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Islamic Republic of AfghanistanMinistry of Finance
Donor Financial Review
Reort 1388November, 2009
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DONOR FINANCIAL REVIEW I
ACKNOWLEDGEMENT
On behalf of the citizens of the Islamic Republic of Afghanistan, it is a pleasure to
present the report of 1388 Donor Financial Review (DFR). The 1388 DFR report
represents tangible evidence of the strong partnership between Afghanistan and our
development partners in reconstruction and development of Afghanistan which is
based on the principals of the Paris Declaration on Aid Effectiveness. It also provides a
vital tool for the Government of Afghanistan and our development partners on the
measurement of the effectiveness of development assistance, national budget
planning process and the implementation of the Afghanistan National Development
Strategy.
Experience has shown that increased information sharing serves the interest of the
entire international community – not only Afghanistan. Development assistance iseffective when we work together on the basis of the five principals of Paris Declaration
on Aid Effectiveness: Ownership; Alignment; Harmonization; Managing for Results; and
Mutual Accountability.
During the past seven years, development assistance equaling to USD 35 billion has
been provided to Afghanistan. The DFR report is part of the Afghan Government’s long-
term commitment to its citizens and to the international community to increase and
improve public awareness in both Afghanistan and in our development partners’
homelands of the results of development assistance.
It is also a critical tool for both the Government and our development partners to
accurately assess and forecast levels of official development assistance; successfully
implement the ANDS; and, it provides crucial data for the Medium Term Fiscal
Framework (MTFF), a tool developed by the Government of Afghanistan to provide a
medium term rolling forecast of the interaction between government spending and
revenues and the wider economy. Therefore, provision of information to government
through DFR is very necessary for the implementation of ANDS and update of MTFF.
In closing, the Government of the Islamic Republic of Afghanistan wishes to take this
moment to express its continued appreciation to the international community working
in Afghanistan for the strong and consistent support that has been provided for the
reconstruction and development of Afghanistan. We are also thankful to UNDP for its
technical and financial support for this DFR report. We look forward to continuing our
collaborative work with our distinguished development partners in the international
community, and we welcome the comments and discussion that this important
document will allow.
Sincerely,
Dr. Omar ZakhailwalMinister of Finance & Senior Economic Advisor to President
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DONOR FINANCIAL REVIEWII
CONTENTS
ACKNOWLEDGEMENT I
ACRONYMS V EXECUTIVE SUMMARY 1 INTRODUCTION 3 DONOR FINANCIAL REVIEW (DFR) 5
2.1. Objectives of Donor Financial Review ............................................ 5
2.2. Online Development Assistance Database (DAD) ........................... 6
OVERVIEW OF OFFICIAL DEVELOPMENT ASSISTANCE TO AFGHANISTAN (1380-1388) 9
3.1. Pledges, Commitments & Disbursements ....................................... 9
3.2. Rate of Aid Disbursement ............................................................. 11
3.3. Aid Investment in Afghanistan: Identified Trends .......................... 12
3.3.1. Geographic Distribution ......................................................... 12
3.3.2. Aid Investment by Sector ....................................................... 13
AID DELIVERY CHANNELS AND MODALITIES 15
4.1. Delivery Channels ......................................................................... 15
4.2.1. Delivery through Military Channels ..................................... 15
4.2.2. Delivery through Non-Military Channels ............................. 15
4.2. Aid Delivery Modalities ................................................................. 16
4.2.1. Budget Implementation Directly Managed by Donors .......... 16
4.2.2. Afghan Government Managed Budget and Implementation 16
4.2.3. Trust Funds ............................................................................ 17
4.3. Analysis of the Effectiveness of Existing Modalities ....................... 18
4.3.1. Directly Donor Managed ........................................................ 18
4.3.2. Afghan Government Managed .............................................. 19
4.3.2.1. Trust Funds ............................................................ 22
OVERVIEW OF OFFICIAL DEVELOPMENT ASSISTANCE IN 1387 AND 1388 25
5.1. Commitments and Disbursements ................................................ 25
5.2. Donor Investments by Sector ........................................................ 25
5.3. Investment by Channels and Modalities of Delivery ...................... 26
5.4. Highlighting Achievements ........................................................... 26
PERSPECTIVES ON DONOR ASSISTANCE IN AFGHANISTAN 29
6.1. Commitments and Disbursements ................................................ 29
6.2. ANDS Financing Gap ..................................................................... 31
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DONOR FINANCIAL REVIEW III
RECOMMENDATIONS 33
7.1. Information sharing ...................................................................... 33
7.2. Disbursement channel .................................................................. 337.3. ANDS financing mechanism .......................................................... 34
7.3.1. PEER REVIEW ......................................................................... 34
7.3. Corruption .................................................................................... 34
7.4. Capacity Building in the Operationalization of ANDS ..................... 34
7.5. Specificity of information in the security sector ............................. 35
ANNEXES .......................................................................................................... 37
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DONOR FINANCIAL REVIEW V
ACRONYMS
ANDS Afghanistan National Development Strategy
ADB Asian Development Bank
AFMIS Afghanistan Financial Management Information System
AMD Aid Management Directorate
ARTF Afghanistan Reconstruction Trust Fund
ANSF Afghanistan National Security Forces
ANA Afghanistan National Army
ANP Afghan National Police
CERP Commanders Emergency Response Program
CNTF Counter Narcotics Trust FundCSTC-A Combined Security Transitional Command Afghanistan
DFR Donor Financial Review
DAD Development Assistance Database
DAC Development Assistance Committee
DFID Department for International Development
EC European Commission
EU European Union
FCO Foreign Commonwealth Office
FY Fiscal Year
GIS Geographic Information SystemIDB Islamic Development Bank
IFI International Financial Institution
LOTFA Law and Order Trust Fund for Afghanistan
MTFF Medium Term Fiscal Framework
MoF Ministry of Finance
NATO North Atlantic Treaty Organization
ODA Official Development Assistance
OECD Organization for Economic Cooperation and Development
PFM Public Finance Management
PIU Project Implementation UnitPRT Provincial Reconstruction Team
SIGAR Special Inspector General for Afghanistan Reconstruction
SY Solar Year
USAID United States Agency for International Development
UN United Nations
UNAMA United Nation Assistance Mission for Afghanistan
UK United Kingdom
UAE United Arab Emirates
USA United States of America
UNDP United Nation Development ProgramWB World Bank
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DONOR FINANCIAL REVIEW 1
EXECUTIVE SUMMARY
The international community has provided USD 1241 per Afghan citizen in
assistance since the year 2001. The people of Afghanistan are grateful to
the international community for what has been achieved since 2001 which
would not have been possible without this generous international
assistance. The assistance provided to date has been given to help turn the
30-year war torn Afghanistan into a peaceful country with a strengthened
national army and police force, governed by a democratically led
government with a legally based, market driven economy.
Since 2001 the international community has pledged to provide USD 62billion in assistance (grants and loans) to Afghanistan. Fifty-five percent of
this amount was announced in the international conferences on
Afghanistan (Tokyo, Berlin, London, Rome and Paris). At the time of this
Donor Financial Review (DFR), the Ministry of Finance has determined that
USD 46 billion (75.8% of USD 60.7 billion) has been allocated to specific
projects and activities, while the amount actually spent is closer to USD 36
billion.
To achieve a balanced growth in all areas, sectors have been identified
where the assistance is to be prioritized. The Government of Afghanistan’sfirst priority, the security sector, has been the largest recipient of
assistance. USD 19 billion, or more than 50% of the total assistance
disbursed, has been spent to strengthen the Afghan National Army and
Police Forces. The Ministry has included this spending in this DFR report
knowing that there is currently insufficient data about how this assistance
is specifically spent to determine what portion of this assistance can be
classified as ODA according to the Organization for Economic Cooperation
and Development (OECD) standard. Following Security, Infrastructure and
Agriculture & Rural Development sectors have been the largest recipient of
assistance.
