Prime Minister James Marape provided a detailed response in Parliament to a supplementary question from Chuave MP James Nomane regarding the Government’s borrowing and fiscal management. The question centered on how government departments were funded in 2024 despite revenue shortfalls, why the Government borrowed K3.9 billion last year, and whether commitments made to districts—including North Fly. In his response, Prime Minister Marape stressed that all borrowing was carefully planned and managed within the fiscal framework, ensuring responsible debt management while maintaining essential government services. “The K3.9 billion borrowed last year was not reckless. It was part of our structured financing plan, designed to sustain government programmes while we continue efforts to strengthen our economy. We are not borrowing aimlessly—we are borrowing with a purpose: to refinance expensive past debt, invest in key sectors, and manage fiscal responsibilities efficiently,” he said. Mr. Marape explained that while the nominal debt figure may seem high, its true significance must be viewed in relation to the overall economy. You may hear big numbers—K3 billion, K2 billion, K4 billion—but what matters is the percentage of debt relative to the economy. Globally, many economies have debt-to-GDP ratios above 80%. In Papua New Guinea, for the first time in six years, our debt-to-GDP ratio has fallen below 50%. This is an indicator of our prudent financial management and efforts to ensure the country remains fiscally stable,” PM Marape said. He further elaborated on why borrowing was necessary, pointing out that when his government took office in 2019, the economy was already in a weak position. “When we assumed office in 2019, the national finances were not in good shape. We inherited significant debt obligations, and part of our economic recovery plan involved refinancing expensive loans with lower-interest financing options,” he said. He also cited the global economic impact of COVID-19 as a factor that forced governments worldwide—including Papua New Guinea—to borrow in order to keep essential services running. “The COVID-19 pandemic was a once-in-a-hundred-years event, and countries worldwide had to borrow to stay afloat. We had to ensure that our people were protected, that our health sector was supported, and that our economy did not collapse. Borrowing during this period was not a choice—it was a necessity,” he said. He also pointed out that natural disasters in 2024, including major floods and landslides, further affected government spending and required urgent financial interventions. “We had almost K1 billion in unexpected expenditures due to natural disasters last year. These are real situations where government must step in. That is why we ensure that our financial planning is flexible enough to respond to emergencies while maintaining fiscal discipline,” Mr. Marape said.