Financial Crime World

Nauru: A Thriving Economy Despite Challenges

Nauru, a small island nation in the Pacific, has continued to thrive despite facing numerous challenges. The country’s economy is driven by its Regional Processing Centre (RPC), which has been a significant source of income for Nauru.

Income Generation

  • The RPC remains the main source of income for the country, followed closely by fisheries under the Parties to Nauru Agreement.
  • Personal emoluments and business tax have also contributed significantly to the economy.
  • According to recent reports, Nauru still uses the Australian dollar as its nominated currency.

Challenges Ahead

  • Experts have cautioned that assessments of Nauru’s GDP based on income from the RPC may not accurately reflect the real income. This is because once the RPC closes, the income and cash flow in the economy are likely to be substantially reduced.

Government Expenditure

The Government Revenue in the Treasury Fund is governed by Article 58 of Nauru’s Constitution. The country complies with these requirements, ensuring that any monies withdrawn from the Treasury Fund are under the Appropriation Act.

  • Nauru has also established a DFA 2011, which governs all grant, donations, and other funds received by the government.
  • As part of its budget presentation, the Minister for Finance is required to table a 6-monthly report to Parliament under Section 8 of the DFA 2011.

Nauru Airlines and Flights

Nauru Airlines has a fleet of six aircraft, including three passenger planes and three dedicated freighter planes. The airline continues to operate flights to several destinations, including:

  • Nauru

  • Fiji International Airport

  • Brisbane

  • Tarawa

  • Kiritimati Island

  • Pohnpei

  • Majuro

  • In addition to its regular flights, Nauru Airlines also undertakes charter services on request from various countries.

  • The freighter services of Nauru Airlines are operating domestically in Australia on a charter basis by other airlines.

Shipping – Nauru’s Port and Ship

Nauru has made significant progress in its shipping sector, with the construction of a new port capable of loading and offloading cargoes like any other port. The port is funded by an Asian Development Bank grant and is currently under construction.

  • The NSL ‘Micronesian Pride’ and other smaller vessels have been able to load and offload goods or cargo from the port since June 2022.
  • In September 2023, a vessel carrying petroleum products was able to berth for the first time at the port, delivering fuel through pipes to bunkers in Buada District.

Future Prospects

  • The handling charges are expected to be reduced due to quick return times for vessels, and the benefits must be passed onto the people of Nauru.
  • The whole port, including terminal buildings, is expected to be completed by next year, which will pave the way for more ships to berth at the port, resulting in potential activities such as cruise ships, refueling vessels, and cargo vessels.

Overall, Nauru’s economy has shown resilience despite challenges, with its RPC, fisheries, and shipping sectors driving growth. The country’s progress in developing its port infrastructure is a significant milestone that will have far-reaching benefits for its people.