The method and channel used to deliver the assistance are as important as
the volume and prioritization of the assistance as these affect the final and
intended impact. Based on available information, 77% (USD 29 billion) of
the USD 36 billion has been disbursed on projects and programs designed
and implemented by the donors themselves with little or no input by the
Government of Afghanistan. The remaining development assistance (USD
8.7 billion) has been delivered directly through the treasury of the
Government of Afghanistan using the national budget, but of this amount,only USD 770 million has been placed fully at the discretion of the
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DONOR FINANCIAL REVIEW2
Government of Afghanistan to determine where it will be allocated and
spent
During the years 1387 and 1388 donors have officially committed USD
10.72 billion of which USD 7.41 (69%) billion has already been disbursed. Of
the 10.72 billion, the spending of USD 8.5 billion or 79% has been
controlled and managed directly by donors, while the national treasury of
the Government of Afghanistan received only USD 2.25 billion or 21
percent.
DFR continues to provide the Government and the international
community with an important tool to understand the current and future
levels of assistance coming to Afghanistan. After the Afghan NationalDevelopment Strategy (ANDS) was finalized and presented to the
international community at the Paris Conference, the international
community reaffirmed its commitment to assist the Government of
Afghanistan to implement the ANDS. Being heavily dependent on foreign
assistance for the implementation of ANDS, it is crucial that the
Government of Afghanistan be able to predict the level of upcoming
assistance to Afghanistan despite the difficulty of this task.
The influx of assistance is hoped to continue. However, the Government of Afghanistan is concerned that the levels of assistance spent outside the
government system remain large because it limits government ownership.
Development aid is only effective when there is close consultation between
donors and the recipient government, and there is a strong focus on
strengthening development capacity of the government to build its internal
institutional capacity to manage and implement its development. The
Government looks forward to continuing to enhance its partnership with
the international community in the coming months.
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DONOR FINANCIAL REVIEW 3
INTRODUCTION
The people of the Islamic Republic of Afghanistan are grateful to the
international community for its generous assistance for the reconstruction
and development of Afghanistan. The unwavering support of Afghanistan’s
international development partners has been and continues to be a vital
support as Afghanistan rises from the ashes of thirty-years of conflict. During
the past seven years the international community has generously committed
to provide Afghanistan a total of USD 46 billion in assistance of which more
than USD 35 billion was delivered by first quarter of Solar Year 1388 which
includes support for development and empowerment of the Afghan National
Security Forces of different kinds such as grants, loan and in kind.
As Afghanistan reflects on the past seven years there are many positive
achievements; for the first time in thirty-years Afghanistan had the
opportunity to elect their President and Members of Parliament, there has
been tremendous improvements in infrastructure sector; about 4000
kilometers of road have been rehabilitated or newly paved,
telecommunication has boosted and today more than 73% of population have
access to telecommunication services; and thousands of new and refurbished
schools and health facilities have been constructed and approximately six
million children have access to primary education.
Similarly, other sectors have also benefited from development assistance in
the past seven years. Given the Government’s limited domestic revenue
during this period, these achievements would have not been accomplished
without the generous assistance and strong partnership of our development
partners. Our development partners have played and continue to play a vital
role in the reconstruction and development of Afghanistan.
Understanding its geographical significance in the international community’s
effort to prevent global terrorism, Afghanistan is committed to establishing asecure and stable nation and it understands that it faces unique challenges
toward its successful development including issues related to security and
narcotics. And, despite significant progress, Afghanistan continues to be a
country highly dependent on foreign aid. Currently the Government is only
able to finance around 64% of its operating expenditures from domestic
revenue (1388 mid year budget review). For development expenditures, it is
completely dependent on the support of its international development
partners. The Government understands that it will require the long-term
assistance of its development partners to become a secure and economicallyvibrant participant in the international community.
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DONOR FINANCIAL REVIEW4
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It is noteworthy that when compared to the per capita aid in other post-
conflict countries, Afghanistan has received less assistance than other post-
conflict nations such as Iraq and Bosnia. It is the Government’s belief that the
level of assistance, particularly the development assistance, be increased to a
level greater or similar to other post conflict countries.
Chart 1: Per Capita Aid in first five years of post-conflict
However, it is not enough to increase the levels of external assistance. The
effectiveness of the assistance must also be dramatically increased. The first
priority of Afghanistan in the area of aid effectiveness is the alignment of
external assistance with the country’s national priorities as defined in the
Afghan National Development Strategy (ANDS). While perhaps beneficial to
Afghanistan, about 80% of assistance (based on commitment) to Afghanistan in
the past seven years has bypassed the Government of Afghanistan and has
been invested in activities that were not or are not very aligned with national
priorities.
Afghanistan and its international development partners share the same
objective - high results from use of development assistance. In order to achieve
this common objective Afghanistan and
its development partners need to focus
on aid effectiveness and use the
modalities for the delivery of assistance
that are both cost effective and produce
sustainable results.
Mutual accountability and
transparency are the major
principles of aid effectiveness
and must be respected by both
the providers and the recipientsof development assistance.
$1,528
$585
$292
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Country
Iraq
Bosnia
Afghanistan
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DONOR FINANCIAL REVIEW 5
Donor Financial Review (DFR)
2.1. Objectives of Donor Financial Review
Initiated in 1385, the DFR is a semi-annual exercise that helps the people
and Government of Afghanistan and the international community in
Afghanistan to have a comprehensive picture of the development
assistance that flows to the country. The DFR is also an important input for
the formulation of the Afghan national budget and the implementation of
ANDS. Specifically, the DFR is a tool to:
1. Build strong cooperative ties between GoA & its development
partners;
2. Enhance mutual accountability and transparency;
3. Assist the Government in defining its spending priorities.
The first round of the 1388 DFR started with one-on-one meetings with 34
development partners and was completed by June 15, 2009. Three major
items were discussed during these meetings:
1. Updated disbursement for the SY1387 and SY1388
2. Updated commitment for SY 1388 and planned commitment for
SY1389
3. Predictability of assistance over the medium to long-term
During the one-on-one meetings, the discussion was limited to the three
items listed above, and a general discussion of the requirements for data
and relevant formats. We have agreed on the end of June as a deadline for
submission of data. However, most of the development partners were
unable to provide their data by the agreed deadline, the deadline wasextended until August 5. It is important to acknowledge that there is an
increasing trend of compliance with the DFR in this round compared to
SY1387. The analysis in this report is based on the information provided to
Ministry of Finance as of August, 2009 from our development partners. The
conclusions drawn in this report are based on those submissions.
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DONOR FINANCIAL REVIEW6
Table 1: Status of Donors’ Reporting for 1388 DFR
No. Complete DataSubmitted*
No. Data PartiallySubmitted**
No. Poor/no dataSubmitted***
1 EU/EC 16 USA 30 UAE
2 World Bank 17 Japan 31 Finland
3 ADB 18 UK 32 China
4 Norway 19 Iran 33 Lithuania
5 France 20 IDB 34 Republic of Korea
6 India 21 Turkey
7 Germany 22 Spain
8 Canada 23 Czech Republic
9 Sweden 24 Estonia
10 Netherlands 25 Hungary
11 Poland 26 Belgium
12 UN Agencies 27 Australia
13 AKDN 28 Italy
14 Switzerland 29 New-Zealand
15 Denmark
* All requested data provided: project – wise disbursement & commitment and
estimates of future assistant
** At least one item of the requested data is not provided
*** No data is submitted or very poor data is submitted
2.2. Online Development Assistance Database (DAD)
With support from UNDP, DAD was initially developed in 2002 to track the
flow of international assistance to Afghanistan. The system has been
modified several times to match the requirements of Government of
Afghanistan in the areas of aid coordination and effectiveness, particularly
the needs of national budget. In the year 1388 DAD was upgraded to a
secure web-based database and several applications such as projecttracking, grant and loan management system and reports were enhanced.
The current system which is GIS enabled is accessed through:
http://dadafghanistan.gov.af.
One of the major reasons for a secure, web-enabled DAD was to enhance
accessibility and to transfer the responsibility of data entry from
government to donors. It is a major step toward improving the quality of
information, particularly of those donors who do not have permanent
offices in Afghanistan and/or maintain their projects data in their home
countries.
