ADB and Nauru Sign $5M Grant to Boost Fiscal Sustainability and Gender Equality

ADB Executive Director Rachel Thompson, representing the Government of Nauru, and ADB Director General for the Pacific Leah Gutierrez formalized the agreements at ADB Headquarters in Manila.


Devdiscourse News Desk | Manila | Updated: 06-06-2024 16:14 IST | Created: 06-06-2024 16:14 IST
ADB and Nauru Sign $5M Grant to Boost Fiscal Sustainability and Gender Equality
Representative image Image Credit: ANI

The Asian Development Bank (ADB) and the Government of Nauru have inked a $5 million policy-based grant agreement aimed at implementing a gender-responsive fiscal sustainability approach to address debt reduction, enhance debt management practices, increase revenue generation, bolster state-owned enterprises (SOEs), and support the most vulnerable segments of Nauru's population.

ADB Executive Director Rachel Thompson, representing the Government of Nauru, and ADB Director General for the Pacific Leah Gutierrez formalized the agreements at ADB Headquarters in Manila.

The program, comprising two subprograms, will be funded through two $5 million policy-based grants from the Asian Development Fund (ADF), which extends grants to ADB’s poorest and most vulnerable member countries. ADF receives replenishments every four years from donor countries.

Leah Gutierrez emphasized the significance of the program in fostering sustainable and inclusive growth by addressing debt reduction, enhancing debt management practices, boosting revenue generation, improving SOE operations, and providing balanced support to Nauru’s most vulnerable population, given the country’s limited economic scope and investment opportunities.

The ADB-supported Improving Fiscal Sustainability Program will enable the government to reinforce gender-responsive fiscal sustainability through policy and institutional reforms focused on enhancing fiscal and debt management, strengthening SOE governance, and ensuring responsible fiscal support for vulnerable groups, particularly women.

Subprogram 1 will aid in executing the government’s debt action plan to bring debt levels to sustainable thresholds and modernize debt management mechanisms. Notably, Nauru’s debt has been reclassified as sustainable by the International Monetary Fund. Additionally, Subprogram 1 will support the government's efforts to enhance public financial management systems and streamline customs processing procedures to enhance efficiency and transparency in revenue collection. It will also strengthen the oversight of SOEs and facilitate the adoption of a social protection strategy to ensure vulnerable groups receive necessary support in a fiscally responsible manner. Furthermore, policy reforms addressing climate change challenges and international commitments will be supported. Gender considerations will be integral across all reform areas.

The ADB-supported program builds upon previous engagements in Nauru, aligning with ADB’s Strategy 2030 objectives of enhancing governance and institutional capacity. ADB, a key partner in policy dialogue, collaborates with other development partners, particularly the Governments of Australia and New Zealand, which is providing a parallel grant of $670,000, to advance policy reforms.

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