19 Feb 2016

Signs of cash flow crisis in PNG

2:41 pm on 19 February 2016

There are more signs of a cash flow crisis in Papua New Guinea.

Many public servants have complained about not being paid wages and funds for basic services in the provinces appear to have dried up.

Since last year, PNG's forecast revenues in the oil and mining sectors have dropped significantly.

In the meantime, PNG's government continued to spend expansively on items like the South Pacific Games and infrastructure projects.

The government said it expects solid economic growth this year,

But the head of PNG's chamber of commerce Michael Mayberry said that with the sharp decline in global commodity prices, the inflow of foreign currency has been substantially reduced.

"There's limited foreign currency available, some of the importers can't get stock and so therefore their sales will go down and then their amount for taxes will go down as well. So there's some quite fundamental issues going forward."