Integrity Watch published its report on the National budget 2019 in a press conference on Sunday, December 23, 2018.
The total National Budget for 2019 is estimated to be AFN 399 billion (USD 5.3 billion) comprised of AFN 275 billion (USD 3.7 billion) for the Operating Budget and AFN 124 billion (USD 1.6 billion) for the Development Budget. Domestic revenues will fund 49% whereas foreign aid will make up 51% of the budget.
There have been significant improvements in the National Budget such as an improvement in the execution rate of the development budget and an increase in the revenues raised during the tenure of the National Unity Government.
However, there are inherent weaknesses in the budget decision-making process. Due to corruption, lack of public participation and political influence in the budget process, the increase in budget spending was not effective enough to reduce poverty and to boost economic growth Fundamental reforms to greatly increase the effectiveness of the national budget are critically needed given the threatened withdrawal of foreign forces and the likelihood of cuts in development and military aid.
Numerous mechanisms for the proper selection of development projects exist in the National Budget. However, those projects which are selected by the people do not get included in the National Budget whereas projects which are proposed by politicians and other powerful people are included. The National Budget is used by political and influential figures for their own interests rather than for national interests. In addition, it is believed that the government of Afghanistan has not properly considered the needs of women in the budget.
The National Budget has also undergone numerous revisions during the course of the fiscal year. For instance, the National Budget of the fiscal year 2018 increased from the initially approved budget of AFN 377 billion (USD 5 billion) to AFN 425 billion (USD 5.6 billion). The government has not provided meaningful explanations for these deviations. Changing the amount of the budget during the course of the fiscal year without the approval of the National Assembly gives the government an opportunity to misuse the budget finances. This results in the distribution of the budget finances among different Ministries and the Provinces being unbalanced. It also reduces the credibility of the budget.
To make the budget an effective tool to bring improvements in the lives of the people the government should ensure the participation of citizens at all the stages of the budget. The government can also double domestic revenues by fighting corruption, and by adopting modern and electronic ways for the collection of customs duties and tax collection.
Read our full analysis of Afghan National Budget 2019 here.