By Mark Smulian | 8 August 2013

The World Bank has given $50m to the Afghan government to help it reinforce legal, regulatory and institutional reforms.

The aim of the grant, given through the International Development Association, is to support policy reforms designed to strengthen customs revenues and improve the environment for investment in sectors with a high growth potential including land administration and management, mining, and information and communication technologies.

Afghanistan is making a transition away from an economy heavily dependent on aid to one based on its own resources.

The World Bank said the anticipated decline in foreign aid could reduce the country’s growth prospects to about half of its current average.

Poverty rates are persistently high and some 400,000 to 500,000 young people enter Afghanistan’s labour force every year.
The country’s budget relies to a large degree on donors, and financing needs are expected to increase as a result of the handover of security and development responsibilities to the Afghan government and further expansion of public service delivery.

Paul Edwin Sisk, World Bank acting head of office for Afghanistan, said: ‘The World Bank stands with the Afghan government to implement necessary policy reforms and pave the way for investments in sectors with high growth potential.

‘This particular grant will help the government maintain growth momentum during the transition and beyond.

‘As the international aid is expected to decline, this grant will also strengthen revenue mobilisation and fiscal sustainability.’