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Development projects make up 47% of National Budget

Nuku'alofa, Tonga

By Finau Fonua

Wind Farm at Niutoua, the first major development project completed under the 2019-20 National Budget. July 2019.

Tonga’s current development budget of $235.86 million pa’anga will be funded entirely by development partners according to the PDF icon2019-20 National Budget Statement, which is now published on the Ministry of Finance website.

The development budget makes up 47% of the overall national budget of $599.27 million pa‘anga, approved by parliament on 27 June. It supports projects aligned with national development goals as well as international frameworks such as the SAMOA Pathway (SIDS Accelerated Modalities of Action Pathway) and the UN Development Assistance Framework 2018-2022.  

A $42 million pa’anga wind farm opened at Niutoua village on Wednesday 10 July, was the first major development project to be completed under the 2019-20 National Budget. The five wind turbine farm, named “Ii ‘o Manu Mataongo” was financed by the Japanese government.

King Tupou VI re-iterated Tonga’s commitment to fulfilling development goals under the SAMOA Pathway, in his address to 73rd session of the United Nations General Assembly last year. He stated that Tonga sought to achieve 50 percent renewable energy by 2020, increase healthy eating to reduce Tonga’s high obesity rates, and stressed the security threat posed by climate change in solidarity with other Pacific Island States.

Development Budget

According to the national Budget Statement, the development partner with the biggest contribution is the World Bank ($67.41 million pa’anga) followed by Asian Development Bank ($47.29 million pa’anga) and the Government of Australia ($23.81 million). United Nations agencies contributed $11.45 million pa’anga while local donors contributed $2.48 million Pa’anga.

Development partner, World Bank Vice President, Victoria Kwakwa, met PM 'Akilisi Pohiva in Nuku'alofa on July 4. Photo: World Bank.

The development budget comprises $131.40 million (56%) in cash and $104.45 million (44%) in-kind. Social Infrastructure and Services were outlined as the area most covered by the development budget, totalling $108.78 million.

Concerns with foreign aid

Before the budget passed at the end of June, there was unease in parliament over Tonga’s dependency on foreign donors. The Minister of Finance, Hon. Pohiva Tu’i'onetua referred to the budget as a “half-caste budget” because only 51%, ($305 million) was financed by the government itself.

People's Representative Samiu Vaipulu, expressed his concern that Tonga was developing an addiction to foreign aid and budget support. He pointed out that in the past, the Tonga Government was more financially independent and could fund its own projects.

There were also concerns regarding how the budget would help the Government repay a $119 million loan from China, which was due at the beginning of this year but deferred by the Chinese Government for another five years.