a mof achievements · over the past four years, the ministry of finance has implemented widespread...
TRANSCRIPT
MOF ACHIEVEMENTSA
The book reflects over all achievements and activities of the Ministry of Finance since the establishment of the National Unity Government, which coincided with the beginning of the decade of transformation. The book consists of an introduction and five major sections, including collection ofdomestic revenues over the past four years, expenditure of development budget, reform and the fight against corruption, regional cooperation and international conferences and other major parts of the Ministry of Finance
The first section is devoted to the implementation of reforms, the fight against corruption and system building. The book tries to address the wide-ranging reforms that governments have taken in revenues over the past four years, the implementation of modern systems in offices, electronic workflow process, recruiting competent and committed people at the head of key agencies and building up the capacity of employees. The Fourth Assessment Review of the International Monetary Fund also explains Afghanistan›s financial and economic reform and highlights the economic indicators that have been evaluated by the fund.
In the second section, revenue resource management and an unprecedented increase in collection of domestic revenues have been discussed. Attempts have been made to compare domestic revenues with the last year of the previous government and over the past four years, which the audience canachieve exact and accurate information of increment in domestic revenues reading that and having a picture of the financial outlook of Afghanistan economic situation.
In the third section, reforms in of national budget, budget expenditure over the past four years and preparation of a providential budget through accelerating reform process have been discussed.
In the fourth section, private sector has been devoted as the engine of economic growth and public private partnership. In the fifth section regional cooperation and in the sixth section international achievements of the government have been discussed.
In this book, it is tried to reflect the major activities and achievements of Ministry of Finance in a systematic and comprehensive form in a package considering logical sequence. Within reading this
book, the respected author will find out detailed information regarding the financial and economic
status of Afghanistan a clear image of Afghanistan’s financial and economic outlook will be formed
in his/her mind.
At the end, all reader are kindly asked to accept our apologies if any mistakes have been made and
let the PR directorate know to solve the issue.
PREFACE
B MOF ACHIEVEMENTS
Ministry of Finance is one the key ministries of Afghanistan Cabinet charged with budgeting, implementa-tion of budget, collection and control of revenues, payment of government expenditures and salaries, control of state property and management of insurance and enterprises as well as chairing the High Economic Coun-cil. Ministry of Finance is required to set and coordinate International Community assistances and make them more transparent and effective for donors to provide more financial resources to help Afghanistan.
It is essential for each government to be informedof its income and expenditureto organize and effectively allocate its financial resource with the exact and accurate information available. The most important condi-tion for the success of a government is to avoid budget deficits. In order to avoid budget deficits, the propor-tion of revenues and expenditures should be considered and serious measures should be taken for its further adjustment that in one hand increase in revenue collection and on the other hand prevent idle costs. As you know, the major part of our budget is funded through international assistance; the Ministry of Finance man-aged to increase its influence over coherence and adjustment of international aid to Afghanistan and made efforts to attract international aid through governmental channels.
The main goal of Ministry of Finance is to reach to financial self-reliance, and a credible and comprehensive financial strategy is needed to reach to this goal. This means achieving social and economic goals in a sus-tainable way, avoiding excessive consumption, rejecting excessive aid, and using a large amount of available resource
To achieve the above goals, extensive reforms have been planned and implemented. The Ministry of Finance has been working over the past years to meet its financial activities in accordance with the international standards. To accomplish these goals, worked on establishment of human resources, planning and imple-mentation of policies and required reforms and serious action have been taken to increase the ministry staff capacity and to solve their problems. The aim of Ministry of Finance is to make the country’s financial af-fairs based on the economic criteria, to make Afghanistan stable, secure and self-reliance so that make use of treasury with accountability and transparency in order to meet the people needs.
Finally, Ministry of finance will be able to apply its presence in all domestic financial areas and increase its credibility so that inside the country, support the free market and business activities and outside the country assure international donors and investors that Afghanistan shall have an economic sound, self-reliant admin-istration.
The leadership of Ministry of Finance believes that by utilizing domestic resources of the country in a co-herent form, reducing unnecessary costs and managing national revenue better, we can adopt appropriate economic policies to consolidate economic foundation, establish lasting stability, and take the basic steps to achieve financial stability and economic self-reliance.
