The major cause of the lack of foreign exchange is trade imbalance.
According to Acting Chief Trade Officer Richard Yakam, import service are costing the economy about K5 billion and that the constant increase and leakage in the economy is causing an imbalance in trade.
“This leakage in the economy has resulted in the forex issue that means more currencies are going out and that has impacted the Kina value,” he said. “The trade-in services particularly importing services such as the hiring of engineers in the mining areas, sub-contractors engagements in project sites, and recruiting of foreign professionals, and seeking medical treatment overseas are all added that is costing the country’s economy running into billions.”
Import services are also increasing, he said. The challenges in these sectors are therefore huge.
“For manufacturing sector across the board, I can’t give you a figure, but from the import of services like those who provide support services in the extractive sector is constantly increasing and is running into K5-K6 billion,” he said. “The cost of manufacturing itself is very high as well, mainly because of utility costs that hinder the growth and expansion in the economy like the freight costs, water, electricity, internet costs and infrastructure.”
The sad part, he said, is that the SMEs in the manufacturing sectors face challenges in meeting international standards for consumption reasons.
“This is one of the challenges that are faced by some of our local manufacturers who are not up to standard and it continues to be an impediment in the growth and expansion of the industry,” he said. “In the instances where the country is going for a third lockdown, while we are putting in restrictions we are killing the economy. Otherwise, the government should implement the COVID-19 Act and allow the business to continue.”
