Abstract
VANUATU
Title page
VANUATU
STAFF REPORT FOR THE 2021 ARTICLE IV CONSULTATION—INFORMATIONAL ANNEX
August 16, 2021
Prepared By
The Asia and Pacific Department
(In consultation with other departments)
Contents
FUND RELATIONS
RELATIONS WITH OTHER INTERNATIONAL FINANCIAL INSTITUTIONS
STATISTICAL ISSUES
Fund Relations
(As of June 30, 2021)
Membership Status: joined September 28, 1981; Article VIII
General Resources Account:
| SDR Million | Percent Quota | |
| Quota | 23.80 | 100.00 |
| Fund holdings of currency | 19.61 | 82.38 |
| Reserves tranche position | 4.20 | 17.63 |
| SDR Million | Percent Quota | |
| Quota | 23.80 | 100.00 |
| Fund holdings of currency | 19.61 | 82.38 |
| Reserves tranche position | 4.20 | 17.63 |
SDR Department:
| SDR Million | Percent Allocation | |
| Net cumulative allocations | 16.27 | 100.00 |
| Holdings | 1.93 | 11.89 |
| SDR Million | Percent Allocation | |
| Net cumulative allocations | 16.27 | 100.00 |
| Holdings | 1.93 | 11.89 |
Outstanding Purchases and Loans:
Emergency Assistance may include ENDA, EPCA, and RFI.
| SDR Million | Percent Quota | |
| RCF Loans | 6.8 | 28.57 |
| Emergency Assistance 1/ | 0.0 | 0.0 |
Emergency Assistance may include ENDA, EPCA, and RFI.
| SDR Million | Percent Quota | |
| RCF Loans | 6.8 | 28.57 |
| Emergency Assistance 1/ | 0.0 | 0.0 |
Emergency Assistance may include ENDA, EPCA, and RFI.
Latest Financial Arrangements: None
Projected Payments to the Fund 2/
(SDR million; based on existing use of resources and presenting holdings of SDRs)
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
| Forthcoming | |||||
| 2021 | 2022 | 2023 | 2024 | 2025 | |
| Principal | 0.85 | 1.70 | 1.70 | 1.70 | 0.85 |
| Charges/Interest | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
| Total | 0.85 | 1.71 | 1.71 | 1.71 | 0.86 |
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
| Forthcoming | |||||
| 2021 | 2022 | 2023 | 2024 | 2025 | |
| Principal | 0.85 | 1.70 | 1.70 | 1.70 | 0.85 |
| Charges/Interest | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
| Total | 0.85 | 1.71 | 1.71 | 1.71 | 0.86 |
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
Implementation of HIPC Initiative: Not applicable
Implementation of Multilateral Debt Relief Initiative: Not applicable
Implementation of Catastrophe Containment and Relief: Not applicable
Exchange Arrangements
Since 1988, Vanuatu has officially maintained an adjustable peg exchange rate arrangement. Currently, the exchange rate of the vatu is linked to a transactions-weighted (trade and tourism receipts) basket of currencies. The weights and composition of the basket, which are not publicly disclosed, are adjusted periodically. The Reserve Bank of Vanuatu (RBV) quotes daily buying and selling rates for the vatu against the U.S., Australian, and New Zealand dollars; the euro; the U.K. pound; and the Japanese yen. The rate in terms of the U.S. dollar as of July 21, 2021 wa s VT 109.95 per U.S. dollar. The de facto classification is “other managed,” as the composite weights are not disclosed and cannot be confirmed. Vanuatu has accepted the obligations of Article VIII, Sections 2, 3, and 4, and maintains an exchange system that is free of restrictions on making of payments and transfers for current international trans actions and multiple cur r ency practices .
Article IV Consultation
Vanuatu is on a 12–month consultation cycle. The previous Article IV consultation mission took place during March 26 -April 08, 2019 and the consultation was concluded on a lapse-of-time basis on June 05, 2019 (Country Report No. 19/162).
