World Bank approves USD 12.5mn additional financing to improve Afghanistan’s Pension Scheme
The World Bank approved an additional grant of USD 12.5mn aimed at financing the continuation of a project to provide safety nets to the country’s poorest people and improve the public pension schemes.
The aid comes from the International Development Association (IDA). The additional financing will help the Afghan Ministry of Labor, Social Affairs, Martyrs and Disabled scale up and expand the progress made to date.
The Safety Nets and Pensions Support Project started in 2009 to improve the administration of the public pension schemes and pilot a modest program to provide a social safety net to the most vulnerable people. The project has made steady and encouraging progress. The Pension Department’s institutional and human resources structure has been reformed and the key elements of a modernized administration have been put in place. Over the past two years, more than 16,000 of the poorest families and close to 80,000 individuals have received cash assistance.
“Afghanistan has made promising progress in building institutional systems to better administer its pension schemes,” said Robert Saum, World Bank Country Director for Afghanistan. “The Government’s efforts to identify and assist the poorest families in difficult winter times are equally commendable. We are happy to continue supporting Afghanistan’s efforts to manage its social safety net programs more efficiently, so that poor people can better withstand economic and weather-related hardships and benefit from economic growth.”
The Government’s Afghanistan National Development Strategy (ANDS) and National Priority Programs (NPPs) include a Social Protection Strategy. The planning and budgetary framework is increasingly pro-poor and includes mapping of pro-poor expenditures. The formal social protection system comprises of a safety net and pension scheme for public sector workers. Within the safety net, government and donors target various population groups through a number of unconditional and conditional cash and in-kind benefit programs. They also provide social care services and skills development programs. In addition to the government- run programs, there are other programs run by international donors and NGOs which are mainly cash or food-for-work schemes, primarily in rural areas.
The project is expected to be completed by 30 June 2016. Specifically, the additional financing will support:
- Completion of building renovations and the rollout of the Management Information System (MIS) of the Public Pension scheme;
- Scaling up the administrative reform of the pension system to expand coverage to the Martyrs and Disabled Pension Program (MDPP);
- Expansion of the cash transfer interventions to another 10,000 – 12,000 poor families (nearly 60,000 individuals), while continuing to improve processes for effective targeting and payment delivery. This will support developing the administrative systems of the Afghanistan Social Protection Program (ASPP) before any major scale up.
- Building institutional capacity of the Ministry of Labor, Social Affairs, Martyrs and Disabled to manage and implement the pension reforms and safety net policy and interventions.
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