The Executive Board of the International Monetary Fund (IMF) has approved a 42-month arrangement for Afghanistan under the Extended Credit Facility (ECF) in an amount equivalent to SDR 259.04 million (about US$ 370 million or 80 percent of Afghanistan’s quota) to support the authorities’ economic reform program aimed at sustainable growth and poverty reduction.
IMF in a press release said that the program seeks to preserve macroeconomic stability, reverse the fiscal deterioration caused by the pandemic, and protect development and social spending.
According to the press release, the structural reforms under the program will focus on mobilizing domestic revenue, improving the quality of public spending and public financial management, bolstering the financial sector, and strengthening the anti-corruption regime.
“The ECF arrangement will also help cover Afghanistan’s external and fiscal financing needs that emerged since the start of the pandemic.”
Following the Board’s decision, the equivalent of SDR 80.95 million (about US$115 million) is available for immediate disbursement; the remaining amount will be phased in over the duration of the Fund-supported program, subject to semi-annual reviews.
Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair in a statement said, “The COVID-19 pandemic continues to weigh heavily on Afghanistan’s economy and livelihoods. The authorities’ determined response and expedient donor support have prevented a humanitarian crisis. However, the pandemic has set back progress toward self-reliance.”
“The Extended Credit Facility will support post-pandemic recovery, anchor reform implementation, and catalyze donor financing. The authorities’ reform program aims to preserve macro-financial stability and support sustainable growth and poverty reduction. Its success hinges on the steadfast reform implementation, continued donor support, agile response to shocks, and capacity development,” he added.