Opposition Leader and Member for Chuave Open, James Nomane, has taken the Government and Treasurer Ian Ling-Stuckey over the country’s economic management with regards to greylisting and declining Kina.
He accused the Treasurer of failing to act on warnings that led to the country being placed on the grey list by the Financial Action Task Force.
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Raising a question without notice in Parliament this morning, Mr. Nomane said the Government had two years to respond to concerns raised in the 2024 Mutual Evaluation Report but failed to take meaningful action, resulting in Papua New Guinea being placed on the global anti-money laundering watchdog’s grey list.
“We have now been grey listed after two years in which the Treasurer has done nothing about the matter,” Nomane told Parliament.
“He was given the Mutual Evaluation Report in 2024, but no action was taken, and now we find ourselves in this situation,” he said.
Mr. Nomane warned that the implications of the grey listing could be serious for the country’s fragile economy.
While some may dismiss the move as insignificant, he said Papua New Guinea’s heavy reliance on imports means the decision could have far-reaching consequences for foreign investment and inflation.
“It is easy to say in this Honorable House that grey listing does not affect us because we are a country of subsistence farmers who own our land,” he told Parliament.
“But because our country is import-dependent, this decision has a real impact on foreign investment and inflation.”
The Opposition Leader also turned his attention to the weakening of PNG Kina, criticizing the Government’s 21-point crawl-peg depreciation strategy announced in 2024.
Mr. Nomane said the policy had remained unclear since its introduction, with no indication of when the currency’s decline would stop.
“When the Treasurer first announced the strategy, it remained opaque, and to date we still do not know when the depreciation of the kina will end,” he said.
Mr. Nomane pointed out that the kina had fallen to about 19 US cents, describing the level as unprecedented and a sign of growing economic pressure.
He then pressed the Treasurer with three direct questions: how the Government intends to tighten monetary policy, how it plans to increase foreign exchange reserves, and what structural reforms will be implemented to strengthen the agriculture sector.
Mr. Nomane said the economic challenges are already being felt by ordinary Papua New Guineans struggling with inflation.
“The people of Papua New Guinea are being hit by inflation and the rising cost of living,” he said.
“Many families cannot afford basic items such as rice and canned fish, and these pressures are being felt across the country.”
“I expect the good Treasurer to tell the people of Papua New Guinea how the Government will address these issues,” Mr. Nomane said.
Treasurer Ling-Stuckey, strongly rejected the accusations, saying claims that he had failed to act on FATF compliance were incorrect and based on poor research.
Responding in Parliament, Ling-Stuckey said the Government had already established a National Coordinating Committee responsible for addressing the country’s FATF compliance issues, overseeing the work of 23 agencies dealing with matters related to the grey listing.
“I want to thank the Opposition Leader for his questions, but firstly I must correct him. I have not been sitting on my laurels with work related to FATF. Again, you just get the facts wrong,” the Treasurer said.
Ling-Stuckey told Parliament that he was appointed chairman of the committee in June last year, months after the Mutual Evaluation Report was completed in October 2024, which outlined about 40 reform measures that needed to be addressed.
Turning to concerns about foreign exchange shortages, the Treasurer said the Government inherited a serious backlog when he took office, with more than K2.4 billion in outstanding foreign exchange orders.
“At that time businesses were waiting between 12 to 18 months, sometimes even longer, to access foreign exchange,” Ling-Stuckey said.
He said the Government, working with international partners, introduced a plan aimed at achieving what he described as “kina convertibility” — ensuring Papua New Guineans can convert the kina into foreign currencies at any time and in any amount.
According to Ling-Stuckey, the strategy required addressing the long-standing overvaluation of the kina against the US dollar.
Economic advice previously suggested the currency was overvalued by between 10 and 16 percent, he said, which discouraged investment and contributed to persistent foreign exchange shortages.
“Today we are advised that the overvaluation may now be around 1.6 percent,” the Treasurer said, adding that this figure would be reviewed again when officials from the International Monetary Fund arrive in Papua New Guinea later this month for the sixth review of the country’s economic program.
Ling-Stuckey said the Government’s approach was based on the theory that once the currency reflects its real value, investors will view the Kina as good value and increase foreign direct investment in the country.
He added that significant inflows of foreign currency are expected once major resource projects reach final investment decisions, which could eventually strengthen the exchange rate and improve foreign exchange availability.
The Treasurer also outlined government spending aimed at strengthening the agriculture sector.
He said the Government is injecting around K300 million into agriculture this year, including increased funding for the coffee industry through the Coffee Industry Corporation and additional support for cocoa and oil palm programs.
Ling-Stuckey said more than K90 million has been allocated to support the coffee sector, while funding for cocoa programs has been increased to about K45 million.
Additional funds are also being directed to oil palm development and rural agricultural infrastructure.
He also highlighted export support programs funded through the Department of Agriculture and Livestock and supply chain improvements through the Fresh Produce Development Corporation.
In addition, the Government is investing heavily in infrastructure to improve farmers’ access to markets, including K815 million allocated for roads and bridges through the Department of Works and Highways.
Funding has also been directed toward improving port infrastructure through PNG Ports Corporation to support export growth.
Ling-Stuckey said these initiatives form part of a broader strategy to strengthen agriculture, boost exports and support long-term economic growth.
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The Treasurer said he would provide further details and additional figures later this week if required.