Challenges:
- The Afghan Government needs external finance to ensure that essential basic services are maintained. The ARTF supports salary payment in critical services such as the education and health care.
- Fiduciary controls started from a low base meaning donors were unwilling to channel funds through government systems.
- The Government needed support to ensure its budget had flexibility, credibility and the means to prioritize effectively. This was essential to build the accountably of the state.
Examples of Impact:
Recurrent costs window
- ARTF has become an increasingly important contributor to the government's recurrent and investment budget. ARTF has committed $1.2 billion to the recurrent window.
- The ARTF recurrent window finances salaries and wages of about 220,000 non-uniformed civil servants, over half of whom are working outside the city of Kabul.
- It has financed the government's operating and maintenance expenditures outside of the security sector, including bulk purchases of essential supplies.
- The ARTF promotes better reporting and accountability mechanisms that will help a better overall budget process.
Investment window
- ARTF has committed US$405 million to the investment window, for infrastructure, rural development, TA & capacity building and education. Projects funded through the ARTF often co-finance other donor operations.
- 15 microfinance institutions established with a network of over 224 branches in 22 provinces, with nearly 311,600 loan and savings clients; 69 percent of the clients are women and the loan repayment rate is 95 percent. (Microfinance Support)
- Eight out of 100 Afghans now have access to a telephone, compared to less than one out of 100 in 2002; the number of telephones in Afghanistan has increased from 57,000 in 2002 to 2.16 million in 2006 (Telecommunications Project)
- 2,476 km of rural access roads constructed; 3,073m of cross drainage structures built (National Emergency Employment Program Phase)
Approach:
The multilateral Afghanistan Reconstruction Trust Fund (ARTF) was set up in May 2002 to provide support to Afghanistan in two areas: provide support to the recurrent costs of government; and support investment projects that are priorities on the Government's development budget. The Fund is administered by the World Bank and is governed by a Management Committee consisting of the United Nations, the Asian Development Bank and the Islamic Development Bank. As of August 2007, 28 donors have pledged a total of US$2.3 billion to the ARTF.
Key Facts:
- 28 donors have pledged a total of US$2.3 billion to the ARTF
- ARTF finances salaries and wages of about 220,000 non-uniformed civil servants
- ARTF has committed US$405 million for infrastructure, rural development, capacity building and education
Permanent URL: http://go.worldbank.org/W3G5LAE4P0