KABUL (Pajhwok): The European Union (EU) announced on Tuesday giving Afghanistan 2.9 million euros in grant for debt relief. The grant aimed to help Afghanistan live up to its commitments and achieve Sustainable Development Goals, the EU said in a statement.
It said the ongoing coronavirus pandemic had resulted in severe health, social and economic consequences around the world, including Afghanistan. Many developing countries, where debt levels were already high before the crisis erupted, are now at risk of becoming unsustainable.
The EU statement said: “Afghanistan has to cope with sharply declining revenue as a consequence of the crisis, driven by restrictions on economic activity and trade. “Tax revenue (in Afghanistan) dropped by 40 percent in April–May 2020 while the expenditure burden for health and other social services increased.”
The EU noted the Afghan government had successfully managed to borrow considerable amounts in highly concessional loans from the IMF to cover its fiscal deficit during the crisis. It added although Afghanistan’s debt level remained low, its current revenue position had increased vulnerability. EU Chargé d’ Affaires Arnout Pauwels meanwhile said: “Today’s announcement is good news for Afghanistan, as this additional funding will free space to increase the social, health and economic spending in response to the COVID-19 crisis.”