OFC Assessments
The most recent Offshore Financial Center Module II Assessment, conducted by MFD, was concluded in May 2006.
Safeguards Assessment
The first safeguards assessment of the RBV was completed in October 2016 in connection with emergency financing received in 2015. The assessment found that the RBV has a recognized accounting framework and publishes annual financial statements, albeit with some delay. It also identified several weaknesses in its governance arrangements, autonomy, transparency, and audit mechanisms. Recommendations included: (i) drafting amendments to the Reserve Bank of Vanuatu Act to align it with leading practices for central banks; (ii) establishing an Audit Committee; (iii) outsourcing internal audit services to an independent international audit firm; and (iv) formulating a recapitalization plan. While the RBV received technical assistance on the recapitalization framework and recently appointed a Chief Risk Officer, the bank is yet to publish it’s 2020 financial statements and progress in implementing the safeguards recommendations has been slow.
Technical Assistance
Technical assistance on public financial management, revenue administration, banking supervision, macroeconomic management and policy analysis, and statistics (GDP, external sector statistics and government finance) has been provided mainly through PFTAC.
Resident Representative
The resident representative office for the Pacific Islands, including Vanuatu, was opened in September 2010 in Suva, Fiji. Ms. Leni Hunter is the current Resident Representative.
Relations with Other International Financial Institutions (IFIs)
Relations with other IFIs:
World Bank Group: http://projects.worldbank.org/search?lang=en&searchTerm=&countrycode_exact=VU
Asian Development Bank: https://www.adb.org/countries/vanuatu/main
Pacific Financial Technical Assistance Center: https://www.pftac.org/content/PFTAC/en1/reports11.html#tab_5
Statistical Issues
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has shortcomings but is broadly adequate for surveillance. The frequency and quality of national accounts could be further improved, while the coverage of government finance statistics and external sector statistics could be expanded, and data provision lags could be shortened. | |
| National accounts: While there have been improvements in the methodology and the development of additional data sources, the accuracy of expenditure-based GDP estimates could be further improved. Data are compiled only on an annual basis. Plans to rebase GDP and develop a new quarterly measure to at least 2022 have been delayed. PFTAC is providing technical assistance in national accounts compilation and has refocused on core capacity development to provide a solid basis for reviving development work in FY2022 and FY2023. | |
| Price statistics: A quarterly CPI covering the two urban centers of Port Vila and Luganville is produced. Dissemination is irregular, with the 2 nd quarter of 2020 currently the most recent release. The CPI weights are based on 2010 household surveys. Rebasing the CPI to a more recent base year has been reprioritized due to delays in the 2019 Household Income and Expenditure Survey. | |
| Government finance statistics: The budget classification is broadly consistent with the GFSM 2001. Work is underway to migrate budget classification to the GFSM 2014. Discrepancies across fiscal data compiled and disseminated by the Department of Finance and Treasury (DoFT), the Vanuatu National Statistics Office (VNSO), and the Reserve Bank of Vanuatu (RBV) need to be reconciled; statistical discrepancies are also present in the balance sheet for transactions in assets and liabilities. Expanding coverage to the general government started but with significant time delays and source data gaps. Capacity constraints and the lack of a dedicated GFS compiler have slowed overall progress on GFS data compilation and dissemination. Central government debt and government guarantees are compiled on a quarterly basis but not publicly available. | |
| Monetary statistics: Monetary statistics are compiled broadly in line with the Monetary and Financial Statistics Manual. The RBV reports monthly monetary data, using Standardized Report Forms (SRFs) for the central bank and other depository corporations, which are published in the International Financial Statistics. Vanuatu reports data for some indicators to the Financial Access Survey (FAS) including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs). | |
| Financial sector surveillance: The RBV also reports Financial Soundness Indicators (FSIs) on a quarterly basis, including all 12 core and 7 encouraged indicators for deposit takers. The FSI data along with accompanying meta data are published in the IMF’s FSI data portal. However, data has not been updated since 2018Q1. | |
