes.

PNG’s current copra production is 73,000 tonnes, mostly produced by smallholders from declining coconut plantations. The industry has 18 registered exporters, three crude coconut oil (CNO) mills, and one biodiesel plant producing about 720 tonnes of oil per year.

The sector has nine virgin coconut oil (VCO) mini mills showing a shift towards high-value coconut products (HVCP). The potential for more returns from HVCP is yet untapped therefore Papua New Guinea welcomes foreign investment into the sector.

Cocoa

Cocoa is currently produced in 14 provinces in PNG. The industry is dominated primarily by smallholder village growers, who produce 96% of the cocoa beans, whilst the balance of 4% is produced by the plantation sector. PNG cocoa supplies 1% of the World market, and the industry contributed a total of K1.045 billion in export revenue between 2018 and 2021, which is about 7% of total export revenue of all agriculture commodities.

At the present, there is little downstream processing of cocoa in the country. Of the 37,367 tonnes of cocoa produced in 2021, 36,600 tonnes were exported whilst 2% is processed domestically. Therefore, Papua New Guinea welcomes foreign investment in downstream processing and reviving plantations.

Coffee

Coffee remains one of PNG’s important export commodities with a contribution of over K1.8 billion in 2017-2022. Currently the country produces around 47,000 tonnes (2020), which is less than 1% of the World’s total coffee exports. The sector supports more than 450,000 households (24%) and engages approximately 2.5 million people in 18 of the 22 Provinces. The government welcomes foreign investment in downstream processing in the industry.

Oil Palm

The Palm Oil industry remains an important agriculture sub-sector to PNG’s economy. In 2017-2022, palm oil contributed approximately 60% of the total export earnings of the agricultural sector with a value of K7.4 billion from the production of 3.4 billion tonnes of crude palm oil and palm kernel oil.

The Palm Oil sub-sector is a private sector driven industry with many villagers and smallholder oil palm block owners involved. Papua New Guinea embarks on making its oil palm industry sustainable and going beyond the agronomic production of plantations and into full downstream processing of crude palm oil and palm kernel oil to maximise economic gains for the country. Therefore Papua New Guinea welcomes foreign investment into the industry.

Spice

Papua New Guinea offers a number of organically grown spices including vanilla, cardamon, ginger, turmeric, cinnamon, pepper, citronella, and nutmeg. The total volume of spice exports is 300 tonnes in 2023 and is expected to increase to 600 tonnes by 2027. The total export value of spice is expected to contribute 7.9% to the agriculture sector GDP by 2027 from a base of 5.8% in 2023.

Spices offer good potential for large-scale production and becoming significant export commodities. PNG seeks investment to commercialize its spice industry to meet growing domestic and export demand for organic spice products.

Mining

The Petroleum sector in PNG contributes around 17% to the National GDP and employs around 10% of the total employment in the mineral and petroleum sector. The PNG LNG is in operation whilst the new pipeline projects of Papua LNG, Pasca and P’nyang are expected to come on stream in the next three (3) years.

Petroleum

The Mining sector contributes around 13% of the total GDP and employs over 52,000 people from the total of 10 mines operating in the country. Mines operating in the country are Ok Tedi Mine, Lihir Gold Mine, Porgera Gold Mine, Ramu Nickle Mine, Other medium scale mines are Simberi Mine, Hidden Valley Mine and Kainantu Mine. The other three mines are small scale mining. There are also potential for more exploration.

Fresh Produce

Papua New Guinea’s fresh produce industry is estimated to be a K2.5 billion industry at the total market value. The sub-sector sustains approximately 85% of the population in the informal economy with significant potential to develop into merchanting and value-adding of organic food products for domestic and exports. The total value of fresh production in 2023 is K71 million and is expected to increase to K100 million by 2027.

Locally produced food, mainly fresh produce, accounts for about 85% of the national population’s food requirements. The domestic markets are dominated by largely informal open markets, albeit with a growing and more discerning formal market through wholesalers and supermarkets.

Abundant fresh produce in the country include: Sweet Potato, Tomato, Banana, Carrot, Broccoli, Cucumber and other vegetables. Papua New Guinea has potential and seeks investment in commerical farms and agri-business.

Livestock

The country has large areas that are suitable for large-scale cattle, poultry and other livestock farming. Papua New Guinea is seeking investors to revive its livestock industry to meet the growing domestic and international demand. The Government will invest in a national livestock development program, including large-scale cattle breeding and farming, poultry and other livestock. Therefore, Papua New Guinea seeks foreign investment in the livestock industry.

Rice

Rice has now become the staple food for the majority of Papua New Guineans. While PNG produced around 4,800 tonnes of rice in 2020, it imported some 400,000 tonnes at a value of K1.2 billion. Not much effort has been made to support rice farming on a commercial scale to meet the local demands and also for possible export. The government promotes commercial scale rice production and welcome foreign investment into the industry.

