The New Zealand foreign minister, Winston Peters, says New Zealand will continue to support Vanuatu with development assistance.
Speaking in Port Vila, Mr Peters says 54 million US dollars will be given over the next five years.
He says Vanuatu faces some serious challenges.
He says migration to the cities has brought associated problems of crime, squatter settlements and unemployment, while poverty levels are also on the increase.
Mr Peters says NZAID is supporting a so-called book flood programme to provide primary schools with a large supply of locally-written school journals.
The pilot programme found that this approach increased literacy rates by 10 percent.