Aid funding in Afghanistan reaches its goal as relief needs increase while the United Nations warns that the country’s banking and financial systems are on the brink of collapse, a UN has spokesman said.
“Non-performing loans in the credit market have increased from around 30 percent at the end of 2020 to 57 percent in September of this year,” said Stephane Dujarric, the chief spokesman for UN Secretary-General Antonio Guterres, citing a UN Development Programme (UNDP) report.
As the run on banks to withdraw savings continues, UNDP projects that the deposits’ base would shrink by as much as 40 percent by the end of the year, Xinhua news agency quoted Dujarric as saying.
Indicators in the report serve as a warning that the Afghan banking and financial systems are on the brink of collapse, he said. The document also outlines a series of solutions to the crisis, which include deposit insurance, adequate liquidity for the banking system and credit guarantees and loan repayment delay options for the real economy.
The UN Office for the Coordination of Humanitarian Affairs said the humanitarian response in Afghanistan is scaling up with improved funding and access to life-saving aid. But the needs and vulnerabilities are increasing and outpacing the capacity of humanitarians to reach people in crisis.
The Afghanistan flash appeal is fully funded, Dujarric said.
It had sought $606 million to help 11 million people most in need in the last four months of the year.
“We are grateful for the generous contributions of the donor community,” he said.
“However, all financial commitments have not been translated into actions on the ground, due to financial system challenges amid the cash and liquidity crisis.”
The spokesman said half of the people do not know where they can get their next meal. One in four pregnant women and one in two children are malnourished.
From September 1 to mid-November, UN partners and non-governmental organisations provided 7.2 million people with food assistance. They reached more than 880,000 people with primary and secondary health care consultations, assisted almost 199,000 drought-affected people through water trucking and treated more than 178,000 children under 5 for acute malnutrition, he said.