The book has attempted to reflect the activities of Ministry of Finance in a precise form in a regular and proper package during the past four years to inform the compatriots, media, elites, politicians, experts and especially representatives of private sectors, investors and taxpayers. In this book, it is tried to present the topic in a simple, attractive and in an eloquent language to audiences in order to implement one of commit-ments made by the leadership of Ministry of Finance to provide elites and public to have access to data and information. At the end, all readers are kindly asked to put us in the picture you have any comments and suggestion to improve work.
INTRODUCTION
C MOF ACHIEVEMENTS
CONTENT
Implementation of Reforms, fight against Corruption and
Systemization
1
Implementation of Reform in Revenue And Customs Units 3
Installing Comorehensive Electronic System in Revenue
Resoursces
9
Assessment of International Monetary Fund And Economic
Reform of Afghanitan
10
Comparsion of the National Budget, Over the Last Four Years 12
Comparison of National Income Collection over the past Four
years and its Effects of Economic Growth
13
Arrnging prospevtive Budget through Expandin the Reform
Process
15
Conparsion of the National Budget, over the last Four Years 17
National Budget of Afghanistan for the Fiscal Year 2018 19
Arranging Prospective Budget through expediting the Reform
Process
19
Private Sector: Stimulator of Economic Growth 20
Exploiting the Capacities in Public-Private Engagement for
Major Economic Projects
21
Law, Regulation, Policy, Contracts and Other Standard
Documents of Public-Private Partnership
22
Investment and Communication Plan 23
Public-Private Partnership Projects 24
Management and Effectiveness of Business and Economic
Bilateral Cooperation Committees with Regional Countries
30
D MOF ACHIEVEMENTS
Regional and International Cooperation32
Brussels Conference34
Joint Coordination and Monitoring Board (JCMB)37
Senior Official Meetings (SOM)38
Warsaw Security Conference39
Obtaining Permanent Membership of Asian Infrastructure
Investment Bank (AIIB)
39
The total contribution of multilateral Institutions41
Other Achievements of the Ministry of Finance42
Government Property Management49
Major achievements of the Treasury General Department50
Photos55
IMPLEMENTATION OF
REFORMS, ACTION
AGAINST CORRUPTIONS
AND SYSTEMIZATION
2 MOF ACHIEVEMENTS
Action against corruption is one of the important priorities of Afghan Government and Ministry of Finance. This ministry has always been committed and attempted for facilitating reforms and reducing administrative corruption. Under the current circumstances, foreign aids to Afghanistan are condi-tional to reforms and fighting corruptions.
Over the past four years, the Ministry of Finance has implemented widespread reforms in revenue resources, implementation of modern systems in administrations, digitalization of work processes, recruitment of qualified and committed people at the head of key departments and capicity building of staffs in administrations.
Moreover, in order to reduce administrative corruption, while focusing on the modernization of the systems in administrations and reforming the revenue resources, the staff involved in corruption have been terminated and referred to justice and judiciary sectors. In the past four years, six people involved in corruption have been introduced to justice and judiciary sectors, and they have been held in custody by court order. In addition, there are a number of accusation cases, currently under the judicial and justice prosecution.
The Ministry of Finance has prepared and implemented a public finance management and reform plan to fight corruption. This plan includes detailed description of activities of the Ministry of Finance for the next five years. According to this plan, the Ministry of Finance and the Government of Afghanistan have been contributing to the identification of reasons for emergence and development of corruption and implementation of practical measures in the areas of reducing and fighting corruption, in the re-cent years.
General Directorates of Customs and Revenues are the key income resources for the Afghan Govern-ment and are crucial to maintain country’s financial system. The growth of domestic stable revenues and gradual self-sustainability are the main goals of this ministry.The implementation of comprehen-sive SIGTAS and ASYCUDA Electronic Systems in revenues and customs has accelerated administra-tive processes and reduced bureaucracy and corruption. In recent years, the Ministry of Finance has implemented many reforms, such as installing scanners and high tonnage scales, digitizing custom processes and exchanging customs information with regional countries.
Financial reforms, administrative modernization, seriously fighting against corruption, implementa-tion of tax laws, and prevention of tax evasion have caused the Ministry of Finance, in the recent years, to collect more than the targeted revenues, despite the fact that trade was in recession and no significant recovery was estimated about the sector at the time. Various reports from World Bank, In-ternational Monetary Fund (IMF) and other reputable institutions have also endorsed and pointed at the financial and economic achievements of the Ministry of Finance, in recent years.
