World bank in a letter to President Ghani, halted the $200 million aid to Afghanistan until banking sector data is revealed.

“I would like to alert you, however, to two important issues that remain to be resolved and may impact our capacity to disburse the full amount of US$200 million allocated for the Incentive Program. Firstly, under our current operational policies, the World Bank is obligated to assess and confirm the adequacy of a recipient country’s macroeconomic policy framework prior to disbursing budget support funds,”.

The assessment will continue if the World Bank is provided access to a range of primary data and the data belonging to the banking sector.

“Unfortunately, we have not been able to obtain banking sector data from Da Afghanistan Bank (DAB) despite several written requests. This data is not sensitive and was shared with the World Bank prior to the release of funds under previous Incentive Programs,” the letter said.

The letter said the recent cabinet’s approval of (PIM) Public Investment Management was a policy before action under the 2020 incentive program.

Amendments to the PPP Law were approved despite written advice of the World Bank and IMF, as conveyed in a letter to the Minister of Finance dated October 13.  

The letter indicated,  “A key policy intent of the new Regulations was to align PIM and Public-Private Partnership (PPP) processes and to ensure rigorous oversight and management of any associated fiscal risks. While the PIM Regulations have been passed, we understand that there are important inconsistencies between the PIM Regulations and recent amendments to the PPP Law, which have transferred responsibility for the management of PPPs from the Ministry of Finance (MOF) to the Administrative Office of the President (AOP),”

“Look forward to discussing this issue further. Until a clear way forward is agreed to ensure that the PIM Regulations remain consistent with recently approved amendments to the PPP Law, we will be unable to disburse the US$20 million associated with the approval of the PIM Regulations,” the letter said.

“Please rest assured that issues related to the PIM Regulations will not impact planned disbursement against the remaining nine policy actions, and we would still expect to disburse US$180 million out of a total allocated US$200 million as soon as banking sector data is shared,” the letter added.

The World Bank has committed $600 million in aid to Afghanistan, so far World Bank provided 400 million dollars in aid to Afghanistan.

Author

  • Mohammad Haroon Alim holds a BBA degree from Kardan University. He works as a sub-editor for Khaama Press.