PM Marape’s Kina Devaluation Disaster: Inflation and Crisis Loom for PNG

PM Marape’s Kina Devaluation Disaster: Inflation and Crisis Loom for PNG

​​Papua New Guinea’s Opposition Leader, James Nomane, has blamed the devaluation of the kina on what he described as reckless economic management by the government. In a statement, Nomane claimed that the Marape administration is now grappling with managing foreign currency loan repayments and appeasing the International Monetary Fund (IMF).

“Prime Minister Marape has suggested that the devaluation was inevitable and beneficial for exports, but this is far from the truth. The devaluation was planned, not inevitable,” Nomane said. He emphasized that while devaluation may make PNG exports cheaper, the country has not invested in agriculture to boost production and export volumes, which would help address the trade deficit. He warned that the devaluation will lead to higher import costs and drive up domestic prices, worsening the cost-of-living crisis.

Nomane criticized the government for focusing on borrowing to fund projects like Connect PNG, which he described as benefiting a select few while the country suffers. He also pointed to the K2.4 billion state guarantee for a solar power project in Gusap, Madang Province, as an example of a questionable investment, noting that the company involved had limited credentials.

The Opposition Leader expressed concern over the government's influence on the Central Bank, calling it a threat to the institution’s independence. He argued that Prime Minister Marape’s approach undermines the economic reforms initiated by former Prime Minister Sir Mekere Morauta, which had established the Central Bank as an independent entity.

Nomane further cautioned that the devaluation will have far-reaching consequences, including increased inflation, a higher cost of living, lower creditworthiness, and reduced investor confidence. “We will not attract foreign direct investment if the economy continues on this downward spiral,” he warned, adding that the government’s excessive borrowing and failure to address debt repayment challenges are driving the economy into deeper trouble.

Also read

• Brutal Crime Wave in Port Moresby: Governor Parkop Pleas for CCTV and Stronger Police Command
• Minister’s Dire Warning: PNG’s Tourist Numbers Plummet Amid Safety Fears
• ​City Lights Go Off as Dirio Shuts Down Over K240m PNG Government Debt
• Fed Up with PNG: New Ireland Eyes Independence!

​