IMF program review behind schedule

Minister Assisting the Prime Minister on Treasury matters, Ian Ling-Stuckey said it is disappointing to find that there are pending reform deadlines that risk the IMF program falling off track, potentially leading to a delayed disbursement of the next tranche of financing under the IMF program.

The first six-month IMF review under the program was completed on schedule in November, and program performance was assessed as 'strong,' with all program targets met and financing disbursed on schedule.

Stuckey during a meeting with the IMF country representative Sohrab Rafiq on March 19, 2024, discussed progress on the policy reforms under the IMF program.

He confirmed that easily achievable reforms in the second review of the IMF program that are behind schedule include:

1. The Government needs to quickly fill vacant board positions and Deputy Governor positions at the BPNG with qualified candidates who possess a strong understanding and experience in monetary policy and financial stability issues, which are crucial to safeguarding the prosperity of the country.
2. The second aspect pertains to modernizing and reforming the operations of the BPNG. This will require Parliament to pass amendments to the country’s Central Banking Act (CBA) at its earliest convenience. These reforms aim to address remaining issues related to the BPNG’s mandate, governance, and accountability, as well as to improve financial regulation and supervision. The new CBA ensures the BPNG follows international best practice.
3. Government of PNG need to act swiftly to adopt key implementing regulations related to the Independent Commission Against Corruption (ICAC) law. These regulations will specify operational processes for ICAC to fulfill its preventive, investigative, and prosecutorial mandates, as well as ensure the sharing of information across relevant entities.

There is no need for Government agencies to delay passing these regulations and reforms, which are important in improving governance and transparency, and safeguarding the country’s future prosperity.

Stuckey is urging relevant government agencies to make an urgent effort to meet the strict deadlines outlined in the IMF program.

This is critical in ensuring the successful completion of the second review under the program, which will allow for the timely release of IMF financing.

This money plays a critical role in maintaining macro-financial stability as it allows the government to fund its budget using very cost-effective resources and ensures the country maintains a healthy level of foreign exchange.

In March 2023, the Government of Papua New Guinea agreed to a 38-month, approximately US$1 billion financing package to be used to support the Government’s reform agenda.