Thursday, 18 August 2016

Most of Afghan ministries underspend their development budgets

Afghan Minister of Finance with the
High Representative of the EU for Foreign Affairs
Despite the current high unemployment rate and growing poverty in the country, many ministries failed to spend their development budgets over the past eight months of the current fiscal year.
The Ministry of Finance (MoF) says that the ministries and independent government organizations have used up only a small portion of their development budgets so far because most of the development budget is spent in the last two quarters of the fiscal year. According to reports, about 20 ministries have spent less than 20 percent of their development budget over the past eight months. Ministries and independent government institutions were faced with similar problem each year, but no solution has been found so far, said Muhebullah Sharif, an economic expert. "There are some institutions that can only expend 10 or 15 percent of their development budgets by the end of each fiscal year despite the fact that the spending of development budget has a direct impact on jobs, economic growth and poverty." Dearth of a proper system to monitor government institutions, poor development planning, and weak management have led to the underspending of development budget by the ministries, Sharif explained. The Ministry of Finance, however, argues that the expenditure of development budget is often low in the first and second quarters of the year, while it grows during the second half of the year. "The target we have specified for the development budget expenditure is 80 percent, and hopefully all entities will hit the target by the end of year," Ajmal Hameed Abdul Rahimzai, the MoF spokesperson, told The Heart of Asia. He stated that the finance minister has recently started holding a series of meetings with seven government institutions which possessed 78 percent of the country’s overall development budget to discuss their projects one by one. According to him, the seven institutions -- the ministries of Education (MoE), Public Health (MoPH), Rural Rehabilitation and Development (MRRD), Agriculture, Irrigation and Livestock (MAIL), Energy and Water (MoEW), Urban Development Affairs (MUDA), and Da Afghanistan Breshna Sherkat (DABS), the national power utility of Afghanistan -- were being encouraged to utilize their target budget. "The Ministry of Finance has streamlined the budgeting, and now we can execute the budget allocation of the ministries within a day, so it means there is no problem in this regard; however, we don't want ineffective projects. The effectiveness and efficiency of projects is our priority," Abdul Rahimzai continued. The ministries of Refugees and Repatriation and Borders and Tribal Affairs have reportedly spent five and six percent of their development budgets over the past eight months, while the ministries of Commerce and Information and Culture have each used up only seven percent of their development budgets. The MoF spokesperson, however, asserted that those figures were from three months ago, and their expenditure level has increased. He said it was right that the spending of development budget had a direct impact on unemployment, poverty and economic boost, but they have stepped up efforts to persuade the ministries to spend up to 80 percent of their development budgets.