2021 Afghanistan Incentive Program Development Policy Grant

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The development objectives of the 2021 Incentive Program Development Policy Grant in Afghanistan are: (i) supporting sustainability, inclusivity, and transparency in public finances and the civil service; and (ii) strengthening the institutional and regulatory framework to support recovery from COVID-19 through management of risks and improved governance. Under the first pillar, supporting sustainability, transparency, and inclusivity in the civil service and public finances, the operation supports reforms to: (i) address major weakness in public expenditure management and revenue that pose important threats to long-term fiscal sustainability; and (ii) reduce corruption and address sexual harassment in the public sector. Under the second pillar, strengthening the institutional and regulatory framework to support recovery from COVID-19 through management of risks and improved governance, the operation supports reforms to help manage fiscal and financial sector risks through improved oversight, governance, and financial management of critical institutions, including state-owned commercial banks, the electricity utility, and the oil and gas sector regulator. Reforms are expected to indirectly facilitate private sector development through addressing the institutional, governance, and fiscal sustainability risks that are currently constraining investment.