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The North West Substation in Kabul. Photo: © Sofie Tesson / TAIMANI FILMS / WORLD BANK.

Expert Note

Afghanistan's aid requirements: How much aid is required to sustain a stable state?

This Expert note considers what effects changes in levels of donor support might have on the capacity of the Afghan state to operate effectively.

Published: 12 October 2020

Authors: Tobias Haque

Key messages:

  • Afghanistan is exceptionally dependent on donor grants. In 2018 these amounted to at least $8.6 billion, almost 80% of all public expenditures. Donor have indicated that they are not prepared to sustain this level of external financing. State functionality can be preserved if donor grants are reduced to some $6.6 billion per annum by 2025/6, however - provided the cuts are properly targeted.
  • Donor financial support for security - overwhelmingly a US preserve - could be reduced from $4.8 billion in 2018 to $3.6 billion by 2025/26, and developmental/humanitarian assistance from $3.8 billion in 2018 to $3 billion by 2025/26.
  • Most aid reductions should come from off-budget donor programmes, which account for nearly 70 percent of all donor contributions. Off-budget spending offers less value for money than on-budget spending, and has been more prone to wastage and corruption. To convince donors to move a greater proportion of funding on-budget, though, the Government needs to raise its delivery game and address predatory corruption more convincingly.

There is an accompanying blog that focuses on donor action points - read it here.

About the authors

Tobias Haque

World Bank Lead Economist for Afghanistan

Tobias Haque is the World Bank’s Lead Economist for Afghanistan.