Three-quarters of foreign aid to Afghanistan does not go to the government, which hinders its ability to plan a budget and set priorities, the World Bank said Monday.
In a report issued in preparation for a Jan. 31 London Conference on Afghanistan, the Bank urged donors to direct more of their aid to the government instead of nongovernmental organizations.
That would help ensure budget sustainability and support the countrys long-term development, the report said. – Experience demonstrates that channeling aid through the government is more cost-effective, said Alastair McKenzie, the Banks country director for Afghanistan.
– To take one example, a basic package of health services contracted outside government channels can be 50 percent more expensive than the package contracted by the government on a competitive basis, he noted.
In addition, he said serving the government increases its credibility as it demonstrates its ability to oversee services and become accountable for results to its people and the newly elected parliament.
The report said Afghanistan has made considerable progress as it struggles to recover from more than two decades of war and economic neglect.
Among the achievements noted were “rapid economic growth, unprecedented primary school enrollments, rehabilitation of major highways, a new and stable currency, promulgation of a new constitution, presidential and parliamentary elections, return of refugees and demobilization of militias.”
The World Bank also said that for donors to have a greater willingness to funnel money through the government and other state bodies, all parts of the budget process need improving and corruption needs to be tackled.
As well as catching and prosecuting wrong-doers, the Bank argues that Afghanistan needs a program of far-reaching reforms to ensure the country has a solid public finance management system.
– Afghanistans development depends on building an effective and self-sufficient public finance system, said Stephane Guimbert, the World Banks country economist and co-author of the report. – A visionary medium-term framework is needed to ensure that the country moves toward a sustainable fiscal position, he said.
The World Bank report found that Afghanistan is struggling to keep track of development projects “over which it has no control and often little knowledge.”
Kabul must upgrade its budget procedures, including audits, and reduce the governments exposure to corruption before taking a fuller role in managing aid flows, the Bank said. “With Afghanistan facing immense needs in most sectors, prioritization is crucial,” the report said.
Kilde: www.worldbank.org
