Nauru

Key trends and development challenges

Nauru is a small island developing state located in the Pacific sub-region of Micronesia. With a GDP of $151 million, Nauru is the third-smallest economy in the Pacific, accounting for less than 0.3% of regional GDP. Nauru has a population of 13,000 (2022), resulting in a GDP per capita of $11,900, ranking fourth in the Pacific.

Nauru has the ninth-highest Official Development Assistance (ODA) to Gross National Income (GNI) ratio in the Pacific Islands region, with aid accounting for 14% of national income. In a global context, Nauru is among the most aid-reliant countries in the world, ranking 16th among 127 developing countries for its ODA/GNI ratio. The Nauruan government’s development agenda is focused on debt reduction and supporting the transport sector. At 0.696, Nauru’s Human Development Index score ranks 122nd out of 193 ranked countries.

Between 2008 and 2022, annual Official Development Finance (ODF) disbursements to Nauru — including grants, loans, and other forms of assistance — averaged $40 million. Less than 3% of the development finance received by Nauru between 2008 and 2022 came in the form of loans. Almost all loan financing received by Nauru came in 2020 in the form of a support loan from Taiwan for a new aircraft for the country’s national airline. Despite the addition of this debt, the International Monetary Fund continues to rank the country’s risk of debt distress as low.

Development partners and sector trends

Close to nine-tenths of all ODF support to Nauru comes from five development partners, led by Australia (66%), the Asian Development Bank (7%), Japan (6%), New Zealand (6%), and the Green Climate Fund (5%).

ODF in Nauru was largely distinct from regional trends in terms of sector distribution. The country sees zero spending on the communications sector but a high allocation of financing towards energy projects, when compared with the rest of the region. With the exception of the transport sector loan provided by Taiwan, spending on human development has largely outpaced infrastructure spending.

Since 2008, Nauru has received $64 million in development financing with a “principal” focus on either climate adaptation or mitigation. Over this same period, the country has seen $36 million in development financing with a “significant” focus on climate outcomes. Since the mid-2010s, Nauru has seen a gradual rise in climate-targeting projects. As a share of total ODF received by Nauru, “principal” climate projects make up 12% of total spending, above the regional average of 9%. Conversely, spending on “significant” climate projects in Nauru makes up 8% of incoming funds, below the regional average of 13%.

Between 2008 and 2022, Nauru received $3 million in development financing with a “principal” focus on gender equality, and $155 million in development financing with a “significant” focus on gender equality. “Principal” gender equality financing constituted 0.6% of ODF received by the country, below the regional average of 2%. Conversely, “significant” marked gender financing made up 28% of incoming ODF, above the regional average of 21%. The largest project directly targeting gender equality in Nauru was the multi-year Pacific Women Shaping Pacific Development program, funded by Australia.