Afghanistan Fiscal Outlook

Afghanistan Annual Budget

OverviewIntroductionFiscal outlookTotal revenue / receipt National Budget ( expenditure )Operating Budget Development BudgetCore Budget by Sectors

IntroductionThe system of budget and budgetary processes in Afghanistan is still at nascent stage as compared to other countries. It is because the politics in Afghanistan has historically consisted of power struggles, bloody coups and unstable transfers of power. The country has been governed by nearly every system of government- monarchy, republic, theocracy, and communist state. The frequent political and social instabilities have affected the economy of the country severely and hence there has been no systematized effort to build the modern day institutions of public finance management in the country. However, the Afghanistan of twenty-first century has seen glimmer of hope as it is experimenting with democracy and rule of law. This has accelerated efforts for institution and nations-building in the country.

In Afghanistan, the Ministry of Finance (MoF) prepares and presents the Annual Budget to the National Assembly every year at the start of financial year for approval. The National Assembly, after approving the budget, authorizes the government to execute it. The financial year in Afghanistan starts on 21st March and ends on 20th March of the next year.*

Key PointsThe Budget is a Political Strategic DocumentFocus on Achieving ANDS GoalsProvinces are not Budgetary UnitsFunded through Combination of Domestic Revenues and Donors Contribution Currency Afghan (Afs)GDP Afs 1291 BillionPer Capita Income$668( Afs 40080)Afghan (Afs) to INRAfs1000 equal to Rs 1010 INR

Fiscal Outlook

Financial Resource (Revenue A/C)Domestic Revenue / Internal Resourcesdomestic revenues of FY 2015 in proportion with revenue realization of FY 2014 and theeconomic situation in general have been estimated to be around AFs 125.513 billion showing about AFs

External ResourcesThe total of grants to fund the national budget of FY 2014-15 is about Afs. 302.753 billion equivalent to (USD5.311 billion) funding about 71 percent of the national budget. The table below shows all the resources funding the national budget. Out of this, AFs 161.784 billion comes from (CSTC-A, ARTF, LOTFA and some other donors) that will be used to finance operating expenditures of the Government for the fiscal year.

ExpenditureThe total national budget of FY 2014-15 is estimated to be around Afs 436.173 billion equivalent to $7.652 billion which is accounted for about 32% of GDP .

Operating Budget The total operating budget of FY 2014-15 is about AFs 283.483 billion equivalent to (USD 4.973 billion) accounting for 65% of the total national budget. The operating budget of FY 2014-15 covers about 21% of the GDP .Most part of the operating budget (approximately 55%) is allocated to wages and salaries of the government employees. According to the graph bellow:

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Development budget The development budget of FY 2014-15 estimated to be around AFs 152.686 billion equivalent to (USD 2.678 billion) accounting for approximately 35 percent of the total national budget and about 11 percent of the total GDP.

Core Budget By SectorsCore Development Budget Core Operating BudgetAgriculture 26%Security 64% Infrastructure 37% Education 19%Education 14%Economic Governance 3%Health 10%Infrastructure 3%Economic Governance 7%Agriculture 1%Security 1%Health 2%Government Rule of Law 1%Social Protection 1%Social Protection 1%

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