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DONOR FINANCIAL REVIEW 7
For this round of DFR the donors were asked to introduce focal points,
preferably local staff, to be trained to be responsible for data entry andupdates of their portfolios in DAD. Donors identified their focal points and
training was provided to all focal points in first week of June. Subsequently,
refresher training sessions were conducted for small groups of focal points
after the DFR meetings.
Due to unavailability of focal points or not being able to participate in the
training, some of our partners did not physically enter the data themselves
and chose to submit their data directly to Aid Management Directorate
(AMD). As an exception, the AMD agreed to receive that data in differentformats, and fed them into the online DAD. However, future DFR’s will
require donors to enter their own data using the online secure DAD
system. Training and technical assistance will be provided to our
development partners to help them submit their data in a timely manner.
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DONOR FINANCIAL REVIEW 9
Overview of Official Development
Assistance to Afghanistan (1380-1388)Since 2002, Afghanistan has been provided with a remarkable amount of
Official Development Assistance (ODA). The country has been pledged
development assistance through a series of Pledging Conferences. The
Tokyo Conference in 2002 was the first event where donors pledged to
provide the country with USD 5.1 billion. It was followed by the Berlin
Conference in 2004 and the London Conference in 2006. Finally, at the
Paris Conference in 2008 the Government of Afghanistan presented its first
five-year National Development Strategy (ANDS). The strategy drew theattention of the Afghanistan development partners and was warmly
welcomed by all. As a result, a further aid assistance of USD 14 billion to
achieve the ANDS targets was pledged.
3.1. Pledges, Commitments & Disbursements
Pledged ODA refers to unwritten commitments that the donors announced
in the pledging conferences and or at different occasions since 2002.
Ministry of Finance’s records show that the total pledges by conference as
indicated in Table 1 stands at USD 33.4 billion. Apart from this, donors
outside the pledging conferences have individually announced the sum of
USD 28.6 billion as supplemental pledges for Afghanistan. This takes the
total pledged ODA, for Afghanistan to USD 62 billion.
Table 2: Overview of Official Development Assistance to Afghanistan (2002-2013)
in US$ Billion
Pledge by Conference
Total Pledge
by Conference
Total
SupplementalPledges
Grand Total
of PledgesTokyo(2002)
Berlin(2004)
London(2006)
Rome(2007)
Paris(2008)
5.1 5.6 8.7 0.04 4.0 33.4 28.6 621
Records of the Ministry of Finance indicate that the amount of committed
ODA consisting of both Grants and Loans from 1381 (2002) to the present
stands at USD 46 billion, of which USD 36 billion has been disbursed. Out of
the total disbursed ODA, around USD 19 billion has been invested in
1Disclaimer: the amount in the above table represents only new pledges at each conference, and
does not include the amount that has been previously pledged. The numbers have been verified
by Government of Afghanistan with each donor.
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DONOR FINANCIAL REVIEW10
security sector to support reform, training and empowerment of the
Afghan National Army (ANA) and Afghan National Police (ANP). This
indicates that over 50% of the total committed ODA has been disbursed toANA and ANP activities. [Note: The OECD DAC has agreed that certain
assistance related to conflict prevention, peace building and security
expenditures meet the development criteria of ODA but to meet this
definition requires a detailed cost breakdown of the assistance provided
under security sector reform. From the data provided for this report, such
analysis was not possible. Because security is one of the major pillars of
the ANDS, however, security related assistance is broadly included in this
DFR under ODA]. The remaining ODA supported development activities.
Compared to the total amount of grant assistance that Afghanistan has
received, the Loan Portfolio comprises a small proportion of the overall
assistance with a total amount of USD 1.4 billion.
Chart 3: Donors' Commitment for period 1380-1888
Chart 2: Pledge ODA to Afghanistan (1381-1391)
27,389
2,249 2,247 1,803 1,448 1,378 1,236 1,206 1,044
5,455
-
5,000
10,000
15,000
20,000
25,000
30,000
U S A
U K
E U
WB
A D B
J a p a n
I n d i a
C a n
a d a
G e r m a n y
O t h
e r s
F i g u r e s i n U S $ M i l l i o n
Source: Budget Department, AMD-MoF, Sep 2009
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DONOR FINANCIAL REVIEW 11
Afghanistan has been receiving aid from about 47 donor countries and
development agencies since 2002. As far as the amount of aid to
Afghanistan is concerned, the United States of America remains by far thelargest donor followed by the United Kingdom, European Union (EC),
World Bank, Asian Development Bank, Japan, India, Canada, and Germany.
Other donors’ commitments together build up to USD 3.4 billion.
3.2. Rate of Aid Disbursement
The overall disbursement rate which stands at 78% in the past seven years
has been satisfactory. However the disbursement rate has decreased since
the last DFR where the disbursement rate was 82%. Based on governmentanalysis, the decrease is mainly because of the availability of more
information, particularly on security sector, which was not available last
time; and the new commitments that have been recently made and have
not been yet disbursed. The disbursement rate may increase by the close
of the current fiscal year.
The trend of disbursement is very different when it’s analyzed individually
by each funding source. The following chart shows the trend of Donors’
performance in terms of disbursement against commitment from 1381 to
1388. In terms of amount, the USA remains the largest provider of aid
assistance for Afghanistan. However, when it comes to comparing the
amount of aid disbursed against the amount committed, Sweden seems to
have disbursed over 90% of the commitment it has made thus far. It is
followed by UK 85%, USA 83%, and so on.
Chart 4: Ratio of Disbursement versus Commitment (2002-2009)
0%
20%
40%
60%
80%
100%
SWED UK USA* EU/ EC NDL CAN WB JAP Others GER NOR IND ADB
Source: Budget Department, AMD-MoF-Sep, 2009
Un-Disb Disb
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DONOR FINANCIAL REVIEW12
Note: This report recognizes that commitments may be for multiyear activities and a portion
of the gap between commitments and disbursements is a result of planned disbursement in
the out years. Also while using the ratio of disbursement to commitment it is important to
note that this ratio is strongly influenced by the type of projects and the sector in which adonor is working. For donors engaged in infrastructure sector and other long term project
investments in which disbursement will occur over several years, they make their
commitments to the full cost of the project at project start which would result in a low ratio
in the initial years of the project.
3.3. Aid Investment in Afghanistan: Identified Trends
3.3.1. Geographic Distribution
As far as the geographical allocation of aid in Afghanistan is concerned, the
government does not have a very clear picture due to lack of information.Although DAD provides the platform for tracking the geographical location
of assistance, the quality of information in this regard is very poor. Based
on this experience and the importance of information on geographical
location of assistance, the DAD has been upgraded to a web-based version
to track better information of aid assistance on a geographical level.
The available information from DAD shows that around 66% of overall aid
has been invested in activities with national impact. Examples are the
support for Afghan National Army and Police, National Solidarity Program,
National Rural Access Program, and Basic Package of Health Services. While
the majority of overall aid assistance has had nationwide impact, theremaining has been allocated to fund various projects across difference
sectors in all provinces of Afghanistan. The nationwide approach does not
Chart 5: Geographical Distribution of ODA
32615
5252
1410 1202 993 1353 1744 1639
0
5000
10000
15000
20000
25000
30000
35000
N a t i o n w i d e
C e n t r a l Z o n e
E a s t
S o u t h
S o u t h - W e s t
W e
s t
N o r t h
N o r t h -E a s t
F i g u r e s i n U S $ M i l l i o n
Zone
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DONOR FINANCIAL REVIEW 13
give a clear indication of how much aid assistance has gone to which
province. It is still a problem for the government to solve with the
assistance of donors and development agencies to identify the exactlocation of every project that is reported to the Ministry of Finance.
In addition, the Provincial Reconstruction Teams (PRTs) have allocated
about USD 2 billion (this includes the assistance through Commanders
Emergency Response Program – CERP) in various provinces to fund small-
scale and quick impact development projects. Most of the projects that the
PRTs implement are planned and discussed at the grass roots level with
community elders, and do not involve views of the central government.
