• Context

    • Economic recovery is slow as continued insecurity is curtailing private investment and consumer demand. Agricultural growth has been constrained by unfavorable weather conditions. The fiscal position has remained strong, driven by improvements in revenue performance, although the government remains heavily reliant on donor grants. Poverty has increased amid slow growth, security disruptions to services, and poor agricultural performance.
    • Afghanistan faces numerous political challenges as it fights the insurgency. Presidential elections together with the country's district-council elections and parliamentary polls in Ghazni Province are due in September 2019.
    • Peace talks have gained some momentum after the Kabul Conference in February 2018 in which President Mohammad Ashraf Ghani made an unconditional offer for negotiations with Taliban, followed by a brief first-ever ceasefire in June, and subsequent direct talks between the US and Taliban.
    • World Bank Group engagement pursues a programmatic approach to support the Afghanistan National Peace and Development Framework (ANPDF). Advisory work and operations focus on macro-fiscal policy and management; finance, private investments and jobs creation; public sector governance and anti-corruption; human capital development and service delivery; citizen engagement and social inclusion, urban development; and infrastructure, connectivity and sustainability.

    Country Context

    The security situation has worsened. Civilian casualties are at their highest since 2002, with an unprecedented level of conflict-induced displacement. Since 2007, the number of injuries and deaths has increased five-fold, and in 2016 and 2017, more than 1.1 million Afghans were internally displaced due to conflict. Between January – June 2018, the United Nations Assistance Mission for Afghanistan (UNAMA) recorded 1,692 civilian casualties – more than at any comparable time over the last 10 years since records have been kept.

    UNAMA attributed 52 percent of civilian casualties from suicide and complex attacks by Daesh, mainly in Kabul and Nangarhar Province.

    The Taliban were responsible for 40 percent and the remainder were attributed to unidentified anti-government elements.

    At the same time, 2016 and 2017 witnessed the return of almost 1.7 million documented and undocumented Afghan refugees, primarily from Pakistan and Iran. Internal displacement and large-scale return within a difficult economic and security context poses risks to welfare, not only for the displaced, but also for host communities and the population at large, putting pressure on service delivery systems and increasing competition for already scarce public services and economic opportunities.

    The Government of Afghanistan continues to pursue its ambitious reform agenda.

    On 27–28 November 2018, the Geneva Conference on Afghanistan was co-hosted by the Government of the Islamic Republic of Afghanistan and the United Nations. Delegates from 61 countries and 35 international organizations, and representatives of civil society, the private sector and the media attended in the conference. Participants at the conference renewed their partnership and cooperation for Afghanistan’s peace, prosperity and self-reliance. The conference was held between two pledging conferences: the Brussels Conference on Afghanistan (2016) and the next pledging conference expected to be held in 2020.

    In October 2016, the government presented the Afghanistan National Peace and Development Framework (ANPDF) at the Brussels Conference on Afghanistan. At the conference, attended by representatives of around 70 countries and 30 international organizations, development aid of $3.8 billion per year was committed.

    Recent Economic Developments

    Afghanistan has experienced a slight recovery in growth since 2015, with growth accelerating to 2.3 percent in 2016 and reaching 2.7 percent in 2017.

    Growth in 2017 was driven mostly by the services sector, which expanded by 2.5 percent in the context of recovering confidence and investment. The agricultural sector grew by 3.8 percent, with strong growth in fruit and vegetables offsetting declining wheat production in the context of ongoing drought impacting the northern and eastern areas of the country.

    Inflation remained moderate through 2017 and has declined through 2018. Period-average inflation for 2017 was 5 percent, with declining domestic food prices (fruit and vegetables) and weakening prices for imported grains offsetting increased energy prices. Low inflation through 2018 (reaching -1 percent y-o-y in June) has been driven by declining food prices, with strong local production of fruit and vegetables, and steady international grain prices.

    Exports grew strongly in 2017 and into 2018. Exports in 2017 were 28 percent higher than 2016 exports, while Q1 2018 exports were up nearly 50 percent on Q1 2017 levels.

    Export growth has been driven by the establishment of new air corridors to India, the resolution of border issues that constrained trade with Pakistan during 2016, and continued gradual depreciation of the afghani relative to major trading currencies.

    Imports also increased, however, driven by higher energy prices and increased grain imports in the context of drought-related disruption to domestic wheat production. Consequently, the merchandise trade balance widened further, from 31.6 percent of GDP to 33.6 percent of GDP.

