Enabling economic growth in Papua New Guinea


After a period of higher economic growth, the last two years have seen PNG face more challenging economic conditions as key commodity prices have fallen and foreign investment has slowed. Australia’s aid is helping PNG manage this challenge by improving fiscal management and supporting diversified and inclusive economic growth through the private sector, led by both women and men. We also support PNG’s efforts to ensure revenues from natural resources benefits current and future generations, including through the implementation of an effective Sovereign Wealth Fund.

Australia has increased support for private sector investments, which reduce the costs of doing business, reduce risk and improve productivity. We support improvements in transport infrastructure, the business enabling environment, agriculture and rural development, innovation and business partnerships, and financial inclusion. All investments have a strong focus on women’s economic empowerment and financial opportunities, particularly in rural areas (See also Investments for Enhancing Human Development).

In recognition that inadequate and poorly maintained infrastructure creates significant costs to doing business, and constrains economic growth, Australia’s aid investments in infrastructure are expected to increase from 37 per cent of the program to approximately 50 per cent by 2017. Our infrastructure programs support both construction and maintenance activities as well as advisory support for PNG’s larger scale infrastructure investments.

Responding to businesses’ and government’s need for more skilled employees, Australia is increasing aid investments in youth skills training and job placements, technical and vocational education and training, and higher education (see also Investments for Enhancing Human Development).

The Australian High Commission hosts regular PNG business and development roundtable meetings and we also engage with the Australia – PNG Business Council, which focuses on developing and supporting trade and investment between Australia and Papua New Guinea. Australia will also provide targeted assistance to help PNG comply with trade and investment obligations. We are supporting PNG’s preparations to host the Asia-Pacific Economic Cooperation (APEC) forum in 2018.

Related initiatives

Transport Sector Support Program

Phase 2: Up to $400 million, 2014-2019

The PNG-Australia Transport Sector Support Program (TSSP) has been the primary Australian Government investment in transport infrastructure in PNG since 2007. The long term development goal of TSSP is a safe, reliable transport system that enables economic and social development in PNG. The majority of TSSP funding is spent on roads through Papua New Guinea’s Department of Works, directly assisting it to maintain sections of the core network of 16 National Priority Roads.

In 2014, TSSP entered its second phase. This will see the program gradually transition to supporting larger, more complex highway rehabilitation projects for economically important roads, while handing more responsibility for routine road maintenance to the Government of Papua New Guinea. TSSP funding is also provided to assist PNG’s aviation and maritime sectors consistently move towards compliance with international safety and security standards. Australian Government transport sector agencies play an important role in providing integrated Australian assistance to PNG under the TSSP framework. The Australia-PNG Memorandum of Understanding on Cooperation in the Transport Sector outlines the key priorities of this engagement.

Related documents*

Name of document Year published Type
Australia-PNG Memorandum of Understanding on Cooperation in the Transport Sector 2010 Memorandum of understanding
Design and Implementation Framework 2013 Design

Related links

PNG-Australia Incentive Fund

Up to $100 million, 2015-2019 (Phase 4)

The Incentive Fund supports high performing organisations to expand their operations in order to improve service delivery capacity and promote economic growth. Church organisations, education and health institutions, and research bodies have been beneficiaries and remain important partners for Incentive Fund projects under Phase 4 of the program. In this phase of the program, proposals will also be accepted from the private sector. This recognises the significant development role that many companies already play in PNG in areas such as health and education, and together will allow the Incentive Fund to leverage partnerships with the private sector to achieve improved development outcomes.

There will be a number of opportunities to apply for grants under the Incentive Fund.

Related documents*

Name of document Year published Type
Incentive Fund Independent Progress Report 2012 Review
Incentive Fund IV Design 2014 Design

Related links

Private Sector and Rural Development

Up to $68 million, 2014-2019

A Private Sector Development Framework identifies a range of investments to help reduce the costs of doing business, reduce risk and improve productivity under four pillars: improvements in the business enabling environment; agriculture (rural development, markets, and trade); innovation and business partnerships; and financial inclusion. The activities under each of these pillars are outlined in the Private Sector Development Fact Sheets. Cutting across all four pillars is a strong focus on women’s economic empowerment and financial inclusion opportunities, particularly in rural areas.

Related documents*

Name of document Year published Type
Business Enabling Environment [PDF] 2015 Fact sheet
Agriculture: Rural Development, Markets and Trade [PDF] 2015 Fact sheet
Innovation and Partnerships [PDF] 2015 Fact sheet
Financial Inclusion [PDF] 2015 Fact sheet

Related links

* The Department of Foreign Affairs and Trade (DFAT) is committed to high standards of transparency and accountability in the management of the Australian aid program through publishing information on our website, including policies, plans, results, evaluations and research. Our practice is to publish documents after the partner government and any other partners directly involved in the delivery of the initiative have been consulted. Not all material published on this site is created by the Australian aid program and therefore not all documents reflect our views. In limited circumstances some information may be withheld for reasons including privacy and commercial sensitivity.



Last Updated: 10 August 2017