The International Monetary Fund on Monday said Afghanistan was making progress on structural reforms but needs to speed up resolution of the Kabul Bank, at the heart of a corruption scandal.
The head of an IMF mission that wound up Kabul talks with Afghan authorities on Sunday, Paul Ross, said the economic outlook was “broadly positive,” with growth projected at 11 percent this year.
Ross and his team completed the second review of Kabul’s progress supported by a $133.6 million loan granted to the war-torn country in November 2011.
In June, the IMF released $18.2 million under the loan program after a largely positive first review.
Ross said Kabul had made headway in implementing structural reforms to strengthen the financial sector, mobilize domestic revenue, and improve governance.
But he called for swifter action in two financial sector reforms: improvement of the tax to gross domestic product ratio in 2013, and the strengthening of the financial sector and its governance, against the background of the Kabul Bank crisis.
“There was agreement on the need to expedite work to complete the submission of the new banking law to parliament,” Ross said.
“The authorities stated their commitment to continuing Kabul Bank’s asset recovery efforts and complete its resolution quickly,” he said.
The original IMF loan had been held up for a year as foreign donors and the Fund pressed the government to deal with the massive Kabul Bank scandal, in which nearly $1 billion were lost in a scheme involving many powerful Afghan businessmen and officials.
The bank, once Afghanistan’s largest, had to be taken over by the central bank in late 2010 amid accusations that powerful former executives siphoned off more than $900 million, some of which was used to buy luxury properties in Dubai.
Ross said the IMF team would continue its talks with Afghan authorities in the coming weeks.
IMF says Afghanistan makes progress on reforms
