Abstract
REPUBLIC OF NAURU
Title Page
REPUBLIC OF NAURU
STAFF REPORT FOR THE 2021 ARTICLE IV CONSULTATION—INFORMATIONAL ANNEX
January 14, 2022
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 January 11, 2022)
Membership Status: Joined April 12, 2016; Article VIII
General Resources Account:
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 2.80 | 100.00 |
| IMF’s Holdings of Currency | 2.12 | 75.71 |
| Reserves Tranche position | 0.68 | 24.32 |
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 2.80 | 100.00 |
| IMF’s Holdings of Currency | 2.12 | 75.71 |
| Reserves Tranche position | 0.68 | 24.32 |
SDR Department:
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocations | 3.55 | 100.00 |
| Holdings | 2.86 | 80.79 |
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocations | 3.55 | 100.00 |
| Holdings | 2.86 | 80.79 |
Outstanding Purchases and Loans: None
Financial Arrangements: None
Projected Payments to Fund
(SDR Thousands; based on existing use of resources and present holdings of SDR):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | 2024 | 2025 | |
| Principal | |||||
| Charges/Interest | 0.372 | 0.371 | 0.371 | 0.371 | |
| Total | 0.372 | 0.371 | 0.371 | 0.371 | |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | 2024 | 2025 | |
| Principal | |||||
| Charges/Interest | 0.372 | 0.371 | 0.371 | 0.371 | |
| Total | 0.372 | 0.371 | 0.371 | 0.371 | |
Exchange Arrangements
The de jure and de facto exchange rate arrangements are classified as no separate legal tender. Nauru’s legal tender is the Australian dollar. There is no central monetary institution. Nauru has accepted the obligations of Article VIII, Sections 2, 3, and 4, and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions and multiple currency practices.
Technical Assistance
Nauru has been benefitting from the Pacific Financial Technical Assistance Centre’s (PFTAC) and from the Capacity Development Office in Thailand (CDOT) technical assistance (TA) in recent years. In FY2020, technical assistance provided by PFTAC included National Chart of Accounts mapping to GFS and compilation of institutional unit table for public sector; support for IPSAS cash reporting; and a review of tax administration and core tax functions. In FY2021, technical assistance provided by PFTAC has offered additional support for national chart of accounts mapping to GFS and compilation of institutional unit table for public sector; compilation of draft 2018–2019 GDP estimates and collection of improved industry data; support on macro forecasting to strengthen medium term macroeconomic framework; and a tax policy review to identify potential revenue reform options. External sector statistics TA delivered via CDOT is setting up compilation program for the balance of payments and IIP statistics including addressing institutional issues. Annex VIII lists all IMF technical assistance and CD provided to Nauru since July 2018.
Resident Representative
The Regional Resident Representative Office for Pacific Islands is based in Suva, Fiji and was opened on September 13, 2010. The office covers Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. Ms. Leni Hunter is the current resident representative.
Relations with other International Financial Institutions
Information on the activities of other institutions in Nauru can be found at:
World Bank Group: https://projects.worldbank.org/en/projects-operations/projects-list?searchTerm=nauru.
Asian Development Bank: https://www.adb.org/countries/nauru/main.
