Tonga’s trading climate ‘much healthier now’

Press, 24 April 1984, Page 5

Tonga’s trading climate ‘much healthier now’

Special correspondent Tonga’s foreign reserves are now double what they were three years ago, according to the overseas manager of the Bank of Tonga, Mr Antony Killingback. Responding to claims from New Zealand exporters that there were problems with bad debts in the South Pacific islands, and difficulties with banking procedures and legislation regarding overseas trade, Mr Killingback said that New Zealand exporters should deal on a clearly defined basis and obtain advance credit reports on buyers from bankers. While full banking services were available from Tonga, most New Zealand export transactions to Tonga were conducted under a bill of collection basis which depended on instructions from the supplier, who in turn provided credit to the Tongan buyers.

He said the competition to sell to Tongan buyers at the best credit terms to the buyers created the risk and that was where New Zealand exporters had to maintain a delicate balance.

“The trading climate is healthier now than immediately after Cyclone Isaac. People forget that the kingdom suffered brutally and as recovery started with aid and the belt tightened, there came a second hurricane and then a drought,” said Mr Killingback. A Nukualofa accountant, insurance agent and trader, Mr Kelepi Tupou, said the bad debt was caused by overstocking 12 to 18 months ago, which was now coming to a head, and did not reflect what was happening at present. “Suppliers should realise there are only 100,000 mouths to feed here, and it is pointless sending enough mutton flaps to feed 200,000,” he said.

The Tongan Justice De-

partment has suggested that New Zealand businessmen should register invoices with Tongan courts when the value of their transactions exceeded $5OO.

The Tongan Justice Department has suggested that New Zealand businessmen should register invoices with Tongan courts when the value of their transactions exceeded $5OO. It was common practice for Tongan businessmen to do this, because under Tongan law no individual could be sued for more than $5OO.

By registering invoices the Tongan buyer would become liable for the whole amount of the debt. An $8 million extension to Queen Salote Wharf is expected to be completed in June next year and is designed to cope with increased trade with New Zealand. ..

Last year 35 per cent of Tongan imports came from New Zealand and were worth about $14.6 million.