    The wide trade deficit is financed by aid inflows, and the current account remains in surplus (1.6 percent of GDP at end-2017). Driven by the current account surplus, foreign exchange reserves continued to accumulate ($8.2 billion at end-2017, more than one year of merchandise import cover). The afghani depreciated steadily by around 4 percent against the U.S. dollar during 2017 (end period) and into 2018 (6 percent depreciation against the U.S. dollar in the first half of 2018), driven mostly by the general strengthening of the U.S. dollar but possibly reflecting capital flight in the context of election-related uncertainties.

    Revenues continued to grow strongly in 2017, increasing by around 15 percent in nominal terms and exceeding budgeted levels by 5.5 percent, driven by administrative and compliance improvements. However, donor grants fell well short of budgeted levels, leading to a fiscal deficit of around 0.5 percent of GDP, even despite a 2.5 percentage decline in overall expenditure. Revenue growth ceased in the first half of 2018, reflecting slowing economic activity and potential deterioration in governance around upcoming elections.

    Reflecting slow recent growth, poverty has increased significantly, resulting in 55 percent of the population living below the national poverty line in 2016–2017, compared to 38.3 percent in 2012–2013 – an increase of 5 million. Living standards are also threatened by continued drought conditions, which are negatively impacting wheat harvests, generating food insecurity in many areas of the country. The displacement crisis also continues, with more than 1.7 million Afghans internally displaced and more than 2 million returning to Afghanistan – mostly from Pakistan and Iran – since 2015.

    Few Afghans have access to productive or remunerative employment. A quarter of the labor force is unemployed, and 80 percent of employment is vulnerable and insecure, comprising self- or own account employment, day labor, or unpaid work. Almost three-quarters of the population are below the age of 30, and roughly 25 percent are between the ages of 15 and 30. This large youth cohort of approximately 8 million is entering the labor market with little education and few employment opportunities. A natural consequence of the poor security situation and limited development resources, job creation has been unable to keep up with population growth, and good jobs are few and far between.

    Though increasing over time, just over half (54 percent) of young Afghans are literate. Labor force participation rates of young Afghan women are particularly low due to higher rates of inactivity and unemployment. Young Afghans (age 15–24) have a high unemployment rate of 31 percent, while 42 percent are neither in employment, education, or training. Progress with education is threatened by the security situation. The net attendance rate in secondary education fell from 37 percent to 35 percent between 2013 and 2016, driven by declining attendance among girls.

    Economic Outlook


    Recent recovery appears increasingly vulnerable. Growth is expected to slow to 2.4 percent in 2018, in the context of election-related uncertainties and weak business confidence. Growth is expected to accelerate gradually to around 3 percent by 2020 as confidence recovers. In the context of gradually declining aid, the current account surplus is expected to narrow to 0.2 percent of GDP in 2018 before moving into a slight deficit from 2019 (1.2 percent of GDP). Foreign exchange reserves are expected to remain at comfortable levels, however, at around 11 months of import cover by 2020, reflecting very large current reserves. Inflation is expected to remain moderate, with higher energy prices offset by low domestic fruit and vegetable prices. Drought is not expected to have a major impact on food prices given stable international grain prices. With flattening of recent revenue growth, a fiscal deficit of around 0.4 percent of GDP is expected in 2018.  

    Afghanistan faces substantial risks in the short-term arising from the possibility of political instability and violence in the context of upcoming elections. The contested 2014 presidential elections had negative impacts on confidence, investment, and governance, feeding into lower growth and revenues. A similarly disruptive election period could have major negative impacts on revenues, investment, and growth over 2018, 2019, and beyond. On the other hand, progress with a negotiated peace settlement with the Taliban could have a major positive impact on investment confidence, potentially spurring accelerated growth and improved government revenues.

    Over the medium term, and in the context of expected declines in aid, economic development progress will depend on mobilizing the sectors with greatest capacity to support increased growth, job creation, exports, and government revenues. This is likely to require a balanced growth strategy, including increased investment in agricultural productivity (including through expanded irrigation), increased investment in human capital, and the realization of Afghanistan’s substantial extractives potential.   

    Last Updated: Mar 21, 2019


    Afghanistan became a member of the World Bank in 1955. Shortly after the Soviet invasion in 1979, World Bank operations were suspended, although the Bank continued to provide assistance to Afghans through its office in Pakistan.

    Prior to 1979, the World Bank provided 21 no-interest loans, known as ‘credits’, to Afghanistan across a wide range of areas, including education, roads, and agriculture. Of the original $230 million in credits approved by the International Development Association (IDA), the Bank’s concessionary lending arm, $83 million was disbursed and $147 million was subsequently canceled. Afghanistan repaid $9.2 million to IDA and was up-to-date on debt service payments until June 1992, when it stopped making payments.

