PAPUA New Guinea's business climate has always been described as challenging. Ask any business leader and you will be sure to get the same response. This is largely due to various challenges, mostly recuring. These issues include the much talked about foreign exchange, taxes, power, water, lack of enabling infrastructure and the list goes on. The 2023 financial year is no exception with one business leader describing it as "Different year, same issues." But businesses year in and out always remain optimistic about the future, always steadfast holding PNG's economy in the balance. Let's take a look back and see how the year unfolded for the business sector. Some issues affecting the business landscape in 2023 Inflation has hit businesses, pushing up the cost of doing business. Coupled with this, the shortage of foreign exchange currency has continued to be a challenge resulting in delays and increased cost of procuring goods. Speaking to this paper earlier this year, the chief executive officer the National Superannuation Fund (Nasfund), one of the country's biggest superannuation funds Mr Rajeev Sharma the FX affects both stocks and capital expenditure. The delay in FX has resulted in lower revenue results and capex which leads to capital projects not being delivered on time. Further to this, working capital requirements have gone up as foreign creditors have stopped providing credit facilities. In recent times, the Kina has also gradually been devalued, receiving mixed feedback from the business community. Some business leaders went against the idea when it was first put forward stating it wasn't the right time given the fact that businesses are still struggling amid inflationary pressure with cost of goods going up. On the flipside, devaluation suits exporters. Banking had also affected both businesses and citizens following the transition of the banking system of the country's biggest bank, BSP Financial Group Ltd. The bank had transitioned from its old core banking system to the new Oracle Flexcube system over Easter. The crossover has seen a technical glitch occur which had a roll-on effect impacting various banking processes. Power issues continued to be an impediment for businesses with high cost of power generation. Big businesses in the country not only had to spend more on electricity but also deal with the intermittent troubled supply. Water had instances where the country has had more than the usual disruptions also impacting businesses and the general public. Foreign Direct Investments (FDI) for 2023 Moving away from the issues, not all is bad for the country with the proposed Foreign Direct Investment (FDI) for construction activities in the country peaked at K1.7 billion at June 2023, according to Investment Promotion Authority (IPA) figures. Mining came in second with K624.16 million with the wholesale and retail industry third with K106.70 million. PNG's investment trend by country for proposed FDI saw interest from Australia the highest with K1.7 billion FDI followed by China with K738.74 million. Speaking during the recent 17th Papua New Guinea Resources and Energy Investment conference in Sydney last week, IPA managing director Clarence Hoot said PNG is open for business. PNG endeavours to make improvements in its investment environment with investors encouraged to conduct business within the confines of the PNG laws and regulations. Joint venture partnerships are encouraged to involve local participation. There is untapped potential for new investments in almost all the sectors and sub-sectors and the IPA stands ready to assist should you consider investing in PNG, according to Mr Hoot. The recently held Papua New Guinea Asia Investment Conference Held in Hong Kong, hosted by the PNG Chamber of Resources and Energy also now paves the way for cross investments from PNG and the Asian markets. Development by sectors Extractive industry The Mining and Petroleum sector has had a big year with major developments in the sector. In the energy space, this year saw the Papua LNG project launching its integrated FEED (Front End Engineering and Design). A final investment decision (FID) is still pending and is expected sometime next year around the first quarter of the fear. Operator TotalEnergies E&P PNG Ltd also awarded the first engineering, procurement, Construction (EPC) contract to Vince Construction Terrassement SpieCapag Niugini Limited (VCTSC) for the upstream early works and infrastructure Package. In the mining sector, the long awaited multi-billion-kina Porgera gold mine reopening happened last Friday with production expected in the first quarter of next year. Meanwhile, the worlds number one gold company Newmont Corporation entered the PNG market with the acquisition of Newcrest taking over its global business and also with it, the Lihir operations. Newmont now will also participate in the joint venture with Harmony gold for the proposed Wafi-Golpu project in Morobe. The Ok Tedi Minin Limited (OTML) has also had its mine life extended from 2033 to 2050. The peak industry body, PNG Chamber of Resources and Energy also hosted three major events being the firs Canconex event in Lae, PNG Asia Investment Conference in Hong Kong and the major Papua New Guinea Resources and Energy Conference just recently in Sydney, Australia. Banking space opens up This year has also seen developments in the banking space with several entities who have applied to license through the Bank of Papua New Guinea (BPNG) getting one step closure to becoming fully fledged commercial banks. Earlier this year, the BPNG granted the Credit Corporation an approval in Principle for a banking license. Tisa also had its provisional banking license issued by the Central bank and will have to meet certain requirements before it is granted a full commercial bank license by the BPNG. It is understood through its subsidiary Tisa Community Finance, Tisa will launch its banking arm proposed under the name Tisa Bank Limited. The Peoples Micro Bank Limited (PMBL) also began its path to going into becoming a commercial bank. This follows the appointed of former BSP Financial Group Ltd CEO Robin Fleming as its chairman who will lead the transition. It is understood PMBL has been in the process of applying for full commercial bank license for a while. Meanwhile, the bank of China after a yar of consultation and going through the process of establishing a bank has finally launched its first international branch in PNG to be based in Port Moresby earlier in June. The establishment of the Bank of China will benefit more than 110,000 Asians including Philippines, Bangladesh, Chinese and other Asian nationals in the country to do their banking services. The bank is looking at going cashless with its services and products including the use of its bank cards, the UnionPay Single currency great wall business credit card, Bank of China Pheonix miles Visa Olympic credit card, Bank of China Ctrip card, bank of China Amway credit card and so on. It is also looking at extending its branches to Kokopo, Hagen and Lae once established in Port Moresby. Outlook The general outlook for the business sector is positive with major projects like Porgera now back online. With Papua, P'Nyang and others coming online, this will set the tone and stimulate businesses with the construction phase of Papua and others set to create jobs and generate business opportunities.