Although the PRTs have actively participated in the reconstruction of
Afghanistan and implemented development and humanitarian projects insome of the most difficult and remote areas, there is a perception among
Afghan people that most of the projects were not aligned with the
government priorities and plans, and have not delivered sustainable
results. The recent SIGAR report (July 2009) also indicates that the military
agencies providing development assistance in Afghanistan does not have
the capability to ensure that their assistance is used effectively.
3.3.2. Aid Investment by Sector
This section provides information about expenditure of donors’ fundingacross ANDS sectors since the year 1381. The analysis of data shows that
over 45% of aid assistance has been committed for security sector.
Infrastructure has received 15% of donors’ funding, and both Agriculture &
Rural Development and Governance have received 9% of the resources.
Other sectors such as Education, Health, Economic Governance, and Social
Protection have jointly received around 22% of aid assistance. The
unclassified proportion represents the amount of aid spent on cross cutting
programs such as gender, counter narcotics, environment protection, and
anti corruption. This indicates that due to large spending in security sector,less attention has been given to other priority sectors of the ANDS.
Looking only at pure development assistance in the past seven years,
excluding assistance for security sector, a different picture emerges. A
major part of the total development assistance was invested in
infrastructure and agriculture and rural development sectors. The
Governance and Rule of Law sectors have received 12% of the total
assistance followed by Economic Governance and Social Protection with
10% each. Health and Education, the two important sectors, have received
the minimum assistance
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Note: a major part of the 12% unclassified expenditure represents donors’ assistance to
government operating budget.
Chart 6: Breakdown of ODA Excluding Security (1380-1388)
12%
24%
9%6%
18%
9%
10%
12%
Governance & Rule of Law
Infrastructure & Natural Resources
Education & Culture
Health
Agricluture & Rural Development
Social Protection
Economic Governance
Unclassified
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Aid delivery channels and modalities
4.1. Delivery Channels
In the past seven years the donors have primarily chosen to manage the
delivery of their assistance to Afghanistan directly. Due to presence of
International Security Forces in Afghanistan, the country has received
development assistance from two major sources namely non-military and
military sources:
4.2.1. Delivery through Military Channels
With 41 countries having military presence under NATO or coalition forces,
the amount of assistance provided through military channels in
Afghanistan is large. Currently there are 26 PRTs in different provinces,
most of which are engaged in development activities. In addition to PRTs, a
huge amount of assistance has been channeled through Combined Security
Transitional Command for Afghanistan (CSTC-A) and Commanders
Emergency Response Program (CERP). Available data shows that 40% or
USD 18.3 billion of the total development aid commitment has been made
by military agencies. Of this amount the USD 17.9 billion provided by the
US Department of Defense. Out of total assistance through militarysources, only about 9% or USD 1.7 billion has been invested in several small
scaled development activities while the remaining 91% has been invested
in the security sector reform.
So far the government of Afghanistan does not have a clear picture of the
assistance provided by military sources. The information in this report has
been taken from SIGAR report of July 2009. This is challenging from the
transparency perspective. Moreover, the assistance from military channels
has been provided through direct channels and has bypassed governmentagencies responsible for coordination and management of foreign
assistance. Strengthening of the security sector is indeed one of the top
priorities in Afghanistan and requires great attention. However, this should
not be provided at the cost of development assistance and should be
provided in close consultation with the government agencies responsible
for coordination and management of foreign assistance.
4.2.2. Delivery through Non-Military Channels
Since 2001 development agencies including multilateral and bilateral havecommitted about USD 27.8 billion for reconstruction and development of
Afghanistan. Compared to military sources, development agencies have
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better capability to provide effective assistance. The development agencies
are the traditional providers of assistance and therefore have the capacity
and resources to manage their funds more effectively.
Table 3: Assistance through Military and Non Military Channel (1381-88) in USD
Million
Funding Channel Commitment %age Disbursement %age
Development 27,816 60% 21,516 58%
Military 18,388 40% 15,401 42%
Grand Total 46,204 100% 36,917 100%
Disclaimer: This amount is greater from the amount mentioned in previous pages because
the disbursement to trust funds have considered as the first delivery point which is from
donor’s account to trust funds account.
4.2. Aid Delivery Modalities
The development assistance provided to Afghanistan in the past seven
years is either managed directly by the donors or provided through the
Government of Afghanistan. Three major modalities have been used:
4.2.1. Budget Implementation Directly Managed by Donors
Available information shows that a majority of assistance provided in thepast seven years was directly managed by donors. About 80% of the total
assistance delivered to Afghanistan has been committed and implemented
directly by donors. The remaining 20% or USD 7.7 billion that has been
disbursed through government includes assistance channeled through trust
funds and assistance for the recurrent expenditures of Government of
Afghanistan. About USD 4.1 billion (including USD 2.6 billion for operating
expenditures) have been channeled through trust funds (assistance
through trust funds eventually flows through government systems).
4.2.2. Afghan Government Managed Budget andImplementation
During the past seven years, about USD 3.6 billion was given directly to the
Government of Afghanistan of which only 23% or USD 826 million was
discretionary or un-earmarked assistance. In other words, the Government
of Afghanistan had the control of only USD 826 million, a major part of
which was loan, to use for its priorities and the remaining priorities have
been set by donors. The IFIs such as the World Bank and Asian
Development Bank were the main providers of discretionary resources.Bilateral donors such as Japan and US Department of Agriculture are
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providing diesel and Soya bean oil from monetization of which the
Government also receives some discretionary funds.
4.2.3. Trust Funds
The Trust Funds namely the Afghanistan Reconstruction Trust Fund (ARTF),
Law and Order Trust Fund (LOTFA), and Counter Narcotics Trust Fund
(CNTF) remain a significant pooled funding mechanism for the Government
of Afghanistan to finance its priority programs and to achieve the results of
its development strategy. While a remarkable amount of Trust Fund
resources are utilized to finance a portion of the Government’s recurrent
costs, a sizable amount of it is utilized to finance the development projects
across different sectors. The following Trust Funds are used to pool theresources from the donors:
Afghanistan Reconstruction Trust Funds (ARTF)
The ARTF which is by far the largest recipient of donor funding, on behalf
of the Government of Afghanistan, has managed a sizable amount of
Official Development Assistance channeled through the core budget of the
Government. All ARTF funding is on-budget, which means that it uses the
public financial management of the government. 79% of the total
assistance through the Trust Funds has been provided through ARTF.Administered by the World Bank, the ARTF was established in 2002 to
support the shortfall of government recurrent expenditures. With the
increase in the size of donors’ assistance to ARTF the investment window
has expanded significantly in recent years, enabling pooled financing for
scaling up government programs, mainly national programs. The ARTF
funds are managed by a Management Committee which consists of the
World Bank (the administrator), Islamic Development Bank, the Asian
Development Bank, UNAMA, and UNDP. Ministry of Finance plays the role
of observer in this committee. As of September 2009, a total of USD 3.3
billion has been made available to ARTF and USD 3.1 billion has been
disbursed.
Law and Order Trust Fund for Afghanistan (LOTFA)
Administered by UNDP, LOTFA was established in 2002 to mobilize
resources for the support of Afghanistan National Police (ANP). This trust
fund is a very useful source of financing the recurrent expenditures of ANP
as well as of some ANP infrastructure projects. As of July 2009, around USD
920 million has been committed by donors and USD 868 million has been
paid to LOTFA.
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Counter Narcotics Trust Fund (CNTF)
Also administered by UNDP, CNTF was established in 2005 to mobilize
resources needed by the Government of Afghanistan to implement theNational Drug Control Strategy. Although CNTF was ended in December
2008, it has been extended for another year to support counter narcotics in
Afghanistan. By July 2009, donors paid a total of USD 65 million to CNTF to
finance major projects designed to achieve the National Drug Control
Strategy.
Disclaimer: The percentages are based on the donors actual disbursement where the
disbursement for trust funds is considered based on first point of delivery.
4.3. Analysis of the Effectiveness of Existing Modalities
4.3.1. Directly Donor Managed
Assistance directly managed by donors is effective only when it is aligned
with the priorities of recipient country and does not undermine its
ownership. This could be achieved only if there is sufficient consultation
with the recipient country and also if the donors demonstrate flexibility in
the allocation of their resources. This modality is very effective for quick-
response or emergency activities where immediate response is very
important or because of bureaucracy, channeling of assistance through
government would not be suitable.
