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There are limited natural sources of freshwater on Nauru. Rooftop storage tanks collect rainwater. The islanders are mostly dependent on three desalination plants housed at Nauru’s Utilities Agency.


The Nauruan economy peaked in the mid-1970s, when its GDP per capita was estimated to be US$50,000, second only to Saudi Arabia. Most of this came from phosphate mining, which declined from the early 1980s. There are few other resources, and most necessities are imported. Small-scale mining is still conducted by RONPhos, formerly known as the Nauru Phosphate Corporation. The government places a percentage of RONPhos’s earnings into the Nauru Phosphate Royalties Trust. The trust manages long-term investments, which were intended to support the citizens after the phosphate reserves were exhausted.

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Exhausted Phosphate Mine

Because of mismanagement, the trust’s fixed and current assets were reduced considerably and may never fully recover. The failed investments included financing Leonardo the Musical in 1993. The Mercure Hotel in Sydney and Nauru House in Melbourne were sold in 2004 to finance debts and Air Nauru’s only Boeing 737 was repossessed in December 2005. Normal air service resumed after the aircraft was replaced with a Boeing 737-300 airliner in June 2006. In 2005, the corporation sold its remaining real estate in Melbourne, the vacant Savoy Tavern site, for $7.5 million.

The value of the trust is estimated to have shrunk from A$1.3 billion in 1991 to A$138 million in 2002. Nauru currently lacks money to perform many of the basic functions of government; for example, the National Bank of Nauru is insolvent. The CIA World Factbook estimated a GDP per capita of US$5,000 in 2005. The Asian Development Bank 2007 economic report on Nauru estimated GDP per capita at US$2,400 to US$2,715.

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Nauru Exports Treemap 2017

There are no personal taxes in Nauru. The unemployment rate is estimated to be 23 percent, and of those who have jobs, the government employs 95 per cent. The Asian Development Bank notes that, although the administration has a strong public mandate to implement economic reforms, in the absence of an alternative to phosphate mining, the medium-term outlook is for continued dependence on external assistance. Tourism is not a major contributor to the economy.

In the 1990s, Nauru became a tax haven and offered passports to foreign nationals for a fee. The inter-governmental Financial Action Task Force on Money Laundering (FATF) identified Nauru as one of 15 “non-cooperative” countries in its fight against money laundering. During the 1990s, it was possible to establish a licensed bank in Nauru for only US$25,000 with no other requirements. Under pressure from FATF, Nauru introduced anti-avoidance legislation in 2003, after which foreign hot money left the country. In October 2005, after satisfactory results from the legislation and its enforcement, FATF lifted the non-cooperative designation.

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Nauru Regional Processing Center

From 2001 to 2007, the Nauru detention center provided a significant source of income for the country. The Nauruan authorities reacted with concern to its closure by Australia. In February 2008, the Foreign Affairs minister, Dr Kieren Keke, stated that the closure would result in 100 Nauruans losing their jobs, and would affect 10 per cent of the island’s population directly or indirectly: “We have got a huge number of families that are suddenly going to be without any income. We are looking at ways we can try and provide some welfare assistance but our capacity to do that is very limited. Literally we have got a major unemployment crisis in front of us.” The detention center was re-opened in August 2012.


The island is solely served by Nauru International Airport.

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