Papua New Guinea (PNG) faces real challenges in ensuring the benefits of growth are translated to improving quality of life for the people of PNG and not just for a wealthy few landowners.

Whilst PNG is considered by many to be one of the fastest growing economies in the world[1], the cost of doing business is probably one of the most expensive. The World Bank’s “Ease of Doing Business 2013” ranked PNG at #113 out of 189 countries.[2] The current government has begun work on a range of incentives aimed at encouraging and supporting SME growth in an attempt to reduce the difficulties of operating in PNG. Some of these incentives include tax breaks, state buying commitments and the provision of subsidised finance. 

The expected growth of PNG’s SME sector in the next couple of years should bring a number of benefits to both PNG citizens and foreign businesses.  The growth of the SME sector will not only mean the corresponding growth of a middle class with disposable income, but will also mean more people being employed.  It has been reported that the PNG government plans to boost the number of SMEs from 49,000 to 500,000 by 2025.  This additional growth is expected to create two million extra jobs.[3]  Undoubtedly both local and foreign businesses will benefit from the increased trade and business opportunities brought about by the growth of the SME sector.

SME & Infrastructure

Last year at the Australia Papua New Guinea Business Forum, PNG’s Prime Minister Peter O’Neill recognised the cost of doing business, delivery services and the cost of living is increasing because of poor infrastructure.  In order to deal with the infrastructure issues the PNG government has increased budgetary spending to record levels.  A number of multi-billion Kina projects have already been implemented to improve infrastructure; for example, the Sepik Highway and the upgrade and sealing for both the Hiritano and Mahi Highways.


An unprecedented level of political stability in PNG has given rise to a stable government and increasing investor and public confidence.  The expected resulting growth of PNG’s SME sector is likely to offer new opportunities for local and foreign business.