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IMF approves disbursement after first review of Afghan program
June 29, 2012 / 9:21 PM / 5 years ago

IMF approves disbursement after first review of Afghan program

WASHINGTON (Reuters) - The International Monetary Fund on Friday approved an $18.2 million disbursement to Afghanistan following the first performance review of the country’s new loan program.

The IMF suspended the Afghan program in 2010 after reports of corruption, bad loans and mismanagement at Kabulbank, forcing the central bank to rake over the major lender. A new loan program was renegotiated in November 2011.

The IMF has demanded that some of the assets of Kabulbank be recovered from shareholders, which include Afghanistan’s elite including sitting ministers and an ex-warlord.

IMF Deputy Managing Director Nemat Shafik said no shareholder of Kabulbank had repaid the authorities in full and their cases had been referred to a special court.

She said the IMF program would focus on strengthening the financial sector and building economic governance, while improving the country’s finances.

“While progress has been made on all these fronts, strong government ownership of the program remains crucial to resist opposition from vested interests,” Shafik added.

Reporting By Lesley Wroughton; editing by Sandra Maler and Todd Eastham

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