Overview

Papua New Guinea (PNG) is gradually developing its digital economy, mainly due to improved access to new technologies, internet connectivity, and communication initiatives led by the PNG government through the Department of Information and Communications Technology (DICT). The use of new technology, internet access, social media, and other digital platforms has resulted in increased online social and commercial activities. According to a baseline assessment conducted by The Center for International Private Enterprise, approximately 36% of PNG’s population (3.74 million people) have cellular mobile connections, while internet penetration is at roughly 32% of the population, with approximately 3.3 million users.

The PNG government is strategically positioning itself to implement digital reforms and interventions through the Digital Government Plan (DGP). This plan outlines key programs and projects that the government aims to implement by 2027. The projects included in the DGP will support various government priorities, such as increasing revenue, enhancing the efficiency of public services through digital technology platforms, and tracking development indicators using appropriate tools. The DGP aligns with the government’s ambitious goal of connecting 70% of its population to the internet by 2030, as stated in PNG’s Medium-Term Development Plan.

Projected Digital Economy Growth
Papua New Guinea (PNG) is the largest Pacific Island country in terms of both landmass and population, with just over 10 million people. As the population continues to grow, the e-commerce sector in PNG is expected to expand rapidly. According to a report by The Center for International Private Enterprise (CIPE), food and personal care account for 46% of PNG’s e-commerce revenue, followed by electronics and media (19%), fashion (14%), furniture and appliances (12%), and toys, hobbies, and DIY (9%). In the retail market, the online share is 2% and is expected to increase to 3% by 2027.

In USAID’s Digital Ecosystems Country Assessment, PNG is classified as a tier four e-commerce country compared to other Pacific Island nations. Several online marketplaces in PNG offer cashless payment solutions, which facilitate fast and efficient transactions, fostering business growth and development. Key players in the telecommunications and internet service provider market in PNG include the state-owned entity Telikom PNG, the Telstra-owned Digicel, and the ATH-owned Vodafone PNG. Among these, Digicel stands out as the more prominent telecom company, with greater geographical coverage and a larger customer base. Other ISPs, such as Datec and Daltron, provide IT services to both businesses and individual customers. Furthermore, PNG is actively investing in promoting financial inclusion and digital transformation with support from foreign governments and multilateral partners.
 

Market Challenges

Data privacy
Papua New Guinea (PNG) currently lacks a law for protecting personal data, creating risks for individuals, businesses, and organizations due to the unregulated use and safeguarding of data. The existing regulatory framework for data, including Acts related to protection, security, and governance, is incomplete. Although the Digital Government Act 2022 has specific clauses addressing data protection, a comprehensive Data Protection Act is necessary to ensure effective and thorough regulation of data in the country.

AI regulation
PNG does not have any specific AI regulation or legislation.

Cross-border data flows
At present, Papua New Guinea does not have specific regulations in place regarding the transfer of data across borders. However, the Department of Information and Communication Technology (DICT) is currently developing a National Data Protection and Governance Policy. This policy will establish the guidelines for transferring personal data to other countries or entities. It is anticipated that countries or entities wishing to transfer data will be required to comply with the safeguards outlined in the policy to ensure the protection of individuals’ privacy rights.

Cybersecurity
In 2021, there were reports of a cyberattack on Papua New Guinea’s Department of Finance’s Integrated Financial Management System. The attack briefly disrupted government payments and operations. The system, which manages access to foreign aid money, was disabled by cyber hackers who demanded Bitcoin as ransom payment. As a response, PNG has created a National Cyber Security Strategy with the aim to position PNG to proactively address cyber security risks and ensure cybersecurity resilience. The key objectives of the Cyber Security Strategy are to protect critical infrastructure, promote cyber security awareness, enhance incident report capabilities, ensure regulatory compliance, and foster information sharing and partnerships. Furthermore, PNG has set up a National Computer Emergency Response Team to coordinate the country’s response to cybersecurity incidents.

Standards development
In 2023, the Papua New Guinea Government, through the DICT, initiated consultations to establish eight new draft digital government standards. These standards include Digital ID standards, social media standards, Government Cloud standards, Data Centre standards, Data Standards, Internet service provider services standards (ISP), E-Payment standards, and Digital Transformation Officer (DTO) Standards and guidelines. The purpose of implementing these standards is to ensure that citizens, businesses, and the government have access to digital services that meet their needs and comply with international and PNG standards.

Public sector procurement
The National Procurement Act 2018, which was passed in Parliament, resulted in the establishment of the National Procurement Commission (NPC), a statutory body responsible for Papua New Guinea’s public sector procurement. Currently, there are discussions about PNG transitioning from a manual-based procurement system to an e-government procurement system.

Digital Trade Barriers 
The National Information and Communications Technology Authority (NICTA) is the ICT regulator in Papua New Guinea. All foreign businesses, including US companies, operating in the telecommunications sector in PNG are required to obtain an operating permit from NICTA. An example of market entry barriers can be seen in the recent case with Starlink. Starlink’s operating permit has been subject to lengthy regulatory processes with NICTA, despite receiving in-principal approval back in January 2024.  The license is currently under judicial review and is likely to take time to resolve.

The process of entering the market and conducting business in PNG can be complex. Additionally, businesses and foreign entities need to register with the PNG Investment Promotion Authority (IPA). The registration process has been improved with the IPA moving it online and shortening the time frame for processing applications electronically, although delays may still occur. In support of e-government goals, IPA is moving to an online process that should result in faster application processing times.

A major issue in PNG is the lack of data management and access. A report by The Center for International Private Enterprise highlights the absence of a central government data repository system that can store, process, and make accessible data through a central e-government portal. The PNG Digital ICT Cluster emphasizes the need for specific legislation to govern online e-transactions entering and leaving the country’s Payment Gateway domain to monitor and deter potential cyber security risks, including fraud. The DICT has proposed an Electronic Data Act to establish a secure e-commerce environment for online businesses. Due to the lack of regulatory legislation and cyber-security infrastructure, there is currently a general lack of protection for e-transactions in the country.

Despite the expected growth of PNG’s digital economy, there are still issues regarding the high cost of internet services, slow internet speeds and poor connectivity, coupled with a lack of infrastructure and consistent power supply to enable connection.

Digital Trade Opportunities

Cybersecurity vulnerabilities pose a significant threat to Papua New Guinea, especially following recent cyber-attacks targeting key government institutions, local businesses, and organizations. Efforts are underway to strengthen network and security systems, with a focus on critical sectors such as finance, border protection and customs, ports, and aviation. The formulation of the National Cybersecurity Strategy will necessitate the involvement of cybersecurity experts to ensure adherence to established standards. Furthermore, development partners are providing support for capacity building and training programs aimed at raising awareness of cybersecurity and enhancing response capabilities.

In the 2018 APEC Summit, the U.S., Australia, New Zealand, and Japan pledged to assist PNG in achieving its goal of connecting 70% of the country to electricity by 2030. The PNG Electrification Partnership (PEP) offers opportunities for U.S. businesses to compete for digital and communications infrastructure projects.

Events
Papua New Guinea Business Opportunities Seminar
Papua New Guinea Business Opportunities Seminar 2024

2024 Papua New Guinea Investment Week
https://pngcmp.eventsair.com/pngcore-investment-conference-2024/2024delreg/Site/Register

The PNG ICT Cluster organizes a wide range of events, including conferences, workshops, webinars, and networking sessions. These events provide opportunities to connect with industry professionals, gain insights from experts, and stay updated on the latest trends and technologies.
info@ictcluster.org.pg

For more information on PNG’s Digital Economy contact Commercial Specialist, Melisha Imar melisha.imar@trade.gov