PNG Facing Deepening Fiscal Crisis, Nomane Says
The country is heading into a deepening fiscal crisis driven by “excessive borrowing, chronic deficits and mismanaged spending,” Chuave MP James Nomane warned yesterday. He said PNG was being pushed toward a debt trap that would take years to undo.
Nomane said that since taking office in 2019, the Marape Government had presided over rising debt levels and repeated breaches of fiscal laws. He said the 2019–2025 budget reports showed the Government’s public messaging did not match the state of the books.
He said PNG’s debt had doubled to roughly K65 billion, with more than K40 billion borrowed in six years. He said this increase far exceeded the debt-to-GDP limit under the Fiscal Responsibility Act and that the Government had abandoned its own commitments to fiscal consolidation.
Nomane said interest repayments now exceeded K2.5 billion each year and were expected to hit K3.5 billion in 2025. “We are spending more on interest than on most essential services. That alone is alarming,” he said.
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| PNG Facing Deepening Fiscal Crisis, Nomane Says |
He said successive deficits had worsened PNG’s financial position. The 2024 deficit stood at K6.6 billion, and the 2025 MYEFO showed a further K5.9 billion shortfall. He said the deficits had been financed largely through Treasury Bills and external loans, which added new repayment pressures.
Nomane said Treasury’s appetite for domestic borrowing had put strain on local markets. He referenced warnings from the central bank that persistent government borrowing was crowding out private investment and reducing access to credit for SMEs, which he said were essential for job creation and economic diversification.
He said spending outcomes had not justified the size of the budgets. The Public Investment Program had reported poor delivery rates, while NRI and INA had highlighted widespread procurement concerns, incomplete projects and a lack of transparency. “We have had big budgets but poor results. The country is not seeing improvements,” he said.
He pointed to the World Bank’s assessment showing real incomes stagnating below 2013 levels and rising poverty. Education and health outcomes had also worsened, while crime, insecurity and the strain on provincial services continued to grow.
Nomane said Devpolicy findings showed that district-level service delivery had deteriorated due to centralisation and inconsistent DSIP flows. He said provinces were still waiting on several function grants, and there was no clarity on major expenditure reports, including COVID-19 funds.
He said the Government’s response to global challenges had been weak. “It is not the external shocks that crippled PNG. It is the failure to manage them effectively.”
Nomane said MPs had a constitutional responsibility to address the crisis. “Parliament must bring honesty back to budgeting. PNG cannot afford further drift,” he said.
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