Integrity Watch: Government Should Cancel the Restructuring Decree of the Ministry of Finance

April 07, 2020—Kabul, Afghanistan: In response to President Ghani’s decree dated February 19, 2020 to restructure the Ministry of Finance, Integrity Watch expressed its concern over the decision which was made without consultation with major stakeholders including civil society, elected representatives, and donors. Integrity Watch welcomes the statements by government officials indicating that the government intends to consult with major stakeholders over this issue. However, the decree would reduce accountability to the people and their representatives and would risk further politicization of key fiscal functions if implemented as it is. According to the decree, three new independent government agencies would be established for revenue, customs, and treasury and budget directly reporting to the President.


Sayed Ikram Afzali, Executive Director of Integrity Watch, said, “The Ministry of Finance should have been restructured long back but the current decree by the government is not well informed as it was not consulted with major stakeholders. The creation of new independent authorities would reduce public accountability as the decree requires them to directly report to the President.” He stated that, “the role of the Ministry of Finance is unclear except for providing corporate services to the three newly established agencies.” The mandate to decide fiscal and economic policy that were erstwhile fulfilled by the Ministry of Finance is unclear also, he added.


According to Mr. Afzali, making customs and revenues semi-independent authority is long overdue to prevent political interference in these functions of the Ministry of Finance. While the new decree includes this, the policy, budget and treasury should have continued to be part of the Ministry of Finance. In addition, the customs and revenue collection functions must be protected against political interference by ensuring merit-based and transparent recruitment of its leadership and staff, transparency and accountability to the public through reporting mechanisms to Parliament and the Afghan people, and strong internal and external oversight among others. Unfortunately, the new decree does not emphasize any of these, Mr. Afzali added.


Furthermore, since the decree does not spell out any horizontal cooperation and coordination mechanisms between the three newly established agencies and the Ministry of Finance, a pervasive problem in the government could emerge in this sector too, namely, weak or lack of coordination. While an earlier decree that restructured the transport sector required the four new agencies, the Road Transport Authority, the National Road Authority, the Civil Aviation Authority and the Railway Authority to report to the Minister of Transport, this institutional arrangement has not been taken into consideration for the public finance sector.


Mr. Afzali concluded, “We welcome recent statements made by government officials to consult with all stakeholders before implementing any restricting of the Ministry of Finance. For clarity, we call on the government to cancel this decree and engage in a broad and meaningful consultations with stakeholders before any major decisions are made.”  Mr. Afzali emphasized that the changes to the structure of the government, including Ministry of Finance and other ministries such as Ministry of Energy and Water and Ministry of Mines should take place through amendment of the Basic Structures of the Government Law after appropriate consultation.


Note to editors:

The five-article decree was issued on February 19, 2020. The objective of the decree was stated to be the enhancement of public finance management and to increase the accountability of government to parliament and people. Article two outlines the creation of customs, revenues and budget and treasury agencies and obliges them to report to the President through the Administrative Office of the President. It also states that the MOF should provide human and administrative support to the new agencies. Article three, four and five obliges the Independent Administrative Reform and Civil Service Commission to revise Tashkeel, the Ministry of Justice to amend the relevant laws of all the relevant agencies and to provide a completion report within two months.


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