In order to align the donors’ managed assistance with government
priorities, it is necessary that consultation should take place with the
recipient country prior to allocation of resources. In Afghanistan, somedonors do involve the government in allocation of their resources and
Chart 7: How Aid Assistance Has Been Channeled
77%
23%
Donors Managed Assistance
Government Managed
Assistance
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many other donors bypass the government. In general, the government
does not see much flexibility in the allocation of such resources and in
many cases is not able to secure assistance for its priorities throughdonors’ managed assistance. Therefore, it is difficult to say that donors’
managed assistance has been aligned with government priorities. For such
assistance to be effective it is very necessary that the government be
actively involved in the allocation of resources and donors demonstrate
flexibility in considering the government priorities while committing their
assistance to specific activities.
4.3.2. Afghan Government Managed
In order for development assistance to be effective, it should be provided
according to the principles of Paris Declaration on Aid Effectiveness, which
was endorsed and signed by all traditional (OECD DAC) donors in 2005. One
of the Paris Declaration Principles on Aid Effectiveness calls for the
ownership of the resources and planning to be vested in the hands of the
recipient countries. Alignment which is another principle of Paris
Declaration calls upon donors to align their assistance with the national
priorities of the recipient countries and to use local systems such as
national budget, procurement and reporting systems. It clearly indicates
that the assistance channeled though systems of recipient countries ismore effective. However, donors that are unable to fund through
Government, still should align their projects/programs with the
Government priorities to make aid effective in terms of development
delivery and impact. The effectiveness and development impact from the
assistance outside the Government systems has been reduced where
donors have failed to consult with Government and have funded non
priority activities. This has been a significant problem over the past seven
years.
The two major challenges in all post conflict countries or countries in
conflict, including Afghanistan, are the government’s capacity, and
corruption which results in donors being reluctant to deliver their
assistance through the systems of recipient countries. These problems are
the major and common results of long conflicts. The problem of low
capacity can be addressed with the support of donors. According to OECD
Principles for Good International Engagement in Fragile States and
Situation (April 2007), international actors should understand the specific
context in each country and should recognize the different constraints of
capacity and should mix and sequence their aid instruments according to
context, and avoid blue-print approaches (Principle 1).
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“More than half of all reconstruction dollars have been allocated to build the
Afghan National Security Forces (ANSF). SIGAR’s audit examining the ability of
the Combined Security Transition Command - Afghanistan (CSTC-A) to monitorcontractor performance found that CSTC-A, which is responsible for the
training program, did not have the mechanisms in place to ensure funds were
managed effectively and spent wisely”
SIGAR report July 2009
Another major challenge that the Government faces is the retention of
current capacity. With the meager resources available to the Government
of Afghanistan, it is difficult to retain the capacity because of the higher
turnovers of the local staff, particularly of the contracted staff. The localstaff working with the Government is attracted to the international
agencies, private companies or the Project Implementation Units (PIUs)
which pay higher salaries than those paid by the Government. This means
that the newly built government capacity is depleted by the international
agencies or private companies.
A common indicator of measuring the government capacity is the
absorption capacity or budget execution rate. It is true that the national
budget execution rate has been lower than the execution rate of donors’
managed budgets. One of the major reasons for slow disbursement of government funds is the control system. The government has to follow the
fiduciary disciplines which require more time than other non-governmental
procedures. However, this situation is distorted by security spending
(which is channeled entirely through donor managed funds) – if this
spending is removed, the execution rates of Government and donor
managed funds are very similar. Thus the execution rate is a problem for
both Government and development partners.
Note: Budget execution through government is inclusive of operating budget.
Chart 8: Budget Execution Rate
0%
20%
40%
60%
80%
100%
120%
1383 1384 1385 1386 1387 1388
Through GoA
Directly
Managed by
Donor
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Similarly corruption is one of the key challenges in post conflict countries
with large aid flows, given the limited institutional capacity and the size of
the interventions. It is an issue for both Government and externally fundeddonor supported development activities. It is a problem in Afghanistan and
the Government is trying to address it. The Government has established an
international standard Public Finance System, budgetary processes and
transparency have been strengthened through the implementation of the
Public Finance and Expenditure Management (PFEM) Law in 2005 and its
regulation in 2006. Combined with procedures and controls the
computerized financial management systems provide a very sound
fiduciary control framework. Procurement activities continue to be
supported by a central agency (Afghanistan Reconstruction and
Development Services) for large contracts. The legal and institutional
framework has been developed with the Procurement Law (2005) and the
creation of Procurement Policy Unit in MoF in 2006. In January 2009,
amendments to the law were approved (Procurement Law with
Amendments 2008). Vulnerability to Corruption assessments have been
undertaken in several government agencies, and have been useful assisting
key departments in identifying areas with high corruption risk and take
measures to mitigate such risks.
As said earlier, corruption is a common problem for both Government andexternally funded donor supported activities and requires joint efforts to
be tackled. It is very important both for government and its development
partners to take measures to curb corruption. Avoiding Government and
using external mechanism to deliver assistance will not solve the problem.
4.3.2.1. Trust Funds
Multi-donor Trust Funds are very effective alternative aid instruments in
countries where capacity is an issue with the government institutions.
Donors that have concerns on the capacity of government but would like to
support government priorities usually use the multi-donor trust funds. In
Afghanistan three major trust funds have been established namely the
Afghanistan Reconstruction Trust Fund (ARTF), Law and Order Trust Fund
for Afghanistan (LOTFA) and Counter Narcotics Trust Fund (CNTF). A huge
amount of assistance has been provided to support the priorities of Afghan
government. An emerging interest has been observed among donors in
providing more assistance through trust funds. The assistance through
trust funds eventually flows through government systems and government
has an active role in allocation of assistance from trust funds. However, inrecent years, donors have tended to provide funds with increasing
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“preference.” This has been a particular concern in the ARTF where donor
preferences risk undermining the value of the budget as the main policy
tool. Discussions led by the Government are underway between ARTFdonors and the ARTF Management to develop an ARTF Financing &
Investment Strategy that would establish a framework for multi-year
allocation of resources by sector. This would increase predictability for
improved planning and would anchor referencing within a multi-lateral and
government led framework.
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Overview of Official Development
Assistance in 1387 and 1388
3.1. Commitments and Disbursements
One of the major focuses of this DFR is to review the assistance of the
current fiscal year (1388), as well as the year preceding (1387). As per the
information received from our development partners, a total of USD 10.72
billion was committed during this period of which USD 7.41 billion or 69
percent has been disbursed so far. The liquidation may increase as the end
of the fiscal year approaches. From the total commitment during thisperiod, 79 percent has been directly managed by donors and only 21
percent of the total assistance (USD 2.33 billion) has been committed to be
provided through government, of which around 50 percent ( USD 1168
million) is for operating expenditures.
3.2. Donor Investments by Sector
Available information shows that security sector has received the largest
portion (USD 5.28 billion or 49 percent) of the total commitmentthroughout 1387-1388. It is followed by Good Governance and Rule of Law
sectors with USD 1.2 billion (11%) and Infrastructure and Natural Resources
sectors with USD 991 million or 9 percent.
Chart 9: Sector-wise donor assistance for the period of 1387 and 1388
46%
13%
11%
5%
5%
8%
3%4%
5%
Commitment 1387 - 1388
Security
Governance & Rule of
Law
Infrastructure &
Natural Resources
Economic Governance
Agricluture & Rural
Development
Health
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The United States provided 67 percent or USD 7.14 billion of the total
commitment during this period. World Bank with USD 796.19 million (or 7
percent) commitment and EC with USD 513.65 million (or 4.7 percent)remained the 2nd and 3rd major contributors.
The level of disbursement against commitment varies from donor to donor
in this period. As the largest provider of aid, the United States has
disbursed the largest amount of assistance (USD 4.5 billion); it is followed
by the World Bank with USD 221 million and UK with USD 212.5 million.
