With more than 80% of the population relying on subsistence farming, agriculture is an important sector in in Papua New Guinea (PNG). Together with allied sectors such as forestry and fishing, it accounts for 25% of the GDP.
Agriculture contributes 18% in value terms to PNG’s exports, with more than 85% of the value of exports coming from three high value crops - coffee, cocoa, palm oil and from the fisheries sector. However, challenges such as poor access to markets and credit, lack of extension services and training, and lack of adequate infrastructure for post-harvest produce reduce farmer incentives.
Opportunities for the private sector exist across the entire agriculture value chain – from provision of high quality agricultural inputs and extension services to improve crop productivity and quality to processing of agri-produce such as coffee, cocoa, palm oil, and fisheries as well as fresh agri-produce such as sweet potato, galip-nut & kava. The private sector can also play a key role in building the farm-to-market value chain by establishing local market linkages, aggregation and processing centres for value added products leading to a more commercially-oriented agriculture sector in PNG.
Papua New Guinea (PNG) is bestowed with excellent marine resources. Its fisheries zone, the largest in the South Pacific region, extends to 2.4 million square kilometres. In 2011, the fishery segment contributed around 15% to agricultural exports by value. Tuna fish, both processed and unprocessed, accounts for over 85% of exports from the sector.
While the large fisheries zone provides significant opportunities, it also presents challenges for the PNG government in terms of monitoring and control of fishing activity across its coast line. The private sector landscape in the fishery segment ranges from large scale fish processing companies engaged in deep water tuna fishing to small and medium enterprises that fish coastal or inland water fish such as sea cucumbers, prawns and small tuna and local community farmers who are involved in inland river fisheries mainly for subsistence living.
Small, private fisheries can serve domestic and international demand from neighbouring countries for tilapia, carp and trout. Significant opportunities also exist for supporting larger processing industries in packaging and labelling of produce, and providing logistics support.
Financial inclusion is necessary to drive inclusive growth in an economy. Around 85% of the total population in Papua New Guinea (PNG) is unbanked with the highest numbers of unbanked people residing in the Highlands and Momase regions. Only about 7% of the total adult population has access to credit from a formal financial institution. Micro-insurance is very nascent in the country and about 41% of the working population does not have life insurance.
The lack of strong distribution systems for banking services is seen as a key challenge in serving remote rural customers. Limited financial literacy and lack of ready-to-use financial information for consumption by the rural population further intensifies this challenge.
Community Based Organizations such as NGO-MFIs are involved in providing access to micro credit and conducting financial literacy drives. A very small number of commercial banks offer micro-savings solutions to low income customers in PNG.
A nascent market and growing demand for micro-credit present opportunities for private sector enterprises that seek to achieve impact and financial returns.
For households in remote rural areas of Papua New Guinea (PNG), electricity access is a luxury. Grid electricity covers only around 16.7% of all households; the situation is worse in rural areas where electricity penetration dips to around 6%. Kerosene is the most commonly used source of lighting for approximately 45% of the households in PNG. More than 80% of the households are dependent on traditional sources of energy such as firewood for cooking.
Extending grid connection is extremely challenging given PNG’s geographic landscape. Its renewable energy potential, however, is enormous with proven energy potential in Hydro, Solar, Bio-Mass and Wind energy. This potential for generating off-grid renewable energy is largely untapped and presents an opportunity for the private sector. Solar lighting and heating systems and bio-mass cooking solutions are some of the products that could find a sizable market in PNG. Private sector enterprises with renewable and off-grid energy solutions could also find viable commercial customers in various industry segments such as mining, food and fisheries storage and processing.
Promoting renewable energy based solutions presents private sector enterprises opportunities to build a sustainable business, achieve environmental impact and mitigate a huge challenge to the development of PNG’s low income population.
While the Government and civil society organizations have invested significant resources in building healthcare infrastructure in Papua New Guinea (PNG), the reach of medical services in remote and rural areas is poor. Communicable diseases such as malaria, typhoid, tuberculosis and HIV/AIDS account for 50% of the total deaths each year. The country also bears a growing burden of non-communicable diseases.
Healthcare delivery in PNG is plagued by a multitude of supply side challenges including lack of trained professionals (only 0.58 health workers per 1000 people), inadequate diagnostic facilities, no commercially viable models for last mile delivery, and lack of adequate supply of medicines. Many villages in the country lack basic primary healthcare infrastructure, and patients have to travel long distances to get to the nearest medical facility. On the demand side, high out of pocket costs and poor health seeking behaviour of the people are the major deterrents for the growth of the sector.
The sector presents opportunities in affordable diagnostic services, distribution of low cost medicines, and training for healthcare professionals. Given the difficult terrain, PNG has the potential for uptake of innovative service delivery models such as mobile clinics. In addition, models to capture and disseminate health information (disease incidence, use of pharmaceuticals, preventive care) by leveraging ICT and mobile technology would contribute towards strengthening the healthcare ecosystem.
Water and Sanitation (Watsan)
Only 40% of the population in Papua New Guinea (PNG) has access to safe drinking water and less than 55% have access to basic sanitation facilities. Geographic constraints, especially in the highlands, make it difficult to provide access to clean drinking water and improved sanitation facilities to remote rural communities. This has led to a high child mortality rate and high healthcare expenditure in PNG. The unsafe water and sanitation situation, stemming from the lack of facilities and awareness of hygiene among people, has resulted in the recent spurt of Diarrhoea and Cholera cases.
Although private sector activity in Watsan is still at a nascent stage, there are opportunities in the waste-to-energy segment given the high volume of industrial waste generated by mining and oil & gas companies in PNG. Opportunities for the private sector also exist in the safe drinking water and improved sanitation segment in collaboration with PNG government’s development plan of providing improved Watsan services to a majority of the population by 2030.
Papua New Guinea’s (PNG) has youth power, with nearly 50% of the population being less than 20 years of age. Armed with the right skills and education, this population can contribute towards the economic prosperity of the country. The PNG Government recognizes the importance of the sector and in 2014, has committed to providing free education up to grade 10 and subsidising tuition fees for higher grades up to the tertiary level.
The sector is largely driven by Government policies and investment, and is grappling with a multitude of challenges such as limited infrastructure, insufficient teaching equipment, out-dated curriculum, and lack of qualified teaching staff on the supply side, and high drop-out rates, particularly of female students, on the demand side. High fees for tertiary education also contribute to significant drop-out at this stage.
These challenges point to opportunities for private players, who are present largely in the vocational education space. Greater presence in this space will provide an impetus to the growing industrialization of the country which is constrained by the need for skilled workforce across sectors such as mining, food processing, healthcare and clean energy.