Business

IMF, Afghanistan reach preliminary agreement over Extended Credit Facility

Published

4 years ago

August 15, 2020

The International Monetary Fund (IMF) and the Afghanistan authorities have reached a preliminary agreement on an economic reform program to be supported by a new three-and-half year US$364 million Extended Credit Facility (ECF).

This announcement comes just three months before the United Nations’ donor pledging conference for Afghanistan gets underway.

In a statement issued by the IMF on Friday, the fund said the ECF will help mitigate the economic impact of the Covid-19 pandemic, maintain macroeconomic stability, and underpin reforms for economic resilience and good governance.

The fund also stated that continued financial assistance from international partners is critical to support objectives of Afghanistan’s National Peace and Development Framework for 2021-25, including inclusive growth, poverty reduction, and self-reliance.

Leading the IMF’s team was Azim Sadikov, and virtual discussions were held with Afghan officials through July and August on the country’s economic reform program.

Sadikov said however that the agreement is subject to the approval of the IMF’s Executive Board, which would possibly consider the agreement in October after preliminary conditions have been met by Afghan authorities, including the improvement of accountability and transparency in procurement processes.

“The new ECF arrangement will support authorities’ reform program to maintain macroeconomic stability and lay the ground for a sustained post-pandemic economic recovery while continuing to advance structural reforms,” Sadikov said.

He said the reform program aims to gradually reverse the fiscal decline due to the pandemic and instead create space for development sending while increasing self-reliance.

He stated improvements in customs collections and revenue administration need to be improved and the planned Value Added Tax (VAT) process needs to be implemented in 2022.

“Monetary policy will continue to focus on maintaining price stability and a flexible exchange rate regime, while fostering confidence in the Afghani,” Sadikov said.

He also said that reforms, in accordance with the new ECF arrangement, will focus on addressing issues that hamper economic growth and resilience.

“To that end, the program will aim to improve fiscal governance, strengthen the anti-corruption regime, and bolster the financial sector,” he said.

“Bolstering the financial sector, including by completing the reform of state-owned banks, will also be important to boost its capacity to contribute to growth.

“Coming before the November pledging conference, the ECF arrangement is expected to catalyze donor financing, which is critical to support Afghanistan’s reform and development objectives under the multi-year National Peace and Development Framework,” he said.

The pledging conference is organized every four years and was last held in 2016 in Brussels.

This year, Finland will host the conference, which will be organized by both the UN and Afghanistan.

Previous international financial commitments largely end by December of this year.

Up Next

German-funded road project completed in Samangan

Don't Miss

UN calls on Afghanistan to prevent further killings of human rights defenders

Business

Daily truck clearances at Torkham drop from 400-500 to 5-10

Published

5 days ago

December 13, 2024

Ariana News

Pakistan’s Sarhad Chamber of Commerce and Industry (SCCI) has said that daily truck clearances at Torkham crossing have declined from 400-500 to 5-10.

SCCI President Fazal Muqeem Khan said this at the signing ceremony of a memorandum of understanding (MoU) with the Pakistan-Afghanistan Joint Chamber of Commerce and Industry to promote bilateral trade and cooperation.

He said the volume of trade between Pakistan and Afghanistan had fallen from $3 billion to $1 billion annually.

Fazal Muqeem also highlighted the adverse impact of the 2% Infrastructure Development Cess (IDC) imposed by the Khyber-Pakhtunkhwa government on trade and transit.

Business

Turkish scholars, charity officials assess investment prospects in Afghanistan

Officials pledged to encourage Turkish investors to explore and capitalize on investment opportunities in Afghanistan

Published

1 week ago

December 10, 2024

Ariana News

Afghanistan’s Acting Minister of Energy and Water, Mullah Abdul Latif Mansoor, met with a delegation of Turkish scholars and officials from the Adif Charity Foundation on Tuesday to discuss various political, religious, and social issues.

According to the Ministry of Energy and Water, Mullah Mansoor praised Adif’s humanitarian efforts in Afghanistan and highlighted the country’s ample resources for energy production.

He emphasized that Afghanistan currently offers a favorable environment for investment in all sectors, assuring the Turkish delegation of the Islamic Emirate’s commitment to ensuring the safety and security of investors and their assets.

In response, Adif officials pledged to encourage Turkish investors to explore and capitalize on investment opportunities in Afghanistan, signaling a potential boost in economic and developmental cooperation between the two nations.

Business

Uzbek envoy to Pakistan discusses Trans-Afghan Railway project with Pakistani minister

The Trans-Afghan Railway project is expected to serve as a powerful stimulus for trade and economic integration among numerous countries in the region

Published

1 week ago

December 9, 2024

Ariana News

Regional connectivity projects including the Termez-Kabul railway line, the Trans-Afghan Railway, and the multimodal Belarus-Russia-Kazakhstan-Uzbekistan-Afghanistan-Pakistan transport corridor, are key to the region’s success, the Ambassador of Uzbekistan to Pakistan Alisher Tukhtayev said during a meeting with Pakistan’s Defense Minister Khawaja Asif on Friday.

The two officials discussed a range of issues as well as coordinating efforts to ensure stability and deepen economic integration in the region.

Asif however pointed out that Tashkent has become an important hub for regional cooperation, Pakistani media reported Monday.

Special focus was given to the implementation of the Trans-Afghan Railway project, which is expected to serve as a powerful stimulus for trade-economic integration to numerous countries.

The ambassador said the governments of Uzbekistan, Pakistan, and Afghanistan are actively cooperating in the implementation of joint economic and infrastructure projects and one of them is the construction of the Trans-Afghan Railway.

He said the “Termez-Kabul-Peshawar” railway project plays an important role in restoring ties of regional connectivity between Central and South Asia.

He added that once the project is launched, the volume of trade will increase significantly and shipping costs will decrease.

Tukhtayev said the railway connectivity will contribute hugely to regional stability and overall prosperity by aiding Afghanistan’s economic recovery.

He also said the project will facilitate the delivery of Uzbek goods to world markets through Pakistani ports and will open up a new route for Pakistan to export its products to Central Asian, and European markets.

According to him, the Trans-Afghan railway will be able to carry up to 20 million tons of cargo per year, and transportation costs will decrease by 30-35% and timing of deliveries will be cut from two weeks to three to four days.

He also stated that the international cooperation project on the development of the multimodal transport corridor Belarus-Russia-Kazakhstan-Uzbekistan-Afghanistan–Pakistan is being actively promoted.

[embed]https://youtu.be/2Osh4f_dA5Y[/embed]