| External sector statistics: The RBV releases quarterly BOP and IIP data in its Quarterly Economic Review and are in the process of disseminating the data in line with the Balance of Payments and International Investment Position Manual (BPM6) format. The dissemination lag of quarterly external sector data could be further shortened to so support surveillance. The RBV has collected sufficient information to participate in the IMF’s Coordinated Direct Investment Survey (CDIS) and could start compiling external debt statistics. The coverage of external sector statistics could be further improved, for example, by addressing any incomplete coverage of positions of other financial corporations. | |
| II. Data Standards and Quality | |
| Since April 2019, Vanuatu has implemented the recommendations of the IMF’s Enhanced General Data Dissemination System (e-GDDS) by publishing essential data through the National Summary Data Page (NSDP), an important achievement on data transparency. | No data ROSC is available. |
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has shortcomings but is broadly adequate for surveillance. The frequency and quality of national accounts could be further improved, while the coverage of government finance statistics and external sector statistics could be expanded, and data provision lags could be shortened. | |
| National accounts: While there have been improvements in the methodology and the development of additional data sources, the accuracy of expenditure-based GDP estimates could be further improved. Data are compiled only on an annual basis. Plans to rebase GDP and develop a new quarterly measure to at least 2022 have been delayed. PFTAC is providing technical assistance in national accounts compilation and has refocused on core capacity development to provide a solid basis for reviving development work in FY2022 and FY2023. | |
| Price statistics: A quarterly CPI covering the two urban centers of Port Vila and Luganville is produced. Dissemination is irregular, with the 2 nd quarter of 2020 currently the most recent release. The CPI weights are based on 2010 household surveys. Rebasing the CPI to a more recent base year has been reprioritized due to delays in the 2019 Household Income and Expenditure Survey. | |
| Government finance statistics: The budget classification is broadly consistent with the GFSM 2001. Work is underway to migrate budget classification to the GFSM 2014. Discrepancies across fiscal data compiled and disseminated by the Department of Finance and Treasury (DoFT), the Vanuatu National Statistics Office (VNSO), and the Reserve Bank of Vanuatu (RBV) need to be reconciled; statistical discrepancies are also present in the balance sheet for transactions in assets and liabilities. Expanding coverage to the general government started but with significant time delays and source data gaps. Capacity constraints and the lack of a dedicated GFS compiler have slowed overall progress on GFS data compilation and dissemination. Central government debt and government guarantees are compiled on a quarterly basis but not publicly available. | |
| Monetary statistics: Monetary statistics are compiled broadly in line with the Monetary and Financial Statistics Manual. The RBV reports monthly monetary data, using Standardized Report Forms (SRFs) for the central bank and other depository corporations, which are published in the International Financial Statistics. Vanuatu reports data for some indicators to the Financial Access Survey (FAS) including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs). | |
| Financial sector surveillance: The RBV also reports Financial Soundness Indicators (FSIs) on a quarterly basis, including all 12 core and 7 encouraged indicators for deposit takers. The FSI data along with accompanying meta data are published in the IMF’s FSI data portal. However, data has not been updated since 2018Q1. | |
| External sector statistics: The RBV releases quarterly BOP and IIP data in its Quarterly Economic Review and are in the process of disseminating the data in line with the Balance of Payments and International Investment Position Manual (BPM6) format. The dissemination lag of quarterly external sector data could be further shortened to so support surveillance. The RBV has collected sufficient information to participate in the IMF’s Coordinated Direct Investment Survey (CDIS) and could start compiling external debt statistics. The coverage of external sector statistics could be further improved, for example, by addressing any incomplete coverage of positions of other financial corporations. | |
| II. Data Standards and Quality | |
| Since April 2019, Vanuatu has implemented the recommendations of the IMF’s Enhanced General Data Dissemination System (e-GDDS) by publishing essential data through the National Summary Data Page (NSDP), an important achievement on data transparency. | No data ROSC is available. |
Vanuatu: Table of Common Indicators Required for Surveillance
(As of July 2021)
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), and Not Available (N/A).
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign and domestic financing.