Statistical Issues
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has serious shortcomings that significantly hamper surveillance. Nauru became an IMF member in April 2016, and during the membership preparation in 2014–15, the authorities compiled data with the support of PFTAC technical assistance (TA). Most macroeconomic data remain unpublished and compiled during TA mission by PFTAC and CDOT. Despite additional recruitment, no staff is assigned for compilation of external sector statistics, the capacity of the National Bureau of Statistics (NBS) is limited, and Nauru has continued to rely on TA, capacity supplementation, and donor support in compiling data. | |
| National Accounts (NA): Annual GDP estimates have improved with the support of PFTAC TA. In July 2020, TA was provided to update the real sector statistics. The 2021 TA missions assisted the NBS with the rebasing of the national accounts and the implementation of new data sources (for construction, house rental data and financial services). The NBS should increase the number of suitably-skilled technical staff for compiling NA as currently only 1 staff is working part-time on NA. | |
| Price Statistics: The NBS compiles the quarterly CPI with the reference year 2015. However, the latest PFTAC TA in 2019 found that the CPI data has some shortcomings related to the prices of imported motor vehicles. There are no producer, wholesale, or trade price indices. | |
| Government Finance Statistics (GFS): The MoF with the assistance of contractual expatriates currently aim to compile and disseminate GFS. Nauru reported budgetary central government GFS for the first time in 2018 with significant assistance of PFTAC. Authorities have published central government GFS on a quarterly basis since 2018 and on an annual basis since 2019. The MoF relies on TA from PFTAC to ensure data are compiled and disseminated. The last TA GFS mission was in December 2020. | |
| Monetary and Financial Statistics: There are no monetary and financial statistics available since the financial sector is still in early stage of development. Nauru uses the Australian dollar as legal tender and does not have a central bank. There was no financial institution in Nauru over the past decade until Bendigo Bank agency opened in Nauru in June 2015. The agency provides financial services (mainly deposits, but no loans and no foreign exchange transactions) on behalf of Bendigo and Adelaide Bank Limited of Australia. | |
| External Sector Statistics (ESS): Absence of the ESS data hampers surveillance. There are no staff in the NBS assigned to compile ESS, therefore data are compiled during CDOT TA missions, with limited prospects of developing a self-sustained compilation program over the medium-term due to capacity constraints and unresolved institutional issues. In the absence of domestic data sources for important ESS components (including cross-border trade), there is a need to rely on partners’ data, which apart from well-known limitations of relevant databases, have additional drawbacks including due to confidentiality concerns due to the size of Nauru’s economy. A November 2021 ESS TA mission set up and documented a detailed ESS compilation program and outlined action plan to go forward. | |
| II. Data Standards and Quality | |
| At present, Nauru does not participate in any of the IMF’s Data Standards Initiatives. | No data ROSC are available. |
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has serious shortcomings that significantly hamper surveillance. Nauru became an IMF member in April 2016, and during the membership preparation in 2014–15, the authorities compiled data with the support of PFTAC technical assistance (TA). Most macroeconomic data remain unpublished and compiled during TA mission by PFTAC and CDOT. Despite additional recruitment, no staff is assigned for compilation of external sector statistics, the capacity of the National Bureau of Statistics (NBS) is limited, and Nauru has continued to rely on TA, capacity supplementation, and donor support in compiling data. | |
| National Accounts (NA): Annual GDP estimates have improved with the support of PFTAC TA. In July 2020, TA was provided to update the real sector statistics. The 2021 TA missions assisted the NBS with the rebasing of the national accounts and the implementation of new data sources (for construction, house rental data and financial services). The NBS should increase the number of suitably-skilled technical staff for compiling NA as currently only 1 staff is working part-time on NA. | |
| Price Statistics: The NBS compiles the quarterly CPI with the reference year 2015. However, the latest PFTAC TA in 2019 found that the CPI data has some shortcomings related to the prices of imported motor vehicles. There are no producer, wholesale, or trade price indices. | |
| Government Finance Statistics (GFS): The MoF with the assistance of contractual expatriates currently aim to compile and disseminate GFS. Nauru reported budgetary central government GFS for the first time in 2018 with significant assistance of PFTAC. Authorities have published central government GFS on a quarterly basis since 2018 and on an annual basis since 2019. The MoF relies on TA from PFTAC to ensure data are compiled and disseminated. The last TA GFS mission was in December 2020. | |
| Monetary and Financial Statistics: There are no monetary and financial statistics available since the financial sector is still in early stage of development. Nauru uses the Australian dollar as legal tender and does not have a central bank. There was no financial institution in Nauru over the past decade until Bendigo Bank agency opened in Nauru in June 2015. The agency provides financial services (mainly deposits, but no loans and no foreign exchange transactions) on behalf of Bendigo and Adelaide Bank Limited of Australia. | |
| External Sector Statistics (ESS): Absence of the ESS data hampers surveillance. There are no staff in the NBS assigned to compile ESS, therefore data are compiled during CDOT TA missions, with limited prospects of developing a self-sustained compilation program over the medium-term due to capacity constraints and unresolved institutional issues. In the absence of domestic data sources for important ESS components (including cross-border trade), there is a need to rely on partners’ data, which apart from well-known limitations of relevant databases, have additional drawbacks including due to confidentiality concerns due to the size of Nauru’s economy. A November 2021 ESS TA mission set up and documented a detailed ESS compilation program and outlined action plan to go forward. | |
| II. Data Standards and Quality | |
| At present, Nauru does not participate in any of the IMF’s Data Standards Initiatives. | No data ROSC are available. |
Nauru: Table of Common Indicators Required for Surveillance (As of December 2021)
Nauru uses the Australian dollar as its legal tender.
