Aid to Afghanistan, Malawi suspended on IMF decision

13 June 2011

International donors, including US Agency for International Development and UK Department for International Development, have halted aid to Afghanistan following the IMF’s suspension of funds in February. The IMF decision was based on reports of corruption and insolvency at Kabul Bank, but in February the Afghan Ministry of Finance blamed “ineffective” international technical support for exacerbating the crisis. In May, the World Bank decided to hold back $40 million in loans to Malawi because the country had not completed a second review of its performance regarding its IMF package. Funding cuts from other donors followed the suspension, which caused foreign donors’ contributions to its national budget to drop from 30 to 13 per cent.