    Operations resumed in May 2002 to help meet the immediate needs of the poorest people while assisting the government in developing the administrative systems required for longer-term nationwide development. Aid has since grown tremendously. To date, the World Bank has provided a total of over $4.1 billion for development and emergency reconstruction projects, and six budget support operations in Afghanistan. This support comprises over $3.78 billion in grants and $436.4 million in no-interest loans. As of September 2018, the Bank has 16 active IDA projects in Afghanistan with net commitment value of over $1.6 billion.

    The International Finance Corporation (IFC), the World Bank Group’s private sector development arm, continues to work with its investment and advisory services partners in Afghanistan. IFC’s current cumulative committed investment portfolio stands at over $200 million and its advisory services portfolio stands at $13.9 million. IFC’s investment portfolio includes investments in the telecommunication sector, agribusiness, and financial markets. The investment pipeline looks promising and includes investments in the power and education sectors.

    IFC’s advisory services program has been supporting the investment program in access to finance, strengthening horticulture export, access to renewable energy, corporate governance structure enhancement, and investment climate reform interventions.

    The World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) has $116.5 million of gross exposure for two projects in dairy and cashmere production in Afghanistan.

    The Afghanistan Reconstruction Trust Fund (ARTF) was established in 2002 to provide a coordinated financing mechanism for the Government of Afghanistan’s budget and national investment projects. Since its inception, 34 donors have contributed over $10.6 billion to the ARTF, making it the largest single source of on-budget financing for Afghanistan’s development. 

    The ARTF has a three-tier governance framework (Steering Committee, Management Committee, and Administrator), plus three working groups. This sound framework has enabled the ARTF to adapt to changing circumstances and development priorities with consistency and consensus. The World Bank is the Administrator of the trust fund. The Management Committee consists of the World Bank, Islamic Development Bank, Asian Development Bank, United Nations Development Programme, Ministry of Finance, and the United Nations Assistance Mission in Afghanistan as an observer. 

    Last Updated: Oct 02, 2018

  • The World Bank Group’s assistance to Afghanistan will support the government’s strategic vision and goal to reduce poverty.


    The World Bank Group’s current engagement with Afghanistan is determined by the Country Partnership Framework (CPF), which is closely aligned with the government’s Afghanistan National Peace and Development Framework (ANPDF). 

    The World Bank Group’s support to Afghanistan over 2017-2020 aims to help Afghanistan build strong and accountable institutions to deliver services to its citizens, and to encourage growth of the private sector. The CPF also aims at supporting economic growth that includes all members of society, with a focus on lagging areas, urban informal settlements, and people driven from their homes by conflict. 

    The World Bank Group strategy aims to help Afghanistan:

    • Build strong and accountable institutions to support the government’s state-building objectives and enable the state to fulfil its core mandate to deliver basic services to its citizens, and create an enabling environment for the private sector;
    • Support inclusive growth, with a focus on lagging areas and urban informal settlements; and
    • Deepen social inclusion through improved human development outcomes and reduced vulnerability among the most underprivileged sections of society, including the large numbers of internally displaced persons and returnees.

    Over the CPF period the World Bank expects to provide $250-$300 million in grants annually to Afghanistan through the World Bank Group’s International Development Association, the fund for the poorest countries.  Additionally, the Afghanistan Reconstruction Trust Fund could provide up to $800 million per year in grants, depending on donor commitments. The International Finance Corporation, the World Bank Group’s private sector arm, aims to expand from the current $54 million portfolio to about $80 million. The Multilateral Investment Guarantee Agency, the Bank Group’s political risk insurance arm, stands ready to provide support with a focus on finance, manufacturing, agribusiness, and infrastructure. 

    Last Updated: Oct 02, 2018

  • Selected World Bank Achievements in Afghanistan

    Building Institutions: The Capacity Building for Results (CBR) Facility supports government in developing its internal human capacity, organizational structures, and functions over the medium term to improve service delivery to the population. CBR promotes accountability in line ministries by introducing results-based reform and services improvement programs. CBR is also one of the key tools for the government to reduce reliance on external technical assistance and parallel structures. The grant helps finance the costs associated with (i) technical assistance for preparation and implementation of capacity building programs; (ii) recruitment of some 1,500 managerial, common function, and professional staff for key positions in selected line ministries; (iii) a management internship program; (iv) training of civil servants; and (v) project management, monitoring, and evaluation.

    CBR is demand driven and open to all line ministries and independent agencies. Based on pre-agreed criteria, including service delivery potential and reform readiness, line ministries and agencies are grouped as either Category 1 (high priority) or Category 2.  Of the advertised CBR positions, 929 have been contracted to date, 70 of whom are women (7 percent of contracted positions), with another 348 recruitments at various stages of quality review and approval. CBR is also assisting salary harmonization for donor-funded consultants embedded in or working in support of government.