Over the past four years, the national income ceiling has risen from AFN 99 Billion to AFN 170 Bil-lion. If we compare the average of figures for national income collection over the past four years and display it in a graph, it would show an increase of fifteen to twenty percent.
Another part of the reforms includes revision of the petroleum exemption process, modifications of the customs laws in accordance with the new requirements and conditions, electronic payment and transfer of the customs police from the structure of the Ministry of the Interior Affairs to the structure of the Ministry of Finance for better management and control in borders.
In order to expedite the process of sending official letters and maintain important financial documents,
3 MOF ACHIEVEMENTS
the Electronic Finance Archive of the Ministry of Finance has been established. This archive will consider transparency in the storage of documents and sending official letters. It would also pre-vent the fabrication of documents, which is a major step for fighting corruption.
As the continuation of foreign aid to Afghanistan is conditional on reform and fighting corruption, the ministry has taken the above measures to implement reforms.
This reform includes three major parts.
Focus on systemization and modernization of administrations;
Reforms in revenue resources;
Dismissal of people engaged in corruption, and introducing them to judiciary and justice organs.
IMPLEMENTATION OF REFORMS IN REVENUES AND CUSTOMS UNITS:Revenues and Customs Units of the Ministry of Finance, which play a vital role in maintaining country’s financial system, are at the forefront of the reform agenda of this ministry. Sustain-ability of domestic revenue is the base for the long-term prospect of the Ministry of Finance. As Afghanistan needs to continuously strengthen and promote the process of gradual self-reliance and dependency on domestic resources, a series of measures have been taken not only to address them, but also to ensure the transparency and efficiency of the revenue and customs units. These measures are breifly presented bellow for your information:
Diagnostic Assessment and Planning for Customs Modernization
Afghanistan Customs Department (ACD) became a member of the World Customs Organization (WCO) in 2004. For the first time, this department has provided a direct link with World Customs Organization in 2016 and implemented Diagnostic Assessment and Planning Program for cus-toms modernization.
Establishing a complaint committee and activating hotline and complaint box for traders and clients
The Complaint Committee is one of the international standards for customs; the Ministry of Fi-nance has established and practically deployed the Committee to deal with protests and com-plaints of traders.
Memorandum of Understanding on Cooperation and Exchange of Customs Information with the Department of Petroleum and Liquid Gas
Since petroleum is one of the major items imported to the country, a memorandum of understand-ing is arranged with the Department of Petroleum and Liquid Gas for better coordination and reduction of administrative corruption. This MoU would be signed and implemented as soon as possible.
MOF ACHIEVEMENTS4
Electronic Payment System (e-pay)
In the past, Afghan Traders were faced with the difficulty of paying customs duties in most of the customs, due to lack of bank branches. Ministry of Finance has implemented e-pay in all of the customs for facilitating the process of paying customs duties.
Opening and Activation of Academy of Customs and Revenues:
Now on, individuals, who have obtained their professional training in the Academy of Customs and Revenues and received their graduation certificates, would be recruited in the customs and revenues departments of the Ministry of Finance which will be highly effective and efficient act in terms of professionalization, standardization, transparency and facilitation of the process.
Furthermore, the petroleum exemption process has been revised, customs have been imposed on tools, scanners and high tonnage scales have been equipped, ASYCUDA System has been imple-mented, customs code has been modified, customs tariffs have been adjusted with the standards of the World Customs Organization (WTO), the implementing plan of port transformation was pre-pared to the Ministry of Finance and guidelines are prepared for vehicles that do not have customs documents.
Attracting Aids and Signing Justified Arusha Convention:
During the last one year, the Customs Directorate has been able to receive $80 million development aids for the next five years from the World Bank and USAID. This aid will be used in development and standardization parts of the Customs.Agreement of Cooperations and Exchange of Customs Information:
This agreement is signed with the Customs Directorate of Tajikistan for maintaining transprancy. Moreover, diplomatic discussions are started with the customs directorates of Iran, United Arab Emirates and Pakistan.
Memorandum of Understanding (MoUs) with Internal Administrations for Improving Prac-tices:
Agreement of cooperation has been signed between Ministry of Finance and General Directorate of National Security for controlling the borders of the country.
