BY GORETHY KENNETH
PAPUA New Guinea plans to have 500,000 small to medium enterprise (SME) companies by 2030, an increase from the current 50,000.
“The country’s informal sector is worth 20% of the GDP and is valued at an estimated K12 billion a year, taking the extractive sector out, it is worth 30 per cent of our GDP.
“Papua New Guinea has a dual economy, which basically consist of the formal and informal economic sectors. The formal sector consists mainly of registered companies both local and foreign owned that make up the formal private sector.
“The other sector is the informal sector which consists of individuals and families who do not have formal registered companies. This sector is where 80 per cent of our people live in our rural villages and community and work and trade and do business in mainly markets in our town and cities and along our highways also referred to as our informal cash economy.
“Therefore together, the MSMEs contribute to 30 per cent of our GDP, provides employment and economic participation of 80 percent of our people, the largest by any sector. Our MSMEs drive our economy forward and provide food and shelter for millions of our people.”
“We also need to deal with the failure rate of MSMEs in Papua New Guinea, our region over the recent years. We know the challenges that are faced in small business. In Papua New Guinea, for example, 90 per cent of our formal business sector is still owned by foreigners, 80 per cent of our people over the age of 18 still do not have a bank account and the SME sector is only employing 20 per cent of the formal sector labour force. The best way to create mass employment and create wealth for our citizens, as is proven the world over, is through empowering our SMEs.
“In Malaysia for example, there are around 450,000 SMEs, in Australia there are three million SMEs, and Indonesian has 50 million MSMEs. In Papua New Guinea, we need more. I am happy to report that the government has done the following to recognise and drive the MSME sector to grow. We are currently reviewing our informal sector policy and based on lessons learned over the past 15 years, we will formulate and launch a new policy and plan to support the micro business sector.
“In 2016 our government launched our first and most comprehensive SME policy 2016-2030 which has the key target to grow our formal SME sector from 50,000 companies to 500,000 by 2030.”