The Asian Development Bank (ADB) on Wednesday approved a $100 million grant to help the government of Afghanistan respond to the coronavirus disease (COVID-19) pandemic, ADB said in a statement.
"ADB reaffirms its full commitment to supporting Afghanistan in its fight against COVID-19 and reducing the adverse impact of the pandemic on the lives of Afghans and the economy,” said ADB President Masatsugu Asakawa. “The assistance will help strengthen the health system, expand social protection for the poor and vulnerable population while ensuring gender mainstreaming, and support macroeconomic stabilization and job creation in Afghanistan.”
The statement said that Afghanistan’s economic outlook has deteriorated during the COVID-19 pandemic because of business lockdowns, a sharp drop in household incomes, and a downturn in regional trade and remittances.
ADB forecasts Afghanistan’s gross domestic product (GDP) to contract by 5.0% this year.
“Nearly 250,000 micro, small, and medium-sized enterprises (MSMEs), accounting for over 80% of nonagricultural employment, have been hit hard. The unemployment rate is projected to rise to 37.9% in 2020 from 23.9% in 2019. The budget deficit including grants has nearly tripled, reaching 3% of GDP in 2020, compared to 2019. Spikes in food prices due to disruptions in the food supply have increased the food insecurity risks” ADB stated.
The national poverty rate is projected to reach up to 72% this year from 55% in 2017, with an additional 6 million people falling into poverty.
ADB said "a health emergency of such magnitude has aggravated the pressure on the country’s inadequate health care system, compounded by increasing transmission risks from internally displaced persons, returning migrants, and refugees."
In May, ADB approved a $40 million emergency assistance grant for Afghanistan.
The funds will support the construction of 15 and rehabilitation of 5 hospitals and medical facilities, adding more than 1,100 new hospital beds; procurement of urgent medicines, medical supplies, and equipment; and training of at least 3,000 health workers, including 900 women, in COVID-19 surveillance, prevention, and treatment, said ADB.