Ekip
14 June 2017•Update: 15 June 2017
By Shadi Khan Saif
KABUL, Afghanistan
The Afghan government Tuesday welcomed over $500 million worth of financing package released by the World Bank for the conflict-riddled country.
The global creditor announced Tuesday that the package would help Afghanistan with refugees, expand private-sector opportunities for the poor, boost the development of five cities, expand electrification, improve food security, and build rural roads.
The financing includes grants from the International Development Association (IDA) -- the World Bank’s fund for the world’s poorest countries -- as well as contributions from the Afghanistan Reconstruction Trust Fund (ARTF) -- managed by the World Bank -- and from other partners, including Denmark, Germany and Japan.
Ajmal Hameed Abdul Rahimzai, spokesperson of the Ministry of Finance (MoF), confirmed that the government has also received $189 million ‘incentive fund’ via (ARTF) for reforms in its five key sections including income resources, organizational reforms, tax management, aid effectiveness and provincial budgeting.
Rahimzai said the $550 million received are part of the World Bank grants within three years (2016-2018) for bringing reforms.
“We intend to utilize this fund in development projects via the national budget considering the priorities”, he told Anadolu Agency.
Under the leadership of President Mohammad Ashraf Ghani, a former World Bank economist, Kabul has embarked on a gigantic mission of fighting deeply-rooted corruption.
In the latest Transparency International ranking, Afghanistan has slightly improved its standing as it was no longer on the list of the top three most corruption countries in the world. In January this year, the TI ranked Afghanistan 7th most corrupt country in its list of 175 countries.
- Utilization of budget
Utilization of the development budget, however, remains a serious governance issue in the country. An overwhelming majority of the ministries fail every year to fully utilize their development budgets in the aid-driven economy.
Last year, the country’s parliament suspended nine out of 21 ministers for failing to utilize development budgets.
The MoF, a key player in this regard, is making efforts to break this vicious cycle.
“We have taken many initiatives, have consulted with various ministries, and have worked on the monitoring systems to ensure development budgets are properly spent”, Rahimzai said.
The World Bank has noted that the new funding aims to support efforts of the government of Afghanistan to stimulate growth and ensure service delivery during a time of uncertainty when risks to the economy are significant.
The international troop withdrawal, began in 2011, coupled with political uncertainties, have resulted in a slowdown of economic growth, while government budget pressures are increasing as security threats mount and drive people from their homes, it added.
Kabul based economic analyst, Muhibullah Sharif is cautiously optimistic about the new financial lifeline for the country.
“I do not want to totally discredit the Ghani’s administration for their efforts and some success in improving the economy, but the internal rift between the leaders of the National Unity Government (NUG) coupled with rampant corruption and political crises are clearly undermining prospects for fundamental improvement in the economy”, he said.
Sharif stressed that as an agro-based economy, much of the efforts for economic growth and self-reliance should be concentrated in improving irrigation, electricity generation and supply mechanism instead of ‘short-term symbolic’ projects.
The country faces an uncertain economic outlook as economic growth has slowed considerably following the withdrawal of much of the foreign troops in 2014. Unemployment is on the rise with the World Bank estimating unemployment rate already at 40 percent.