However, if we look at the disbursement rate of each donor in this period,
we have a different picture. The USA only disbursed 64 percent of its
committed amount followed by the UK with 42 percent, and the WB with
28 percent.
3.3. Investment by Channels and Modalities of Delivery
Trust funds remained one of the main funding sources for government
expenditures during this period. Donors have committed a total of USD1.2
billion for ARTF of which USD 861 million has been paid.
Following ARTF, the Law and Order Trust Fund for Afghanistan (LOTFA) was
the main financier of Afghan National Police. Donors have pledged USD 457million for LOTFA and paid a total of USD 405 million by July 2009. Donors’
contribution to LOTFA during this period was very stable and remained
almost the same in both years.
3.4. Highlighting Achievements
It is very important to see the results of the investment of development
assistance during this period. Because of a lack of information on the
results of donors’ managed assistance, it is very difficult to present majorachievements during this period. Based on the information provided by line
ministries, following are some of the major achievements during this
period;
Electricity supply was expanded to 630 Megawatt from 485 Megawatt
in 1386. The transmission line connecting Afghanistan with Uzbekistan
was completed in this period and a total of 100 megawatt electricity
imported from which 70 Megawatt provided to Kabul city.
More than 3 million new fixed and mobile subscribers added duringthis period. With this new achievement, the total number of
subscribers of fixed and mobile telephone has approached 9.5 million.
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The implementation of fiber optic project has been improved and
about 80% of work has been completed by this period. After
completion of this project in 1388, Afghanistan will be connected forthe first time with Tajikistan, Iran and Uzbekistan through fiber optic.
A major portion of regional and connecting roads were constructed
during this period. During the first six months of 1388 approximately
1842 kilometers of regional roads and 1119 kilometers of connecting
rods were constructed.
A remarkable increase was noticed in the domestic revenues during
this period. The revenue in 1387 was increased by 23% while in the
first half of 1388 it increased about 58% from the first half of 1387.
Several health facilities were constructed during this period and the
Basic Package of Health Services was provided to 85% of the
population. About 90% work of 107 health facilities was completed
during this period. In addition to this, the 350 bed Jamhoryat Hospital
was constructed and equipped in Kabul. One blood bank in Kabul and
four other regional blood banks were opened during this period.
Nationwide 1709 general education schools were newly constructed
and at the same time the construction work began on 1189 schools.
During the first six months of 1388 approximately 6.2 million childrenenrolled in schools and the number of schools was increased to 11000.
Similarly in other sectors there many other achievements. But due to lack
of proper information we have not been able to reflect all major
achievements here. We hope in future reports we would be able to list all
major achievements.
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Perspectives on Donor Assistance in
Afghanistan
6.1. Commitments and Disbursements
Predictability of assistance is one of the key principles of Aid Effectiveness
and is very necessary for countries that are highly dependent on external
assistance. Afghanistan is a country highly dependent on aid where 100
percent of its development expenditures and 36% of its operating
expenditure are financed by external assistance.
When it comes to predictability of aid in Afghanistan, many donors have
failed to provide information on their future aid program. There has also
been inconsistency in the information that has been provided to
Government. This inconsistency can be seen by comparing the estimates in
the two DFRs from January and November of 2009:
Estimated Funds for 1387-91 in January DFR less USD 20.8 billion
Less Funds committed in 1387 USD 6.7 billion
Estimated funds for 1388-91 in November DFR USD 10.2 billion
Discrepancy USD 3.9 billion
This appears to indicate a reduction in donor funding for the period of USD
3.9 billion when comparing the two DFRs. No notification of intent to
reduce funds committed has been received from any donor. It therefore
must be concluded that over a period of only eight months there has been
a significant shift in the predictability of aid flows resulting from
inconsistencies in the way the funding is counted. There appear to
particular problems arising from the lack of information from major donors
such as United States, Japan, Netherlands, Spain and Turkey. Thus, the
Government of Afghanistan does not have a clear picture of assistance in
future years and is unable to plan for the medium term.
Since Afghanistan is highly dependent on external assistance, the
formulation of the national budget is also dependent on the predictability
of the assistance; therefore, the information on the predictability of
assistance is highly important for the Government. The inconsistency has
hampered the efforts of the Government to plan for the medium term, andto implement its development programs without any hesitation of
financing.
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The available information shows that from the total USD 10.2 billion that
may be provided in the coming four years, donors will continue to spend a
large amount of their assistance outside of government systems and a very
small portion of their assistance will be channeled through Government. It
is predicated that a total of USD 7 billion will be managed by donors and
only about USD 3 billion will be channeled through Government which
includes the assistance through trust funds. .
Note: the percentage is not very reliable given that large donors that do not channel funds
through government have not reported for this DFR. This percentage will drop largely if
more information will be available.
Chart 10: Comparison of aid predictability by two DFRs
Chart 11: Predictability of funding modality (1388 – 1391)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1388 1389 1390 1391
I n M i l l i o n U S $
1387 DFR
1388 DFR
30%
70%
Through Government
Managed by donors
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6.2. ANDS Financing Gap
Based on donors estimates of their future assistance, a total of USD 10.2billion will be provided to Afghanistan in the coming four years.
Considering the needs of the ANDS which is estimated at USD 50.1 billion,
the donors’ assistance falls short. The ANDS was presented by the
Government of Afghanistan in the Paris conference in 2008, and was
endorsed by its developing partners. In order to finance the ANDS, the
Government requested around USD 43 billion from its development
partners while it remained committed to secure USD 6.8 billion from its
domestic revenues. In SY1387 Government revenue was Afs 41.4 billion or
USD 828 million and about USD 5.3 billion ODA was disbursed by donors.
Considering the amount spent in 1387 and the donors’ estimates in coming
four years, there is a shortfall of USD 27.8 Billion for the implementation of
ANDS.
Table 4: ANDS Financing GAP
A. ANDS Funding Requirement 50.1 Billion USD
B. ODA Disbursed in 1387 5.3 Billion USD
C. Domestic Revenues in SY1387 0.82 Billion USD
D. Donors Estimates for Coming Four years 10.2 billion USD
E. Estimated Domestic Revenues 1388 to 1391 5.9 Billion USD
Funding shortfall = (B+C+D+E) - A 27.8 Billion USD
Though this conclusion is a little sweeping because of lack of clear
information on future volume of assistance it is very important for the
Government to inform its development partners of the concern over the
implementation of ANDS given the available information. Given that
Afghanistan is highly dependent on foreign aid, it is very important for the
country to be aware of assistance flow at least for the medium term. It is
also very important to note that provision of information on thepredictability of assistance is very necessary for such assessments.
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Recommendations
7.1. INFORMATION SHARING
COMMENT: Afghanistan is financially dependent upon international
assistance and accurate and precise information about the available
assistance is a vital to its budget preparations. It is crucial that the
Government have as exact information as possible not only on the current
activities but also on long and mid-term predictability of anticipated ODA.
In Accra, donors recognized the importance of this information sharing as a
condition for making aid more effective, the donors committed at the Accra
Agenda for Action in 2008 to:
“publicly disclose regular, detailed and timely information on volume,
allocation and when, available, results of development expenditure to
enable more accurate budget, accounting and audit by developing
countries”, “support information systems for managing aid”; and “provide
full and timely information on annual commitments and actual
disbursements”.
Through this information, the Government will be able to develop both along and a mid-term perspective of assistance and further enhance its
Medium Term Fiscal Framework (MTFF).
RECOMMENDATION: Further increase information sharing on
development assistance between the Government of Afghanistan and the
donors in order to assist the Government of Afghanistan to improve its
budget process thereby increasing transparency and accountability on both
sides.
7.2. DISBURSEMENT CHANNEL
COMMENT: The Paris Declaration on Aid Effectiveness requires that donor
funding be channeled to build government capacity, ensure alignment with
national priorities and increase national ownership.
RECOMMENDATION: Increase the level of development assistance
provided directly to the national treasury.
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7.3. ANDS FINANCING MECHANISM
COMMENT: The ANDS Financing Mechanism which was recently developed
jointly by government and its development partners is an essentialcomponent in increasing national and government ownership of the
development of Afghanistan, and assists in aligning development
assistance with ANDS priorities.
