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Afghanistan and World Bank sign USD 12.5mn agreement on improving public pension schemes

in Afghan Business

Afghanistan and World Bank sign USD 12.5mn agreement on improving public pension schemes

world bankThe Afghan government signed a USD 12.5mn agreement with the World Bank on continuation of a project to provide safety nets to the country’s poorest people and improve the public pension schemes.

“Reforming and upgrading the social safety and pension administration is important for providing the disadvantaged and retired with assistance.‘We thank the World Bank for providing the necessary support in helping us lay the foundations for a modern system to identify and deliver services to the eligible,” said Afghan Finance Minister Hazrat Omar Zakhilwal.

The 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.

Amina Afzali, the minister in charge of the department, said: ‘A huge number of public sector retirees as well as the disabled and families of martyrs direly need financial aid from the government to survive.

‘With funding from the World Bank, we’ve been able to design and deliver public pension schemes and safety nets programs to a good portion of these people. The new funding will enable us to reach out to more such vulnerable families across the country.’

Within the ‘safety net’, government and donors target various population groups through cash and in-kind benefit programmes and also provide social care services and skills development.

World Bank country director for Afghanistan Robert Saum said: ‘This additional funding will enable the Afghan government to build on the good work it has started in implementing pension reforms and institutionalising its safety net programmes.

‘Key reforms such as rolling out management information systems and effective financial management will ensure that eligible beneficiaries are identified and necessary services efficiently delivered to over 10,000 poorest families of this country, making them hopeful for a better future.’

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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