August 19th 2021
Prime Minister Hon. James Marape says a sovereign wealth fund (SWF)will be set up as the Government, for the first time ever, has a clear policy on payment of dividends from resource projects.
He announced this major breakthrough today when receiving a K100 million dividend payment from Kumul Petrolum Holdings Ltd (KPHL).
PM Marape, when receiving the money from KPHL Board Chairman Prof Benedict Yaru and Managing-Director Wapu Sonk, said he expected the company to pay another K200 million to meet the full dividend of K300 million as budgeted in the 2021 National Budget.
The SWF has been talked about for many years, however, has never been established despite billions of kina the country has earned from its natural resources like mining, oil and gas.
“Since our Government took office, for the first time, we have a clear dividend policy,” PM Marape said at the Parliament State Function Room.
“This has not been in place for many years.”
PM Marape said KPHL, like many State-Owned Enterprises (SOEs), was now subject to an annual work plan which came under directions from its Board and Government.
He said under the dividend payment policy for SOEs now in place:
– 60 per cent of all revenue was to be channeled back to the State;
– 10 per cent to community-based projects;
– 7 per cent to an SWF;
– 13 per cent to the SOE concerned; and
– 10 per cent for administration costs.
“In as far as our country is concerned, the law has created that facility (SWF), however, no government in the past has seriously thought of putting money into a sovereign wealth fund,” PM Marape said.
“I can understand why, when we don’t have much money, but our Government has now decided to differ, with 7 per cent of all revenue from resource projects to be put into a sovereign wealth fund.
“We intend to start to utilise this facility (SWF) this year and going forward.
“This will instill a savings culture in our Government for tomorrow.”
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