The Asian Development Bank (ADB) has approved a $3 million grant and a $3 million loan to help Tonga strengthen its long-term economic growth prospects and capacity to respond to external economic shocks.
“The grant and loan will fund the first of three subprogrammes of the ADB-supported Building Macroeconomic Resilience Programme for Tonga,” said Johannes Wolff, Public Finance Economist from ADB’s Pacific Department.
“The assistance is policy-based, meaning the funds can be released as budget support once policy actions outlined in the programme are successfully completed, as they have been in subprogramme one.”
PACNEWS reports subprogramme one’s outputs cover a range of measures to strengthen fiscal resilience and to help the country continue to respond to the damage caused by Tropical Cyclone Winston, which struck Tonga in February 2016. The funding includes $1 million from ADB’s Disaster Response Facility to provide support in the aftermath of the cyclone.
The full programme is set to run from 2016 to 2018 and builds on previous policy-based support from ADB and other development partners to help the government improve its fiscal position through policy and public enterprise reforms. Since 2009, reforms carried out by the government have strengthened debt management, public wage bill management, public financial management, the business regulatory framework and public enterprises.
Since it began operations in Tonga in 1972, ADB has provided the country with $168.5 million in loans, grants, and technical assistance