Forestry

Forests cover almost 70% of the country’s total land mass of about 46.9 million hectares. Out of this, 77.8% is forested with 13 natural forest types, whilst forest plantations contain various species.

The forestry sub-sector contributes about K400 million annually from its log export tax to the Government and employs overall direct employment of around 9,000 – of whom over 90% are Papua New Guineans.

In 2022, the Government announced a ban on all round log exports in the next 3 to 5 years, and conversely promoted downstream processing. PNG currently exports about 2.9 billion cubic metre of round logs, compared to 112,558 cubic metre of processed forest products.

With the recent policy shift, Papua New Guinea welcome foreign investment in the forestry sector, focusing on downstream processing and other sustainable projects.

Rubber

The Rubber industry has the potential to contribute significantly to the economy. More than 30,000 households are engaged in the industry who produce some 6,000 tonnes annually. Between 2018 and 2022 total rubber export volume was 16,800 tonnes, at an average of 3,300 tonnes per year, and generated K58.5 million in export revenue. Rubber is a sustainable crop that is pest and disease-free and has huge potential for downstream processing and value-adding. Therefore Papua New Guinea welcome foreign investment into the rubber industry.

Tea

The Tea industry of PNG thrived between the 1960s and 1980s but a drop in the World market price in the 1990s greatly impacted production. Since then, the Tea industry has been on the decline with many tea plantations being abandoned. Currently PNG tea production is estimated to be just over 1,000 tonnes per year. Although the entire industry is run by the private sector, there is considerable potential to increase its contribution to the PNG economy.

Manufacturing

The manufacturing sector in PNG has grown from strength to strength in taking advantage of the country’s untapped potentials in agriculture and natural resources for value-adding opportunities. The sector has contributed immensely to the country’s economy, employing almost 3.7% of the population and contributes around 4.8% of National GDP.

The major industries are in brewery, tobacco, food and beverages, fish canneries, agriculture and forest products; and crude refinery of petroleum, palm oil, and metals processing, including gold and precious metals downstream processing.

However, the manufacturing sector remains small and undiversified and holds significant potential. Therefore, Papua New Guinea welcomes foreign investment in the manufacturing sector.

Downstream Processing

Papua New Guinea’s export is predominantly characterized by the export of raw materials therefore PNG is now attempting to diversify its exports through the policy of downstream processing. Downstream processing opportunities of the country lies in its comparative advantage sectors and they are:

• Agriculture: Coffee, cocoa, coconut / copra, rubber, spices, fruits, cassava, potatoes and fresh produce;
• Livestock: Poultry, cattle and pork;
• Forestry: Processing of round logs and timber products;
• Fisheries: Tuna, other fisheries, beach-de-mer, prawns and crabs, aquaculture;
• Mining and Petroleum: Gold and precious metals and copper refinery, Petroleum Oil refinery, LNG Gas condensation and refinery

PNG is committed to the establishment of Special Economic Zones and relevant infrastructure that will support the policy of downstream processing.

Services

Papua New Guinea is a net service importer and as any other country is in need of efficient and reliable services to sustain and boost its economy. Therefore Papua New Guinea welcome foreign investment in financial, health, telecommunications and transport services.

Banking & Financial Services

A financially inclusive population is a move towards a stronger and more sustainable economy. Currently, an estimated 70% of the country’s population does not have access to formal financial markets and services. Poor financial accessibility in PNG is perpetuated by limited infrastructure; a diverse and often geographically remote population; limited participation in the formal economy by most Papua New Guineans; and limited exposure to the formal financial sector and high levels of financial illiteracy.

With nearly 80% of the non-banking population, Papua New Guinea welcome foreign investment in the banking industry.

Energy

PNG is a global energy frontier with vast renewable energy reserves that remain largely underutilized. The country’s energy potential is pivotal for both domestic growth and regional energy security, blending cultural heritage with modern energy solutions.

Papua New Guinea acknowledging its diverse and renewable energy potential, is committed to sustainable energy development to unlock the opportunities in its energy subsectors such as geothermal, hydro, solar, and bioenergy resources. Papua New Guinea welcomes foreign investment in the energy sector.

Special Economic Zones

Papua New Guinea is a dynamic country that offers investors unparalleled access to one of the fastest-growing regions in the world. Situated in the heart of the Pacific, Papua New Guinea is strategically located to serve as a gateway to Asia, Australia, and beyond. With diverse range of industries, and abundant natural resources, Papua New Guinea presents an exciting opportunity for investors looking to tap into the region’s potential. Papua New Guinea welcome investment in Eco – Tourism Zones, Special Agro-Industrial Processing Zones, Export Processing Zones and other types of Special Economic Zones.

PNG is committed to developing SEZs hence is willing to offer investment incentives to investors.