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Compiled by experts during TA missions.
Nauru: Table of Common Indicators Required for Surveillance (As of December 2021)
| Date of Latest Observation | Date Received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | |
|---|---|---|---|---|---|
| Exchange rates1 | 12/04/2019 | 12/04/2019 | D | NA | NA |
| International reserve assets and reserve liabilities of the monetary authorities2 | NA | NA | NA | Q | NA |
| Reserve/base money3 | NA | NA | NA | NA | NA |
| Broad money3 | NA | NA | NA | NA | NA |
| Central bank balance sheet3 | NA | NA | NA | NA | NA |
| Consolidated balance sheet of the banking system | NA | NA | NA | NA | NA |
| Interest rates | NA | NA | NA | NA | NA |
| Consumer price index | 12/2020 | 06/2021 | Q | Q | Q |
| Revenue, expenditure, balance and composition of financing4––general government5 | FY2021 | NA | NA | NA | NA |
| Revenue, expenditure, balance and composition of financing4––central government | FY2021 | 06/2021 | M | Q | NA |
| Stocks of central government and central government-guaranteed debt5 | FY2021 | 06/2021 | A | A | NA |
| External current account balance | FY2021* | 11/2021 | A | A | A |
| Exports and imports of goods and services | FY2021* | 11/2021 | A | A | A |
| GDP/GNP | FY2021* | 08/2021 | A | A | NA |
| Gross external debt | FY2021 | 10/2021 | A | A | NA |
| International investment position6 | FY2021* | 11/2021 | A | A | A |
Nauru uses the Australian dollar as its legal tender.
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Compiled by experts during TA missions.
Nauru: Table of Common Indicators Required for Surveillance (As of December 2021)
| Date of Latest Observation | Date Received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | |
|---|---|---|---|---|---|
| Exchange rates1 | 12/04/2019 | 12/04/2019 | D | NA | NA |
| International reserve assets and reserve liabilities of the monetary authorities2 | NA | NA | NA | Q | NA |
| Reserve/base money3 | NA | NA | NA | NA | NA |
| Broad money3 | NA | NA | NA | NA | NA |
| Central bank balance sheet3 | NA | NA | NA | NA | NA |
| Consolidated balance sheet of the banking system | NA | NA | NA | NA | NA |
| Interest rates | NA | NA | NA | NA | NA |
| Consumer price index | 12/2020 | 06/2021 | Q | Q | Q |
| Revenue, expenditure, balance and composition of financing4––general government5 | FY2021 | NA | NA | NA | NA |
| Revenue, expenditure, balance and composition of financing4––central government | FY2021 | 06/2021 | M | Q | NA |
| Stocks of central government and central government-guaranteed debt5 | FY2021 | 06/2021 | A | A | NA |
| External current account balance | FY2021* | 11/2021 | A | A | A |
| Exports and imports of goods and services | FY2021* | 11/2021 | A | A | A |
| GDP/GNP | FY2021* | 08/2021 | A | A | NA |
| Gross external debt | FY2021 | 10/2021 | A | A | NA |
| International investment position6 | FY2021* | 11/2021 | A | A | A |
Nauru uses the Australian dollar as its legal tender.
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Compiled by experts during TA missions.