ARTICLE · 06 MARCH 2011

Papua New Guinea As A Borrower – What Is Involved?

Pacific Legal Network

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As the PNG economy grows and the need for capital increases, the borrowing powers and the sovereign immunity of the Independent State of Papua New Guinea (State) become more important to understand.

AustraliaStrategy

Michael Sullivan

REGULATION OF THE BORROWING POWERS

There are various statutes regulating the borrowing powers of the State.

Public Finances (Management) Act 1995 (PFMA)

The PFMA is the main Act of the PNG Parliament which regulates the borrowing powers of the State. The most relevant sections of this Act regarding the raising of loans are:

Restrictions on Borrowing (Section 35)

The State may not borrow except under and in accordance with an Act of the Parliament.
Moneys borrowed under Subsection (1) from whatever sources must not exceed the limit provided for by the Central Banking Act 2000.
All debt charges for which the State is liable in respect of loan moneys must be charged on the Consolidated Revenue Fund.

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