RECOMMENDATION: Both government and its development partners to
take immediate steps to finalize and implement the ANDS Financing
Mechanism based on the proposed action plan by Government.
7.3.1. PEER REVIEWCOMMENT: Peer Review has already been piloted in two ministries and
has proved an effective tool to positively enhance coordination between
the Government and the international community on donors managed
programs/projects.
RECOMMENDATION: Both government and its development partners to
further develop and strengthen the use of the Peer Review Mechanism for
projects implemented and managed directly by donors.
7.3. CORRUPTION
COMMENT: The Government is committed to enhancing its ability to
address corruption and asks its development partners to continue to
support it in tackling this serious and global issue.
RECOMMENDATION: Donors to continue to support the Government to
enhance its ability to address corruption at all levels.
7.4. Capacity Building in the Operationalization of ANDS
COMMENT: Any development strategy which is not changed into
actionable plan remains on paper. The ANDS is a five-year strategy that
paves the ground toward a sustainable development in Afghanistan.
Unless it is changed into actionable programs, it will be difficult to
implement it with the expected results. In order to achieve the expected
results, the Government needs institutional capacity to design practical
programs aligned with the ANDS.
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DONOR FINANCIAL REVIEW 35
RECOMMENDATION: Donors to strengthen and prioritize the
Government’s institutional capacity to implement the policy and priorities
of the ANDS into actionable activities.
7.5. Specificity of information in the security sector
COMMENT: Without specific activity level information about security
sector spending, it is difficult to determine what security sector assistance
can be officially classified as ODA.
RECOMMENDATION: Donors to Increase the specificity of the information
provided regarding assistance to the security sector.
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Annexes
Contents
1. Donors Official Development Assistance to Afghanistan:
i. Pledges: 2002 – 2013
ii. Commitments: 2002-2009
iii. Disbursements: 2002-20092. Official Development Assistance to Afghanistan classified by
source of funding:
i. Commitments and Disbursements: 2002-2009
3. Donors' Commitment to Government Operating Budget
4. Modalities of the Assistance (1381-88)
5. Predictability of ODA for Afghanistan (1388-1391)
6. Breakdown of Commitment and Disbursements by Donor
7. Core and External Support to ANDS Sectors (2001-2009)
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DONOR FINANCIAL REVIEW38
Table 5: Donors Official Development Assistance to Afghanistan
Figures in US$ Million
Rank Donor2002-2013 200-2009 2002-2009
Pledge Commitment Disbursement
1 USA 38,000 28,366 23,4172 UK 2,897 1,810 1,546
3 WB 2,800 1,883 1,364
4 ADB 2,200 1,552 618
5 Japan 1,900 1,378 990
6 EU/EC 2,037 1,973 1,576
7 Canada 1,679 1,206 898
8 India 1,200 1,236 662
9 Germany 1,188 1,044 584
10 Norway 938 598 324
11 Iran 864 330 341
12 Netherlands 753 902 715
13 Denmark 673 290 151
14 Saudi Arabia 533 135 98
15 Italy 515 424 268
16 Spain 486 100 88
17 Australia 369 202 130
18 UAE 308 23 15
19 Pakistan 305 5 -
20 Sweden 289 518 430
21 United Nations 252 492 182
22 Agha Khan 239 180 73
23 China 197 138 58
24 Turkey 190 165 151
25 Finland 152 160 132
26 France 152 228 125
27 Russian Fed. 141 147 147
28 Switzerland 134 124 63
29 Other Sources 123 198 103
30 Belgium 87 61 52
31 Korea (Rep of) 85 54 50
32 Islamic Dev. Bank 70 61 5
33 Kuwait 60 19 1934 Ireland 33 25 21
35 New Zealand 30 12 8
36 Taiwan 29 - -
37 Croatia 28 - -
38 Czech Republic 22 6 4
39 Qatar 20 - -
40 Austria 14 6 6
41 Greece 12 2 1
42 Luxemburg 7 11 10
43 Oman 6 - -
44 Poland 5 15 10
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DONOR FINANCIAL REVIEW 39
Disclaimer: Due to lack of accurate information from some donors for this DFR the actual
commitment and disbursement numbers might be greater than what is reflected in this table.
And also the information in this table is as of July 2009 and any commitment and
disbursement made after this period is not reflected in this table.
45 Hungary 3 6 5
46 Malta 3 - -
47 Egypt 2 - -
48 Lithuania 2 3 2
49 Portugal 2 2 150 Slovakia 1 - -
51 Brazil 1 - -
52 Vietnam 0.01 - -
53 Estonia - 1 1
54 Singapore - 2 2
55 Brunel - 4 0
56 Kazakhstan - 2 2
Total 62,035 46,099 35,450
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Table 7: Donors’ Commitment to Government Operating Budget
Funding
Source1381 1382 1383 1384 1385 1386 1387 1388
Grand
Total
ARTF 59 214 235 253 300 291 310 250 1,913
LOTFA 7 66 65 81 107 136 229 230 921USDoD 64 91 115 271
Total 66 280 300 334 407 491 630 595 3,104
Note: in 1388, the figure for LOTFA is donor commitment from which 17.8 million has been disbursed so
far.
Table 8: Modalities of the Assistance (1381-88)
Figures in US$ Million
Modality Disbursement %ageDonors Managed Assistance 29,189.55 77%
a. Military Source 14,867.47 39%
b. Non-Military Source 14,322.08 38%
Government Managed Assistance 8,691.07 23%
a. General Budget Support 3,653.57 42%
1. Discretionary 770.35
2. Non Discretionary 2,883.22
b. Development Support
through Trust Funds1,495.00 17%
1. ARTF 1,430.002. CNTF 65.00
c. Support to the recurrent
Budget3,542.50 41%
1. ARTF Recurrent window 1,774.77
2. LOTFA 847.00
3. USDoD 920.73
Grand Total 37,880.62
Note: The disbursement through trust funds is from donors' to trust fund administrator and that is why the
total disbursement is greater than the disbursement by sector and also in %.
