The staff of the International Monetary Fund and the Afghan government have reached a preliminary agreement for a three-and-half year, $364 million financing package to support the country’s economic reform program, the IMF said on Friday.
It said the agreement was subject to approval by the Fund’s executive board which is expected to consider it in late October. If approved, it would be supported by the IMF under its Extended Credit Facility (ECF).
The arrangement will support authorities’ reform program to maintainmacroeconomic stability and lay the ground for a sustained post-pandemic economic recovery while continuing to advance structural reforms.
As the recovery gets underway, the reform program will aim to gradually reverse the fiscaldeterioration caused by the pandemic and create space for development spending while increasing self-reliance, mainly through improvements in customs and revenue administration and value added tax implementation in 2022, IMF said.
The reforms will also “focus on addressing structural fragilities that hamper growth, economic resilience, and equitable social outcomes. To that end, the program will aim to improve fiscal governance, strengthen the anti-corruption regime, and bolster the financial sector,” said Azim Sadikov, head of an IMF team.
“The program will aim to improve fiscal governance, strengthen the anti-corruption regime, and bolster the financial sector,” Sadkov said in a statement. “Key reforms include building capacity to manage public investment and fiscal risks, improving the effectiveness of the asset declaration regime, enhancing spending efficiency, and strengthening social protection.”
He said that the arrangement is expected to catalyze donor financing before the pledging conference in November.