Reforms and Establishment of New Customs Systems:
- Implementation of ASYCUDA World System instead of ASYCUDA Plus System
- Implementation of Foreign Transit Module (T2)
- Implementation of Domestic Transit Module (T1)
- Implementation of Risk Management Module
- Implementation of Pricing Module
5 MOF ACHIEVEMENTS
- Implementation of online reporting and statistics systems from ASYCUDA by competent individuals
Transferring Ports from the Ministry of Commerce and Industry to the Ministry of Finance: Twelve ports, which were previously operating under the Ministry of Commerce and Industry, were approved to be transferred from that ministry to the Ministry of Finance in accordance with the approval documents no. 25 and no. 41; whereby, the General Directorate of Customs organized implementing plan, Committees responsible for transfer and job descriptions for the ports. Seven ports (Islam Qala, Nimroz, Meel 78, Spin Boldak, Torkham, Gholam Khan and Ay Khanum) have been fully transferred and the remaining ports are still transfering. In addition, recruitment of the third-party auditor company would be done during the provisions for checking financial accounts of the ports.
Strategy and Policies Development
During the last one year in 2016, the General Directorate of Customs could develop 3 policies and 1 strategy of fighting administrative corruption; this directorate could specifically develop the policy of preventing Infringement, policy of risk management, policy of participation in international trips, strategy of fighting administrative corruption, especially in customs sector, and revision of the policy of human resources.
Transfer and Integration of duty and border customs:
Transfer and integration of duty and border customs are the main priorities of the General Direc-torate of Customs; its initial survey and evaluation has been started and the board members of the general directorate has traveled to several customs; where integration and transfer would be eventu-ally implemented.
Moreover, it is worth mentioning that duty custom of Farah Province is already integrated with border custom of Abu Nasar Farahi.
Activation of Risk Management Assessment (RMA)
Risk Management Assessment has been activated to identify the properties in yellow, red, and green pathways, some of which would tend to move toward red route based on the assessment, in the near future.
Updating Pricing Database
The pricing database that was prepared long ago has not been updated for a long time and a large amount of prices of things, which were not used for several years, were also there. Thus The Gen-eral Directorate of Customs locked the price, 28000, of such things after identifying them; its up-dating is in progress.
MOF ACHIEVEMENTS6
Implementation of Diagnostic Assessment as Customs Actions and Preparing Strategic Plan Based on thatWorld Customs Organization (WCO) has undertaken a diagnostic and planning assessment to modernize Customs so that it would be harmonized with the world-wide standard. The report and a specific proposal of this assessment have been presented to the leadership of the Ministry of Finance and the General Directorate of Customs for im-provements. Then authorities were assigned by World Customs Organization (WCO) to visit the General Director-ate of Customs of Afghanistan for funding and supporting the translation of customs documents, handing electronic training management directly to the customs, creating and funding required job positions for customs.
9 MOF ACHIEVEMENTS
INSTALLING COMPREHENSIVE ELECTRONIC SYSTEMS IN REVENUE RESOURCES;
One of the achievements of the Ministry of Finance is the installation of comprehensive electronic systems in revenue resources, such as installing ASYCUDA System at the Afghan Customs Office and SIGTAS System at the Department of Public Revenue, which have pro-vided great facilities in administrative affairs and revenue collection. Because of these ac-tivities, higher revenues were collected than the ceiling targeted by International Monetary Fund (IMF), over the past fiscal year. Moreover, these systems have also helped to reduce corruption and bureaucracy in offices.
The Ministry of Finance has implemented ASYCUDA system in customs to facilitate trade and business deals as well as provide facilities for exporting goods.
Provision of the country’s customs with advanced systems, including ASYCUDA system, has provided good coordination between Afghanistan and other countries of the region and it has been making e-governance possible, besides significantly reducing the problems associ-ated with exporting and importing goods and facilitating the necessary speed for providing services to the people. In addition, by installing this system on the border customs of the country, paper documentations have been processing very quickly and easily; bureaucracy and corruption caused by the process of administrative time-consuming paper documenta-tions have decreased significantly.
On the one hand, Afghanistan customs are responsible for implementing the complicated rules and regulations dominant on Afghan Trade, which are still based on classic and manual methods; on the other hand, it is required to consider streamlining the procedures of customs electronically in accordance with the policies of the World Trade Organization and World Customs Organization. Therefore, the General Directorate of Customs, which operates with-in the framework of the Ministry of Finance, implemented this system at Kabul Customs Directorate and some border customs departments with a comprehensive effort. This system includes a computerized system of management that covers most of the international trade methods. It manages customs declarations, lists of commercial shipments, methods of ac-counting and transit, electronically without interference of simple hand-operated methods and use of paper and pen.Today, the responsibilities of customs are far beyond the control of exports and imports. They cover a wide range of tasks, including monitoring the quality of exports and imports, public health protection, preserving historical and cultural heritage, environmental issues, preventing and combating smuggled trade goods, creation of a frame-work for legitimate trade, fighting against money laundering, and development of trade with other political entities.