    Education: The Higher Education Development Project (HEDP) aims to increase access to higher education in Afghanistan, as well as improve its quality and relevance. HEDP uses an Investment Project Financing instrument based on the Results-based Financing modality. Enrollment in key priority disciplines (those that contribute to economic and social development) has increased substantially from 64,200 at the project baseline to about 79,400 this year. The special focus on increasing female enrollment has also paid substantial dividends with female enrollment increasing from 11,400 to approximately 15,000 for the current academic year.

    The Skills Development Program revived two key institutions in Kabul: the National Institute of Management and Administration (NIMA) that prepares young professionals to acquire junior-level jobs in the public and private sectors; and the National Institute of Music that trains gifted young musicians, establishing a nurturing platform for music in the country. Under the Afghanistan Second Skills Development Program, 100 national occupational skills standards have been benchmarked to an international level with the support of an international certification agency, and corresponding curricula developed for 15 trades.

    The project is financing an academic partnership contract with Pune University in India to enable 20 faculty members from NIMA to undertake master’s degree courses. A series of memorandum of understanding is also being finalized with other host institutions in India to provide one-year diploma courses in specific trades to some 75 technical and vocational education and training (TVET) teachers selected through a competitive process. In addition, over 522 TVET graduates have been supported with scholarships through a voucher program, which facilitates further professional studies for meritorious students who have graduated from TVET institutes. 

    Financial Sector: The Access to Finance Project aims to build institutional capacity to improve access to credit of micro, small, and medium enterprises. The Microfinance Investment Support Facility for Afghanistan (MISFA) has initiated a series of activities, in particular the scaling up of the Targeting the Ultra Poor (TUP) program. The TUP program has been completed in four provinces (Balkh, Kunar, Laghman, and Takhar) and is ongoing in two more provinces (Kabul and Kandahar). A project restructuring is being initiated to extend the TUP program to two more provinces and to engage on important topics, including digital financial services.

    Health: Bringing most of the efforts in public health service delivery under one umbrella in Afghanistan, the Sehatmandi (Health) Project aims to increase the utilization and quality of health, nutrition, and family planning services across Afghanistan. The project supports implementation of a Basic Package of Health Services and an Essential Package of Hospital Services through contracting arrangements across the country. Sehatmandi also supports efforts to strengthen the capacity of the Ministry of Public Health at central and provincial levels to effectively carry out its stewardship functions.

    Health indicators saw an improvement with the support of the System Enhancement for Health Action in Transition Program, the precursor of the Sehatmandi Project. For example, the newborn mortality rate fell 32 percent from 53 to 36 per 1,000 live births from 2000 to 2015; the number of functioning health facilities increased from 496 in 2002 to more than 2,800 in 2018, while the proportion of facilities with female staff increased; and births attended by skilled health personnel among the lowest income quintile increased from 15.6 percent to 50.5 percent.

    Horticulture and Livestock: The ARTF supported the National Horticulture and Livestock Project to promote the adoption of improved technologies by target farmers in the horticultural sector and to support the livestock sector, with gradual rollout of farmer-centric agricultural services systems and investment support. The project has financed the establishment of 16,750 hectares (ha) of new pistachio and fruit orchards in 32 provinces. In addition, over 90,000 ha of existing orchards have been rehabilitated and some 96,000 kitchen gardening schemes established.

    Horticulture in Afghanistan
    The project has also supported construction of 1,037 small water harvesting structures, improving farmers’ resilience to weather changes by allowing harvest and storage of water during the rainy season and gradual release in the growing period based on crop needs. A total of 997 raisin drying houses has been constructed on a cost-sharing basis to reduce post-harvest losses of grapes and improve the quality of raisins produced.

    Regarding livestock activities, NHLP continues to focus on key activities, including poultry production and animal health and extension services, while expanding work programs to other areas such as fishery and dairy. To date, the project has supported 122,840 farmers (78,968 women and 43,872 men), clustering them into producers’ groups to benefit from animal production and health services.

    Irrigation: With over 85 percent of rural population relying on agriculture, irrigation remains a pressing need in rural Afghanistan. The Irrigation Restoration and Development Project (IRDP) envisages support to rehabilitate irrigation systems serving some 215,000 hectares of land and for the design of a limited number of small multi-purpose dams and related works, while establishing hydro-meteorological facilities and services. In the irrigation component, a total of 181 irrigation schemes has been rehabilitated, covering over 190,000 hectares of irrigation command area (compared to the end project target of 215,000 hectares and over 402,000 farmer households).

