PNG businesses struggle due to shortage of foreign currency

Navin Raju

The shortage of foreign currency currently faced in the country is causing many Papua New Guinea business houses to see a decline in their sales and profit.

City Pharmacy Ltd Group, one of the biggest retail businesses in the country, has seen a decrease in their cash liquidity due to shortage of foreign currency faced in the country.

Group chief executive officer Navin Raju told Post Courier that the issue with foreign currency has really affected their import of goods.

“In the last three months of 2023, we have seen a decrease with our cash liquidity and we are struggling to pay for our stocks,” Raju said.

He said when there is no FX in the market they use their suppliers to give them a credit and that has actually increased the terms, which is the cost of capital that gets charged and that makes products on the shelves in shops more expensive.

“CPL Group is not the only business that is struggling, but every other business and the country as a whole is also struggling.

We are all actually paying a lot more because we are unable to pay our suppliers on time,”  Raju said.

“We then have to factor that cost into our products when we sell it at our selling price so it’s not only the suppliers who are suffering, but the customers are also suffering because they are paying a higher price because of the FX liquidity.

“We have to charge interest and put it into pricing because we cannot pay our suppliers on time.”

The Post Courier reached out to Garamut Enterprise (Boroko Food World and Water Front) and they responded saying: “We are a retail business that depend on import products and with the FX shortage we are also facing issue of bringing in our supply.”

Raju said for 2023, the CPL Group is looking forward to the remaining of the year because they have seen an improvement in the market and more customers are spending so there is more liquidity in the market.

He said there is no more disruptions to business like they faced last year due to election-related issues and all other violence issues, especially in the highlands region.