Today, the European Union (EU) informed government about its decision to disburse € 98 million to support Afghanistan in carrying out reforms to finalize and operationalize its development policies (ANPDF and NPPs), maintain macroeconomic stability and mobilize domestic revenue, 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 context. It is part of a State Building Contract “SBC” signed with the Government of Afghanistan during the BrusselsConference on Afghanistan on 4 October 2016 and which already provided € 100 million in 2017.
This EU direct financial contribution of the EU for Afghanistan is linked to results achieved by the Government and recognizes its commendable efforts to create growth and jobs, improve accountability, ensure basic service delivery and address poverty during a time of political and economic uncertainty. In complementarity to the financial resources, under the SBC package the EU also provides valuable technical assistance and engages in high-level policy dialogue with the Government and other stakeholders i.e. civil society and private sector.
Mohammad Qayoumi, acting Minister of Finance said: “This contribution to the national budget demonstrates the significant progress in reforms, including our new transparent budget, ongoing work in reducing corruption, strong growth in revenue generation, and improved service delivery through the NPPs. Through budget support programs, such as the State Building Contract, the Government of Afghanistan is able to respond more effectively to the country’s priorities and ensure equitable development. I thank the European Union and its member states for its support and commitment to the people of Afghanistan.”
H.E. Pierre Mayaudon, EU Head of Delegation, said: "This direct budget support disbursement is once again a very tangible demonstration of the EU and its citizens' strong commitment to Afghanistan and its people. Following an overall positive review of progress on key reform criteria, 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 for the implementation of Government of Afghanistan-led and owned priorities. The purpose is to improve the policy environment and support effective public institutions that deliver more and better for all Afghans, boost economic growth and reduce poverty, at a time when Afghanistan continues to face major security, economic and political challenges. We are very much looking forward to the continuation of our excellent collaboration with the Government of Afghanistan."
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 PriorityProgrammes, to promote effective governance, women's economic empowerment and basic service delivery (Citizens' Charter). In view of the success of the State Building Contract, the EU and the Afghan Government are preparing for the continuation of this Budget Support operation for the period 2018-2021.