In order to adapt to the fast-growing changes associated with globalization and digital revo-lution, the Ministry of Finance of Afghanistan has been taking steps to create e-governance that could respond to the current needs of the country in relationship with economic and
MOF ACHIEVEMENTS10
trade exchanges with its neighbor and transnational countries. The ministry has also taken a series of steps inside the country towards raising national income and reforms in order to achieve its goals of gradual financial stability.
ASSESSMENT OF INTERNATIONAL MONETARY FUND (IMF) FROM FINANCIAL AND ECONOMIC
REFORM OF AFGHANISTAN;
During comprehensive technical discussions between the Ministry of Finance and the Inter-national Monetary Fund (IMF), the financial and economic reforms of Afghanistan, which were made during the last 4 periods under the Extended Credit Facilities (ECF) Program, have been considered successful. Additionally, economic and financial achievements of the Afghan government was also highly regarded.
During these discussions, government’s commitments for facilitating reforms in financial sec-tor, large economic framework, national income collection, customs reform, transparency in the consumption of national funds, banking sector, fighting corruption, maintenance of cur-rency rates, good governance, strengthening the private sector, economic growth and employ-ability were discussed.
Consequently, board members of International Monetary Fund (IMF) ensured their continued assistance by expressing appreciations for the implementation of reforms and commitments under this program.
A GLANCE AT FINANCIAL
SITUATION OF THE COUNTRY,
OVER THE LAST FOUR YEARS
12 MOF ACHIEVEMENTS
Four years ago, the general outlook for the financial situation of Afghanistan was dark as the eco-nomic situation was fragile and trade was in recession; even the government was not able to pay employees’ salaries from the regular budget. The existence of administrative corruption caused many problems for economic activities and investments in the country; tax evasion and bureau-cracy in the offices had caused a part of the national income to be embezzled by special groups, therefore Afghanistan faced a deduction of AFN 21 billion in revenue collection.
COMPARISON OF NATIONAL INCOME COLLECTION OVER THE PAST FOUR YEARS AND ITS
EFFECTS ON ECONOMIC GROWTH;
In 2014, the national income was AFN 99 billion, which had 21 billion decrease from the set target. In the contrary, collected national income in 2015 and 2016 were even higher than the set target in the National Budget Document. In fiscal year, 2015, the set target in the National Budget Document was AFN 114 billion, but more than AFN 122 billion was collected, which shows more than 8 billion increase, compared to the target.Similarly, in the fiscal year, 2016, the target set in National Budget Document was AFN 132 billion, but AFN 165 billion was collected, which shows an increase of 33 billion, compared to the target.
In 2017, the target of AFN 152.5 billion was set in the National Budget Document. Consequently, the amount of AFN 169.133 billion was collected up to the end of the fiscal year.
Looking at the figures above, we can find out that better management of tax collection has con-tributed to economic growth of Afghanistan. After a massive decline in 2014, national income of Afghanistan is now being collected and managed in a desirable manner for the fourth consecutive year; therefore, economic growth of Afghanistan increased from 1.3% to 2.3%. This economic growth will continue to increase by as much as 3.6 percent if the political and economic situations continue to remain the same as present, until 2020.
Comparison of National Revenues in Last Five Years
FY: 2
015
FY: 2
016
FY: 2
017
-20
120
99
114122
8
132
165
33
152
16
169
-50
0
50
100
150
200
99
172.5
189
17
FY:
201
4
FY: 2
018
13 دست آورد های سال ۱۳۹۷
National Income Situation in 1397 Fiscal Year;
This year, the target set in National Budget Document for collecting national income is AFN 172 bil-lion. According to the latest reports, revenue collection Consequently, the amount of AFN 189 billion was collected up to the end of the fiscal year, which shows an increase of 17 billion, compared to the target.According to the Leadership of Ministry of Finance, if national income collection is managed properly, the national income of the country could increase substantially.
Reforms in Organizing National Budget;
The government of Afghanistan is committed to the transparency and accountability of the Public Finance Department; managing financial resources received from the Afghan people is one of the most important responsibilities that the Afghan government is facing. Collecting national income and donations received from donors belong to the people of Afghanistan. The government has been entrusted with these resources and one of its most serious responsibilities is to invest these sources in the sectors that would have the most benefits for the country and the people.
