Koanapo: 3.8% Manufacturing Share Too Small, Target 10% of GDP
September 30, 2026
Vanuatu needs to target an increase in manufacturing’s contribution to the national economy from about 3.8 per cent of Gross Domestic Product (GDP) to 10 per cent beyond 2030, Deputy Prime Minister (DPM) and Minister of Finance and Economic Management Johnny Koanapo says. DPM Koanapo made the remarks while officially opening the 8th edition of the Vanuatu Made Tradeshow at Independence Park yesterday in Port Vila. Koanapo, who is also Acting Minister of Trade and Commerce, said the current contribution of manufacturing to GDP remains too small for a country with significant agricultural, fisheries and natural resources. “Manufacturing contributes about 3.8 percent of GDP,” he said. “That share is too small for a country rich in cocoa, coconut, kava, beef, tuna, spices, fruit and timber.” He said the number of firms and the range of products are increasing, but the next challenge is to increase manufacturing’s contribution to economic output, employment and foreign exchange earnings. “The task now is to lift manufacturing’s contribution to output, jobs and foreign exchange — to 10 percent of GDP beyond 2030,” Koanapo said. From raw commodities to value-added products Koanapo said the Government does not want Vanuatu to remain an economy that exports raw commodities while importing finished products. “We will grow manufacturing, value addition and trade so that farms, reefs and forests feed factories, and factories feed markets at home and abroad,” he said. He said this direction is aligned with Vanuatu 2030: The People’s Plan and is supported by ongoing legislative and infrastructure reforms. These include the proposed ninth amendment to the Constitution to allow for the Economic Development Zone Bill in November, the construction of standard packhouses on Efate and Santo, and the preparation of a National Export Strategy. “Laws, infrastructure and markets must move together,” he said. Manufacturing and economic recovery Koanapo said Vanuatu’s economy is recovering from the impacts of COVID-19, successive disasters and the December 2024 earthquake. He said reconstruction, agriculture, services and the return of tourism are supporting economic growth, but the country cannot rely solely on tourism and raw commodity exports. He identified small and medium-sized enterprises as an important vehicle for delivering greater value addition. The Deputy PM said opportunities exist to transform agricultural, livestock and fisheries products into finished or processed goods. These include producing oil and soap from copra, chocolate from cocoa, standardised export products from kava, boxed beef from cattle, processed fish from tuna, and packaged food from roots and fruits. He said these activities could support both import substitution and export manufacturing. “The packhouse development programme has the ability to address import substitution, address balance of payments, expand agricultural investments and create entrepreneurship opportunities for Ni-Vanuatu,” Koanapo said. Kava industry demonstrates potential Koanapo pointed to the kava industry as an example of the economic potential of value-added production. He said kava exports contributed approximately VT5.3 billion in 2025, while domestic consumption was estimated at about VT9.36 billion annually. He said the same approach is being applied through the Santo Economic Hub, with the Asian Development Bank and other development partners supporting investment in agriculture, livestock and fisheries, as well as packhouses, processing facilities, cold-chain systems and certified export infrastructure. Support for local businesses Koanapo said the participation of businesses at this year’s Vanuatu Made Tradeshow reflects years of Government investment and support. The 92 exhibitors include businesses involved in food and beverages, garments, cosmetics and health products, agri-tourism, and women and youth enterprises. He also acknowledged innovations in mobile payments developed with Vodafone and Digicel, describing them as part of building resilience in the way businesses trade. The Deputy PM said the Government would continue working to provide affordable credit, including through Productive Sector Banking Facilities, to help existing businesses expand and new businesses start. He said the 2027 Budget would carry this commitment, alongside development plans and budget support from Australia, New Zealand and the European Union. Buy local, empower local Koanapo said increasing manufacturing to 10 per cent of GDP beyond 2030 would require sustained investment rather than speeches alone. “It will happen by credit, standards, packhouses, energy, skills and markets — cruise ships, e-commerce, trade agreements, and the National Export Strategy,” he said. He said the Vanuatu Made Tradeshow was particularly significant because it was being held at Independence Park, the same location where Vanuatu’s political independence was declared 46 years ago. “You honour this park by bringing enterprise onto the ground where independence was declared,” Koanapo said. He pledged the Government’s continued support through policy, budgets, standards and market access before officially declaring the 8th edition of the Vanuatu Made Tradeshow open. “Buy local. Empower local. Complete our economic independence. Connect Vanuatu Made to the world,” he said. SOURCE: VANUATU DAILY POST
