Doing business not easy in PNG
May 3, 2011 Leave a comment
William Ire is a betelnut vendor who sells his wares each day, from betelnut, cigarettes, soft drinks and biscuits near his home at 5 Mile in Port Moresby, and has been doing this for the past 8 years.
And now William says he wants to venture into selling second hand clothes, which has become a lucrative income earner for many locals wishing to start small businesses in Port Moresby and other parts of the country, because there is a big demand for fashionable, yet affordable clothing in PNG.
William says he has saved up enough capital, over K8,000 to venture into this business, and getting a loan won’t be a problem, because he has saved with Micro finance, who provide loans for starting businesses, and who by chance, charge a very low interest rate.
However, he says, the business may take along time to open its doors, because there are a lot of processes involved in setting up a business in PNG, and true to his word, this is the scenario being faced in the country at the moment
Statistics on Doing Business in PNG, which is a report provided by the International Finance Corporation and World Bank, which measures Business Regulations of different economies, ranks PNG 103 out of 183 countries on the ease of starting a business.
This is mainly due to the long process in filling out paper work and seeking approval from various Government departments like the Lands and Physical Planning, Environment and Conservation and even the health department for licenses to be signed, and also registering the company and getting the tax authorities approval, will cost more money, meaning William maybe paying almost half of his savings to get all these licenses approved and register his company has well.
Williams plan of opening a second hand shop maybe a problem, as well, because he has to fill out more forms with customs to import clothing from Australia, which could take another month or two and cost more money.
So William like many Papua New Guineans and potential business investors from overseas at the end of the day, have to get through so much processes and procedures in order to open a business , which puts locals at a disadvantage, because most may not have enough capital to pay for all the costs , on top of that they will have to wait along time to eventually get their businesses off the ground.