The Asian Development Bank says Vanuatu faces significant challenges if it's to continue economic growth at the present rate.
A new ADB report names the republic one of the fastest growing economies in the Pacific, with growth of almost four percent last year in an unprecedented seventh consecutive year of growth.
It predicts the economy to grow by about four and a half percent this year but the bank's regional director, Eugenue Zhukov says sustainable growth must be led by the private sector.
"And for private sector to develop fast in Vanuatu there are a number of areas which need to be addressed. First and foremost the quality of infrastructure in Vanuatu needs to be improved. We feel that while the governance has improved in Vanuatu there is more way to go in this area. Furthermore while the government has been working with us on improving the legal framework for commercial transactions it still remains complex and more progress is needed in this area."
Eugenue Zhukov says issues over land access and tenure are also pressing and rural people need better access to finance.