UN sets up Special Trust fund for Afghanistan

The United Nations has set up a special trust fund on October 21, 2021 for Afghanistan, in order to provide urgently needed cash directly to Afghans.


  • This special trust fund was set up through a system by tapping into donor funds which was frozen since the Taliban takeover in August 2021.
  • It was set up with the aim of injecting liquidity into Afghan households in a bid to permit them to survive the upcoming winter and remain in their homeland.
  • Germany is a first contributor to the fund. It had pledged 50 million euros ($58 million) for it. Germany was also in touch with other donors to mobilise the resources.

Why this fund was created?

According to United Nations Development Programme (UNDP), about 97% of Afghan households might be living below the poverty line by mid-2022. Thus, fund was set up to stabilise people’s economy and save their lives & livelihood.

Economy of Afghanistan

As per International Monetary Fund (IMF), economy of Afghanistan was set to contract up to 30% in the year 2021. It will further fuel the refugee crisis which will also be affecting neighbouring countries like Turkey and Europe.

Economic impact of Taliban’s takeover

As the Taliban took over Afghanistan, billions of the assets in central bank got frozen and several international financial institutions suspend their access to funds. Though humanitarian aid continued. As a result of this, banks in Afghanistan are running out of money, food prices have increased and civil servants have not been paid.




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