The Asian Development Bank (ADB) has reaffirmed its strong commitment to Papua New Guinea’s development, praising the Marape-Rosso Government for its sound macroeconomic reforms and announcing a significant scaling up of investments in transport, energy, education, health, and agriculture.
Speaking during the PNG and World Economic Update, a high-level economic briefing chaired by Prime Minister Hon. James Marape, the ADB Country Director, Mr. Said Zaidansyah, described PNG’s reform progress as a foundation for building resilience amid growing global uncertainty
The event, attended by Cabinet ministers, governors, MPs, departmental heads, and major international financial institutions, focused on assessing PNG’s economic outlook and guiding spending priorities for sustainable development.
Economic Stability Recognised
ADB Senior Economist Sudyumna Dahal presented a cautious but optimistic outlook for PNG, noting that while global headwinds such as escalating US-China trade tensions and rising tariffs may slow growth regionally, Papua New Guinea is on a solid recovery path.
- GDP growth in 2024 has been supported by both resource and non-resource sectors, especially mining, agriculture, communications, and hospitality.
- Inflation has declined to its lowest level since 2007, aided by telecommunications price competition and lower betel nut costs.
- The fiscal deficit has fallen from 9% of GDP to just over 3%, with debt levels projected to stabilise and decline.
“These improvements are the direct result of strong macroeconomic management and difficult but necessary reforms,” said Mr Zaidansyah. “We congratulate the Prime Minister, Deputy Prime Minister, Treasurer, and Government for this important progress.”
Development Challenges Remain
However, ADB warned that underlying structural barriers still constrain inclusive growth:
- Access to finance remains one of the lowest in the region. Only 17% of PNG’s GDP comes from private credit—compared to 86% in the Pacific average and 114% in Fiji.
- Over two-thirds of Papua New Guineans remain unbanked, with high lending rates and low deposit rates creating a “financial inclusion gap”.
- Education, health, and infrastructure still face major constraints, while power blackouts, law and order, and business costs remain high.
“As external shocks increase, PNG’s internal resilience becomes more important than ever,” said Mr Dahal.
“That means fixing energy, expanding access to finance, and improving service delivery.”
ADB Expanding Support Across Key Sectors
Mr Zaidansyah outlined the ADB’s expanding K6.6 billion (US$1.74 billion) portfolio, now spanning transport, energy, aviation, education, health, and public sector reform.
1. Transport and Aviation (60% of Portfolio)
ADB is a key partner in delivering the Connect PNG programme:
- Highlands, Momase, Islands and Northern Corridor Road upgrades
- Rural airstrips in East New Britain and Milne Bay
- 20 airports under the Civil Aviation Development Investment Project
- Support for Air Niugini’s re-fleeting programme, including runway extensions to accommodate new Airbus aircraft
“We started in the Islands, but now our reach spans the Highlands to the coast, and we are proud to support national connectivity,” said Mr Zaidansyah.
2. Energy Sector Reform and Investment
ADB is investing heavily in clean energy and sector reform:
- Hydropower rehabilitation in Yonki, Gazelle and Port Moresby
- Mini-grids in West New Britain
- A Sustainable Energy Sector Development Programme focused on policy reform, PPL capacity, and transmission upgrades
- Strategic outcomes from the recent National Power Sector Forum hosted in Port Moresby
3. Human Capital: Health and Education
- ADB is boosting investment in healthcare and technical education:
- Support for provincial and district hospitals across multiple provinces
- Upgrades for TVET colleges in Bougainville, Chimbu, Western, Goroka and Port Moresby
- Planned expansion into primary and secondary education beginning in 2026
4. Public Sector Reform and Financial Inclusion
- SOE reform, public sector efficiency, and support for Bank of PNG’s refinancing and guarantee facility
- Technical support to help avoid or shorten greylisting by the Financial Action Task Force through AML/CTF compliance improvements
5. Water, Sanitation and Agriculture
- Planned projects with Water PNG to upgrade water supply in Rabaul and Port Moresby
- Re-entry into agriculture after 30 years—partnering with the Department of Agriculture on fresh produce supply chains and sustainable forestry, with support from the Japanese Government
A Partnership Built on Trust
Mr Zaidansyah emphasised that ADB has been a reliable partner to PNG since 1971, even before independence, and continues to evolve in line with PNG’s national goals.
“From road corridors to hydropower, hospitals to high schools, we are here for the long term,” he said. “Our aim is to help PNG not just grow—but grow fairly, inclusively, and sustainably.”
Prime Minister Marape thanked ADB and all partners for standing with Papua New Guinea through both economic recovery and development challenges.
“We are rebuilding our country from the ground up—economically, socially, and structurally,” the Prime Minister said. “Thank you for believing in our potential.”
