With the Taliban taking over Afghanistan, financial experts are looking closely at the already fragile cash economy of the country to raise new fears. Even before the Taliban rule, the economy of Afghanistan has been struggling. According to the World Bank, the economy of the country is “shaped by fragility and aid dependency,” with 75 per cent of government expenditure financed from grants.

This aid is already set for a 20% decrease from 2016 to 2020 after the 2020 Afghanistan Conference “some major donors made only one year pledges,” and “future aid depends on the government accelerating its efforts in battling corruption, reducing poverty and pushing for peace talks,” the World Bank said.

According to Bloomberg, the Afghan currency has dropped to lows. On Thursday, the Afghan United Bank, which published Afghani exchange rates regularly on Facebook, came to an end. One day earlier, Afghan central bank acting governor Ajmal Ahmady tweeted his flight from Afghanistan.

All this occurred after a rush was reported on local cash withdrawals and Western Union announced that it had “sufficiently stopped” cash transfers to Afghanistan. Speaker Rachel Rogala of Western Union referred to the tweet of the company and declined any further comment. MoneyGram seems to have stopped its services, too and has not reacted to a comment request.

In April 2021, the World Bank declared: “The economic and development prospects in Afghanistan are extremely uncertain,” adding that the “market for domestic debt is not in Afghanistan and the challenges of debt sustainability restrict future foreign debt.”

A United Nations report in June stated that the Talibans have largely illegally financed themselves: ‘Primary resources of Taliban funding continue to cover criminal activity such as drug trafficking and the production of opium pawns, extrusion, ransom abduction, mineral exploitation and tax collection income in areas controlled or influenced by Taliban.’