The minister said the Government was delighted with the significant increase in the value of its Intergenerational Trust Fund during the 2019 financial year.
“The growth rate represents an increase of around 31 per cent – or $26.4 million – from the 2018 financial year, which is a fantastic outcome for all Nauruans,” he said.
In further good news, Mr Hunt estimated the fund – which stood at $56 million in 2017 – had already increased as at 2020 to more than $125+ million valuation, since the June 2019 end-of-financial year audit. This is achieved by continued contributions from stakeholders and returns from prudent investments.
“This continued growth proves that the fund has the ability to generate future investment earnings and a future source of revenue to the Republic of Nauru.”
The fund, that commenced in 2015, exists to benefit the people of Nauru by generating future investment earnings that can be used as revenue sources beyond 2035 if necessary.
Money from the fund will be channelled into education, health, the environment and infrastructure to enhance the standard of living and quality of life for the people of Nauru.
The establishment of a trust fund was identified in the Nauru National Sustainable Development Strategy 2005-2025 to help stabilise the nation’s economy. Its core function is to replace or supplement so-called volatile, or potentially terminating, revenue streams such as dwindling phosphate royalties.
It is directed by a trust fund committee of stakeholders, which is responsible for implementing investment strategies and overseeing assets management for the future benefit of Nauru. The fund has professional administrators and international fund managers to assist the committee.
Minister Hunt, who acknowledged the work undertaken by his predecessor David Adeang, added it was “a great honour” to welcome the New Zealand Government last year as a fund committee representative.
“This now brings our stakeholders in addition to Nauru to include Australia, Republic of China (Taiwan) and New Zealand. Asian Development Bank was instrumental in the establishment of the fund and made initial contributions along with technical assistance support, and is continuing to support in 2020.” he said.
“I look forward to working with my fellow committee members, development partners and the broader team responsible for the administration and investment of ongoing contributions,” he said.
Nauru is a full member of the prestigious International Forum of Sovereign Wealth Funds which requires it to operate to very high international standards.