The government's citizenship sales programme has brought in millions of dollars in revenue but public criticism of it has intensified in recent years.
Those who buy citizenship are eligible to hold passports.
"Records showed that since June 2019, 4000 passports have been sold under the Citizenship Program to foreigners who have no interest to invest in Vanuatu, thus diminishing our economic development and destroying the very status that has been given to our people by the framers of the Constitution," the president was quoted as saying by the Vanuatu Daily Post.
In a speech to mark constitution day, President Moses Obed Tallis said that people were becoming stateless in their own land.
Mr Tallis's comments mark an unusual foray by a head of state into politics.