The World Bank Board of Executive Directors approved a $400 million grant to help Afghanistan "sustain the pace of key economic and public finance reforms, and support the country to manage current risks and uncertainties compounded by the COVID-19 crisis," the bank said in a statement on Friday.
"The Incentive Program Development Policy Grant comprises $160 million from the International Development Association (IDA), the World Bank Group’s fund for the poorest countries, and $240 million from the Afghanistan Reconstruction Trust Fund (ARTF), managed by the World Bank on behalf of 34 donors," said the World Bank.
According to the statement, the Incentive Program Development Policy Grant will support a range of key reforms to improve business regulation and encourage private investment, expand social inclusion and support civil service reforms, increase resilience to natural disasters, improve tax administration and public financial management, and safeguard fiscal sustainability.
“Today’s Board approval is a strong indication that the World Bank is redoubling its efforts to help Afghanistan and its people beyond the current COVID-19 crisis,” said Henry Kerali, World Bank Country Director for Afghanistan.
“This assistance will help Afghanistan maintain its reform momentum throughout a difficult period and provide vital financial support to the government to manage revenue shortfalls arising from coronavirus impacts,” said Kerali.
Afghanistan faces major challenges and uncertainties in 2020. The global COVID-19 pandemic has had an immediate negative impact on Afghanistan. Border closures have severely impacted government customs receipts, while measures to contain the spread of the virus are likely to have a strong negative impact on economic activity. Poverty remains deep and widespread, while security and political uncertainties continue, said the statement.