    In the small dam component, a pre-feasibility review of 22 small dams resulted in a feasibility study being conducted on the six best ranked dams in the northern river basin (which is not on international rivers). In the hydro-met component, installation of 127 hydrological stations and 56 snow and meteorological stations located in various locations on the five river basins in the country is ongoing. In addition, 40 cableway stations for flow measurement at selected hydrology stations have been installed.

    The Afghanistan On-Farm Water Management Project aims to improve agricultural productivity in project areas by enhancing the efficiency of water use. To date, land productivity of wheat and other crops has increased by 15–20 percent. Water productivity of wheat and other crops increased 15 percent, and the irrigated area increased by 20 percent. Physical rehabilitation of irrigation schemes exceeded its target with good quality and within the project budget allocation and timeline: 207 irrigation schemes (mostly informal) have been rehabilitated, covering a total of 52,000 hectares of irrigation command area.

    Rural Development: Improving access to basic services and facilities through secondary and tertiary roads, the Afghanistan Rural Access Project will increase the number of people living within two kilometers (km) of feeder roads and reduce travel time to essential services. To date, more than 2,000 km of rural roads and related drainage structures have been upgraded or rehabilitated through four projects under these programs financed through IDA, ARTF, and other funds.

    Rural Enterprise: Since its inception, the Afghanistan Rural Enterprise Development Project (AREDP) has established 5,450 Savings Groups with a membership of some 61,460 rural poor (54 percent women) in 694 villages. The SGs have saved over $5.56 million and members have accessed more than 52,450 internal loans (65 percent by female members) for productive and emergency purposes with a repayment rate of 95 percent.

    To generate economies of scale, 524 Village Savings and Loan Associations (VSLAs) have been established as federations of the SGs. The VSLAs maintain accurate and up-to-date records of accounts with a good governance structure in place. On average, each VSLA has $4,335 as loanable capital, which is further boosted with a seed grant injection. This improves access to finance for group members who would like to increase productivity or engage in entrepreneurial activities but cannot access such funds from commercial banks or microfinance institutions.

    AREDP also works toward strengthening market linkages and value chains for rural enterprises by providing technical support to 1,338 Enterprise Groups (63 percent female) and 657 small and medium enterprises (15 percent female) that have been selected for their potential as key drivers of rural employment and income generation.

    Social Service Delivery: The Citizens’ Charter Afghanistan Project (Citizens’ Charter) is the successor to the highly successful National Solidarity Programme (NSP), which introduced a community-driven development approach toward rural infrastructure and service delivery and reached about 35,000 communities over 14 years. The Citizens’ Charter supports the first phase of the Government of Afghanistan’s 10-year Citizens’ Charter National Program and will target one-third of the country. The Citizens’ Charter aims to improve the delivery of core infrastructure and social services to participating communities through strengthened Community Development Councils (CDCs). These services are part of a minimum service standards package that the government is committed to delivering to the citizens of Afghanistan. 

    Implementation progress includes:

    In rural areas: Over 8,400 community profiles (CPs) completed; more than 8,150 new CDCs elected; over 6,900 Community Development Plans (CDPs) completed; and more than 5,700 sub-project proposals prepared.

    In urban areas: Implementation has been rolled out in over 666 communities. A total of 633 CPs completed; 633 CDCs elected; 592 CDPs completed; and 509 sub-project proposals approved.

    Results expected under the first phase of the Citizens’ Charter include: (i) 10 million Afghans reached; (ii) 3.4 million people gaining access to clean drinking water; (iii) improvements to quality of service delivery in health, education, rural roads, and electrification; (iv) increase in citizen satisfaction and trust in government; and (v) 35 percent return on investment for infrastructure projects.

    Last Updated: Oct 02, 2018



Afghanistan: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments



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In Depth


Country Update October 2018 - The World Bank Group in Afghanistan

Summarizes the World Bank Group and Afghanistan Reconstruction Trust Fund (ARTF)’s ongoing operations aimed at development in various sectors and job creation in Afghanistan.


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Afghanistan’s achievements in the last years have been impressive in many ways. The coming years will be critical to strengthening Afghan institutions’ ability to deliver basic services nationally and consolidate and ...


Afghanistan Development Update

Economic growth in Afghanistan has slowly regained momentum as reforms have been implemented and confidence restored: From a low of 1.5 percent in 2015, real GDP growth accelerated to 2.3 percent in 2016, and reached 2.7 ...


Open Data on Afghanistan

The World Bank provides free and open access to a comprehensive set of data about development in countries around the globe, including Afghanistan.

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