The PNG National Research Institute (PNG NRI) today released two reports titled (1) Use and impact of ICT on SMEs in PNG: An empirical analysis and implications for policy and (2) Is District Development Authority an effective decentralized government mechanism to improve service delivery?.

The first report co-authored by PNG NRI Economic Policy Program Leader and Senior Research Fellow Dr Francis Odhuno and Dr Dianah Ngui is a Senior Lecturer, Department of Econometrics and Statistics, Kenyatta University, Nairobi, Kenya, discusses why Information and Communication Technology (ICT) is important for SMEs in Papua New Guinea and how different forms of ICT impact SMEs.

Small and Medium Enterprises (SMEs) are an important factor in the PNG economy, especially with respect to production and employment. It is believed that SMEs can increase their performance by utilizing the different forms of ICT.

Using computers, mobile phones, fixed line telephones and internet has the potential to impact SMEs as it allows suppliers and buyers to communicate – to overcome market impediments, find new products and markets, create opportunity for innovation and increase profit.

With the data from a survey of SME owners and managers across urban, rural and remote places in PNG, the researchers found that:

  • If an SME is using computers or mobile phones, it is likely to grow with increase in profit;
  • If SMEs in rural and remote places use fixed landline phones, they are likely to be innovative and introduce new product or service lines; and,
  • Generally, using internet or having a website may not result in increase in SME’s sales.

They recommend that it is critical to set up advanced ICT infrastructure that expands further than cities and towns; and, introduce training for people using these ICT resources.

The second paper by Economic Policy Research Program Project Officer Chris Banga builds on the initial study to understand the implementation of the District Development Authority (DDA) in light of the characteristics of successful decentralization policy.

In February 2014, the PNG Parliament amended the Organic Law on Provincial and Local Level Government to replace the Joint District Planning and Budget Priorities Committees (JDP&BPC) with District Development Authorities (DDAs) under the District Development Authority Act 2014 as the institution through which development funds are channeled to the districts. So, what is the difference?

To understand how the devolution of revenue and expenditure is implemented at the district level, research was conducted in August 2016, through consultations with national government departments, in Abau and Rigo districts in Central Province, in Gazelle and Kokopo districts in East New Britain province.

It was established that districts have rolled out the DDA in different ways. For example, East New Britain Province has the bulk of its officers based at LLGs while Central Province has staff more concentrated at the district level. The differences in approach may be justified, given that not all districts are the same with respect to human and institutional capacity, population, landmass and topography. But the roll-out of the Kokopo City Authority six months after the DDA may also justify the difference but leaves a lot to be desired.

Moreover, it was generally perceived that the power to make decisions in the districts remained more or less the same as before, mainly because the composition and influence of the DDA Boards are not different from that of their predecessor outfits – the JDP&BPC.

While the level of funding is not so much of a concern, the timing and management of the funds is likely to be derailing service delivery. This problem with funding is compounded with the slump in the economy since 2015, making service delivery quite difficult. Moist districts have not been fully funded in the past. In some cases, funding has been delayed when needed most and disbursed in the periods close to the end of the financial year.

The study concludes that the creation of DDAs has not been sufficient for improving service delivery at the districts and LLGs. Assigning the right functions and responsibilities and proper training of government officers are equally important for improving service delivery in PNG.

The reports can be accessed on the PNG NRI website: https://pngnri.org/ and follow the discussion on these issues on our social media pages:

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