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Table 9: Predictability of ODA for Afghanistan (1388-1391)
Figures in US$ Million
S.No. Description
Annual Breakdown
1388 1389 1390
2009-2010 2010-2011 2011-20
1 Total funding envelope 6,643.66 1,686.77 1,00
2 Sectoral Allocation of the above
A Security 2,262.59 87.74 6
B
Governance & Public Administration Reform &
Human Rights 803.36 257.88 24
C Justice and Rule of Law 28.46 56.49 1
D Religious Affairs 0.00 0.00
E Energy 730.07 139.49 7
F Transport 799.91 46.79 4G Urban Development 66.49 69.77 6
H Mining 26.01 11.04
I Information & Communications Technology 30.65 0.00
J Water 152.72 145.96 2
K Education 229.98 173.74 14
L Culture, Media & Youth 11.97 7.14
M Health & Nutrition 326.87 268.39 10
N Agriculture and Rural Development 584.91 223.76 7
O Social Protection 92.81 32.75 P Refugees, Returnees & IDPS 45.74 5.64
Q Private Sector Development & Trade 148.78 74.20 5
R Unclassified 302.34 86.01 6
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3 Modality for Delivery of Assistance
Of the above how much will flow through
Total Core Budget 2,069.46 405.86 26
1) Direct Core Budget 1,484.47 29.08 3
2) Trust Funds 576.92 366.78 22a- ARTF 314.62 356.78 21
b- LOTFA 262.31 10.00 1
c- CNTF 0.00 0.00
Total Off-budget (external budget) 4,603.57 1,202.01 76
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Table 10: Donor-wide Funding (Commitment & Disbursement Breakdown)
for 1387 and 1388 including Trust Funds
FundingSource
1387
Commit in
DAD
(USD)
Disb
(USD)
Commit
ARTF
Disb
ARTF
Commit
LOTFA
Disb
LOTFA
Total
Commitment
in 1387
Total
Disbursement
in 1387ADB 118.24 60.50 - - - - 118.24 60.50
Aga Khan - - - - - - 0.00 0.00
Australia 50.13 11.73 31.44 31.44 1.920 1.92 83.49 45.09
Austria - - - - - - 0.00 0.00
Belgium 0.85 0.85 2.61 2.61 - - 3.46 3.46
Brazil - - - - - - 0.00 0.00
Brunei 0.62 - - - - - 0.62 0.00
Canada 162.80 105.37 22.07 22.07 17.900 17.90 202.77 145.34
China 19.96 5.47 - - - - 19.96 5.47
Czech Republic 4.71 2.69 - - - - 4.71 2.69
Denmark 28.53 21.50 20.86 20.86 - - 49.39 42.36
EC 392.37 0.13 11.31 11.31 55.375 55.38 459.05 66.82Estonia 0.39 0.42 - - - - 0.39 0.42
Finland 7.48 3.55 7.92 7.92 1.940 1.94 17.34 13.41
France 25.24 21.78 5.130 5.13 30.37 26.91
Germany 232.90 77.74 74.000 74.00 16.820 16.82 323.72 168.56
Greece - - - - - - 0.00 0.00
Hungary 2.87 3.46 - - - - 2.87 3.46
IDB 0.26 0.26 0.00
India 198.79 3.39 0.190 0.19 - - 198.98 3.58
Iran 25.65 - - - - - 25.65 0.00
Ireland - - 1.580 1.58 - - 1.58 1.58
Iceland 0.100 0.10 0.10 0.10
Italy 79.92 76.15 34.070 34.07 1.295 1.30 115.29 111.52Japan 53.77 23.85 13.820 13.82 67.59 37.67
Korea 1.30 - - - - - 1.30 0.00
Latvia - - - - 0.020 0.02 0.02 0.02
Lithuania 1.25 0.92 - - - - 1.25 0.92
Luxembourg - - 1.140 1.14 - - 1.14 1.14
Netherlands 78.51 41.64 39.460 39.46 25.580 25.58 143.55 106.68
New Zealand 4.48 5.53 - - - - 4.48 5.53
Norway 88.27 39.09 31.470 31.47 - - 119.74 70.56
Other Source 83.21 5.90 - - - - 83.21 5.90
Poland 4.59 2.22 1.171 1.17 - - 5.76 3.39
Russian Feder - - 2.000 2.00 - - 2.00 2.00
Red Cross - - - - - - 0.00 0.00
Saudi Arabia 4.00 - - - - - 4.00 0.00
Spain - - - - - - 0.00 0.00
Sweden 58.14 51.82 18.350 18.35 - - 76.49 70.17
Switzerland 12.82 4.20 - - - - 12.82 4.20
Turkey 78.46 62.18 - - - - 78.46 62.18
UAE 3.29 3.16 - - - - 3.29 3.16
UK 72.61 23.61 162.540 162.54 3.570 3.57 238.72 189.72
UN 56.58 40.70 0.251 0.25 56.83 40.95
USA 3,853.35 3,607.00 159.500 159.50 - - 4,012.85 3,766.50
Unspecified - - - - - - 0.00 0.00
WB 224.40 189.47 - - - - 224.40 189.47
Total 6,030.73 4,496.03 626.81 626.82 138.59 138.59 6,796.13 5,261.43
Source: DAD (Aug, 2009), ARTF Report (Aug, 2009), and LOTFA Report (Jul, 2009).
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Table 11: Donor-wide Funding (Commitment & Disbursement Breakdown)
for 1387 and 1388 including Trust Funds
FundingSource
1388
Commitin DAD
(USD)
Disb(USD)
CommitARTF
DisbARTF
CommitLOTFA
DisbLOTFA
TotalCommitment
in 1388
TotalDisbursement
in 1388ADB 301.93 110.00 14.99 - - - 316.92 110.00
Aga Khan 16.75 0 2.87 - - - 19.62 0.00
Australia 18.88 2.4 - 14.99 - - 18.88 17.39
Austria - - - - - - 0.00 0.00
Belgium 12.93 - - - - - 12.93 0.00
Brazil - - 0.20 - - - 0.20 0.00
Brunei 2.21 - - - - - 2.21 0.00
Canada 119.04 9.98 46.69 34.23 8.09 8.09 173.82 52.29
China 15.94 - - - - - 15.94 0.00
Czech Republic 0.87 0.95 - - - - 0.87 0.00
Denmark 56.52 8.28 5.97 - - - 62.49 8.28
EC 34.81 0 17.25 11.25 2.59 - 54.65 11.25Estonia 0.23 0.52 - - - - 0.23 0.52
Finland 4.42 0 8.86 8.86 - - 13.28 8.86
France 76.55 15 - - - - 76.55 15.00
Germany 52.19 0 35.83 - - - 88.02 0.00
Greece - - - - - - 0.00 0.00
Hungary 1.22 0.33 - - - - 1.22 0.33
IDB 45.65 0 - - - - 45.65 0.00
India 75.94 0.8 0.01 - - - 75.94 0.80
Iran 1.50 - - - - - 1.50 0.00
Ireland 4.34 1.55 2.78 2.78 - - 7.12 4.33
Iceland - - - - - - 0.00 0.00
Italy 126.34 3.05 - - - - 126.34 3.05Japan 52.45 12.002692 - - 124.80 124.80 177.25 136.80
Korea 0.50 - - - - - 0.50 0.00
Latvia 0.40 - - - - - 0.40 0.00
Lithuania 1.64 0.607098 - - - - 1.64 0.61
Luxembourg - - 1.14 1.14 - - 1.14 1.14
Netherlands 59.33 59.599 49.01 2.50 - - 108.34 2.50
New Zealand 3.03 - - - - - 3.03 0.00
Norway 107.03 45.5 38.44 17.51 - - 145.48 63.01
Other Source 82.02 3.41 82.02 3.41
Poland 6.32 3.422161 6.32 3.42
Russian Feder 2.00 2.00 2.00 2.00
Red Cross 0.00 0.00
Saudi Arabia 20.00 20.00 0.00
Spain 35.23 35.23 35.23 35.23
Sweden 66.13 37.39 18.33 84.46 37.39
Switzerland 25.39 2.69173 25.39 2.69
Turkey 0.00 0.00
UAE 0.002 0.00 0.00
UK 94.569 0.283 106.07 11.56 11.56 212.20 11.85
UN 88.95 31.114735 0.25 0.25 89.20 31.36
USA 2,912.36 1084 221.50 104.00 3,133.86 1,188.00
Unspecified - - - - - - 0.00 0.00
WB 571.79 32.51 - - - - 571.79 32.51
Total 5,060.18 1,404.84 607.15 234.48 147.29 144.70 5,814.62 1,784.02
Source: DAD (Aug, 2009), ARTF Report (Aug, 2009), and LOTFA Report (Jul, 2009).
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Table 12: Core & External support to ANDS Sectors 1380-88 (2001-09)
Figures in million US$
Sector 1380 1381 1382 1383 1384 1385 1386
Com Disb Com Disb Com Disb Com Disb Com Disb Com Disb Com Disb
Security 70 46 420 353 779 582 1,303 1,318 3,373 3,200 2,250 2,137 7,487 7,941
Governance &Rule of Law
62 38 169 40 242 191 245 216 341 302 519 197 1,236 254
Infrastructure &Natural Resources
70 50 227 120 1,299 362 1,166 427 592 480 856 930 1,315 618
Education &Culture
70 46 198 89 282 170 226 120 366 201 397 168 393 211
Health 98 77 54 39 221 68 88 58 184 110 358 160 186 204
Agriculture & RuralDevelopment
159 124 326 145 498 146 420 209 771 369 318 358 886 757
Social Protection 390 342 295 301 295 256 202 203 199 139 117 146 183 113
Economic
Governance
0.42 0.42 156 78 106 58 277 166 75 293 129 140 107 520
Unclassified 69 43 83 90 242 236 254 253 266 268 429 353 359 374
Total 988 767 1,929 1,254 3,964 2,070 4,181 2,970 6,167 5,361 5,374 4,590 12,153 10,992
USA data source is SIGAR July 2009 report.
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