Nauru Phosphate Royalties Trust

The Nauru Phosphate Royalties Trust (NPRT) was a sovereign wealth fund developed by the government of the Republic of Nauru in which the government invested money from the state owned mining company, Nauru Phosphate Corporation. This money was then re-invested in a real estate portfolio, among other things, to provide the government with a reliable national income following the depletion of minable phosphates on the island. Although at one time successful, mismanagement and corruption later essentially bankrupted the fund, thus virtually bankrupting the entire Republic.

Responsibility for the Trust rests with the Ministry for the Nauru Phosphate Royalties Trust, a Cabinet position. At present, the office is exercised by the Nauruan Minister of Telecommunications Shadlog Bernicke.

In 1970, the newly independent government of Nauru purchased the mining rights to the islands lucrative phosphate mines from their previous colonial ruler, Australia, for A$21 million.

The mines brought considerable wealth to the tiny island of Nauru, with the industry bringing in around A$100–120 million annually. Annual government expenditures amounted to around A$30 million, thus giving the republic around A$80 million per annum. This surplus was then added to the trust.

At the peak of the trust's wealth, the NPRT had investments totaling A$1 billion. These investments included properties in Australia, the Philippines, Guam, and the USA. A partial list of international investments includes:

The great wealth of the tiny pacific island led it to be nicknamed the "Kuwait of the Pacific". With this great wealth, citizens and government officials flaunted it, believing it to be an endless supply. This led to high external representation and excessive official overseas travel (that included golf in the Bahamas) which blew out budgets year after year so that the government began to borrow money to supplement its huge spending. The public service had over 1,500 employees (in a country with a population less than 10,000) and the government ran deficits of A$10 million in the 1990s.

Eventually, more than A$200 million was borrowed. In order to consolidate this debt and pay interest, the government took out an A$240 million loan from General Electrics Capital Division, which was levied against the nation's international real estate portfolio.

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