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World Bank Grants Tonga $15 Million to Fuel Private Sector Growth

Tonga has secured a US$15 million grant from the World Bank to overhaul its labor market and business environment. The funding, channeled through the International Development Association, aims to address high youth unemployment while fostering private sector-led growth through improved workforce training, digital financial services, and sustainable ocean resource management.

World Bank Grants Tonga $15 Million to Fuel Private Sector Growth

More than one in four young Tongans currently remain outside of employment, education, or training. This initial phase of a two-part program targets this deficit by prioritizing apprenticeships and practical skill development. By aligning these workforce improvements with a more favorable climate for business investment, the initiative seeks to move beyond mere job creation toward the expansion of higher-paying roles.

The reform package also integrates digital financial services to broaden economic participation. Finance Minister V. Sivoki Lavemaau noted that the program serves to bolster household resilience, particularly for vulnerable families facing economic or environmental shocks. Alongside these fiscal measures, the government plans to implement new marine spatial planning. This strategy aims to balance the development of fisheries and tourism with the long-term preservation of the country’s natural resources.

Tatiana A. Proskuryakova, World Bank Director for the South and North Pacific, emphasized that the grant supports a broader effort to stabilize the economy against future disruptions. By linking private sector development with sustainable management, the reforms aim to create an enduring foundation for growth that protects livelihoods while expanding local opportunities.

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