The central government is only the budgetary central government. The data not monthly to STA or IFS. The last available information in IFS available is December 2018. On April 30, 2019 the Government started to release the data through its e- GDDS National Summary Data Page
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Vanuatu: Table of Common Indicators Required for Surveillance
(As of July 2021)
| Date of latest Observation | Date Received | Frequency of Data1 | Frequency of Reporting1 | Frequency of Publication1 | |
|---|---|---|---|---|---|
| Exchange Rates | 5/2021 | 6/2021 | M | M | M |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities2 | 3/2021 | 6/2021 | M | M | M |
| Reserve/Base Money | 3/2021 | 6/2021 | M | M | M |
| Broad Money | 3/2021 | 6/2021 | M | M | M |
| Central Bank Balance Sheet | 3/2021 | 6/2021 | M | M | M |
| Consolidated Balance Sheet of the Banking System | 3/2021 | 6/2021 | M | M | M |
| Interest Rates3 | 4/2021 | 7/2021 | M | M | M |
| Consumer Price Index | 6/2020 | 3/2021 | Q | Q | Q |
| Revenue, Expenditure, Balance and Composition of Financing4—General | N/A | N/A | N/A | N/A | N/A |
| Revenue, Expenditure, Balance and Composition of Financing4, 5—Central Government | 05/2021 | 7/2021 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt6 | 2020 | 7/2021 | A | A | A |
| External Current Account Balance | 12/2020 | 7/2021 | Q | Q | Q |
| Exports and Imports of Goods and Services | 12/2020 | 7/2021 | Q | Q | Q |
| GDP/GNP | 2018 | 7/2020 | A | A | A |
| Gross External Debt | 12/2020 | 7/2021 | Q | Q | Q |
| International Investment Position | 12/2020 | 7/2021 | Q | Q | Q |
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), and Not Available (N/A).
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign and domestic financing.
The central government is only the budgetary central government. The data not monthly to STA or IFS. The last available information in IFS available is December 2018. On April 30, 2019 the Government started to release the data through its e- GDDS National Summary Data Page
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Vanuatu: Table of Common Indicators Required for Surveillance
(As of July 2021)
| Date of latest Observation | Date Received | Frequency of Data1 | Frequency of Reporting1 | Frequency of Publication1 | |
|---|---|---|---|---|---|
| Exchange Rates | 5/2021 | 6/2021 | M | M | M |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities2 | 3/2021 | 6/2021 | M | M | M |
| Reserve/Base Money | 3/2021 | 6/2021 | M | M | M |
| Broad Money | 3/2021 | 6/2021 | M | M | M |
| Central Bank Balance Sheet | 3/2021 | 6/2021 | M | M | M |
| Consolidated Balance Sheet of the Banking System | 3/2021 | 6/2021 | M | M | M |
| Interest Rates3 | 4/2021 | 7/2021 | M | M | M |
| Consumer Price Index | 6/2020 | 3/2021 | Q | Q | Q |
| Revenue, Expenditure, Balance and Composition of Financing4—General | N/A | N/A | N/A | N/A | N/A |
| Revenue, Expenditure, Balance and Composition of Financing4, 5—Central Government | 05/2021 | 7/2021 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt6 | 2020 | 7/2021 | A | A | A |
| External Current Account Balance | 12/2020 | 7/2021 | Q | Q | Q |
| Exports and Imports of Goods and Services | 12/2020 | 7/2021 | Q | Q | Q |
| GDP/GNP | 2018 | 7/2020 | A | A | A |
| Gross External Debt | 12/2020 | 7/2021 | Q | Q | Q |
| International Investment Position | 12/2020 | 7/2021 | Q | Q | Q |
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), and Not Available (N/A).
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign and domestic financing.
The central government is only the budgetary central government. The data not monthly to STA or IFS. The last available information in IFS available is December 2018. On April 30, 2019 the Government started to release the data through its e- GDDS National Summary Data Page
Includes external gross financial asset and liability positions vis-à-vis nonresidents.