Dried-up funds from the Papua New Guinea central government have prompted the Autonomous Bougainville Government to put all payments to service providers on hold.
A circular from the ABG's Acting Secretary for Finance, Brenda Tohiana, informed public departments that she has no option but to stop all commitments and payments until the cash flow situation improves.
A journalist with New Dawn, Aloysius Laukai, says government accounts have been closed since December.
"The accounts were supposed to be opened on the 26th (January), that's today. But instead of opening, becasuse of the cash flow concerns, they made the announcement that there won't be any commitment or payment until they have funds from the national government."
The ABG says it is communicating with the Department of Treasury in Waigani in the PNG capital on the issue.
Ms Tohiana said that departments have been experiencing extreme difficulties with needs such as power, office materials and that the situation could become worse.
Departments have also been advised to exercise prudent management on credit arrangements and not make any unnecessary commitments on items like vehicle hire.
Upcoming referendum hampered
Mr Laukai says the lack of cash is hampering Bougainville's ability to prepare for the upcoming independence referendum, which Bougainville is mandated to hold within the next few years.
He says it is very disruptive to progress on Bougainville.
"It's actually making it difficult for the Autonomous Bougainville Government to deliver services to the people and to prepare for, prepare people for the referendum. There's no awareness in the villages on the Peace Agreement, on the referendum, a lot of issues. Most of this is because of the funding problem."
