On Monday, 21st of August, the European Union (EU) approved a €100 million package to support Afghanistan in carrying out reforms to improve its development policies, maintain macroeconomic stability, advance sound public financial management and strengthen state budget transparency.
The EU's decision follows a positive assessment on progress in these reform areas over the last twelve months against the background of a challenging security situation. It is part of a State Building Contract (SBC) signed with the Government of Afghanistan during the Brussels Conference on Afghanistan on 4 October 2016. -SBC brief as annex-
This EU financial contribution for Afghanistan is meant to support the Government of Afghanistan in creating growth and jobs and to ensure service delivery during a time of uncertainty that includes significant risks to the economy.
H.E. Eklil Hakimi, Minister of Finance said: “The approval of this allocation means that Afghanistan has been making significant progress in crucial areas such as public policy, macroeconomic, financial management and budget transparency and oversight. We welcome conditionality-based mechanism, such as the State-Building Contract, they give the Government of Afghanistan flexibility and fiscal space to respond quickly to our countries evolving development priorities and reaffirm our mutual commitments to see a prosperous, stable and self-reliant Afghanistan. I thank the EU, its member states, and the people of Europe for their generous support to Afghanistan.”
Franz-Michael Mellbin, EU Special Representative and Head of Delegation, said: "The allocation approved today is a very tangible demonstration of the EU's long-standing commitment to Afghanistan and its people. Following an overall positive review of progress on key reform commitments, the EU's State Building Contract makes a direct contribution to the National Budget and provides the Government of Afghanistan with substantial financial resources and flexibility to allocate these where they are most needed. The purpose is to improve services to the population, boost economic growth and reduce poverty, at a time when Afghanistan continues to face major security, economic and political challenges."
The SBC supports the Government of Afghanistan to implement the reform agenda presented at the Brussels Conference on Afghanistan held in October 2016, as set out in the Afghanistan National Peace and Development Framework and the associated National Priority Programmes, to promote effective governance, women's economic empowerment and basic service delivery (Citizens' Charter).