The government of Afghanistan consider itself accountable to the people; the principle of ac-countability requires that the government should organize the national budget in accordance with the needs and priorities of the people and allocate the national budget in those areas that have the most effectiveness and efficiency.
Since global aid to Afghanistan is conditional to bringing reforms and a large portion of the national budget comes from donors and international partners of Afghanistan; over the past few years, the Ministry of Finance of Afghanistan has made extensive reforms and imple-mentations to financial and budgetary policies in order to achieve financial stability and reach gradual self-sufficiency.
Over the past years, the Ministry of Finance has been able to organize national budget in a fundamental, balanced, accountable and credible way that would consider community re-alities, effectiveness, financial facilities, implementation of a credible framework for costs, government priorities and international standards. Additionally, efforts have been made to increase the share of Afghanistan for funding the national budget, as the development bud-get of Afghanistan has been largely dependent on global aid, which also affects the role of ministries in determining, allocating and prioritizing development projects. To resolve this problem, the Ministry of Finance of Afghanistan has tried to increase its role in funding the budget, after widespread financial reform and rise of national income one after another as economic growth. On this basis, the government implemented a series of reforms and a finan-cial discipline as following:
- bringing efficiency and efficacy in costs;
- avoid wasting ordinary costs;
- Attention on services, not on high consumption;
- Accelerating the process of achieving the goals of self-sufficiency for Afghanistan;
MOF ACHIEVEMENTS14
- Budget allocation based on consumption capacity;
The above reforms led a significant increase in government’s contribution to national budget funding; the contributions made by the government to national budget funding raised from 38 percent to 47.5 percent, over the past years.
COMPARSION OF THE NATIONAL BUDGET, OVER THE LAST FOUR YEARS;
By understanding its responsibilities toward spending budgets that leads to the country’s de-velopment and people’s prosperity, the Ministry of Finance has consistently held meetings to increase spending the budgets and ensuring effective implementation of projects with donors and budgetary units (those with the highest budget). The ministry has been also conducting video conferences with provinces and monitoring the process of spending budgets in major national projects, which contain 62% of the whole development budget. In addition, techni-cal teams of the Ministry of Finance and National Procurement Authority (NPA) held regular meetings with the technical teams of different departments to address the technical barriers for spending budgets. Therefore, the time for processing allocations has been reduced to 48 hours; a number of allocations have even been processed within 24 hours. In order to ensure transpar-ency and consistent accountability, reports on the spending budgets of the departments have been sent to Cabinet and National Council, and it has become publicized by media. In addition, the principle of rewards and punishment of employees of the Ministry has been implemented, which has considerably increased budget spending.
Over the last four years, the Ministry of Finance has managed to increase budgeting from 64% to 94.4%. In addition to budgeting, efforts have been made to improve the effectiveness and efficiency of the budget. This way, the Ministry of Finance was able to spend 46.4% of the development budget in 2014, 64% in 2015, 82% in 2016, and 95% in 2017.
Consumption Graph for the Development Budget of the Ministry of Finance, Over the Last Four Years
FY: 2
014
FY: 2
015
FY: 2
016
FY: 2
017
20
40
60
80
100
46
64
82
94
FY: 2
018
95
15
انکشافی به سطح حکومت 3: فیصدی مرصف بودجۀ چارت
FY: 1
393
FY: 1
394
FY:1
395
FY: 1
396
20
40
60
80
54
4444
67
FY: 1
397
91100
MOF ACHIEVEMENTS
According to optional and non-optional funds report of the fiscal years 2014 to 2017, the development budget consumption, in the state level, was 44% in 2014, 53% in 2015, 54% in 2016, and 67% in 2017. The state-level development budget consumption, for last four years, is shown in bellow graph.
National Budget of Afghanistan for the Fiscal Year 2018;
ARRANGING PROSPECTIVE BUDGET THROUGH EXPEDITING THE REFORM PROCESS
The national budget for the year 2018 shows major changes in the Afghan government’s ap-proach toward financial planning. This year, for the first time, the government will provide a medium-term national budget that includes regular and developing funds, based on the best international practices.This budget has been provided by presenting information on both, the year 2018, previous years, and future forecasts including details based on the ministry, project and province in accordance with “International Standards”.The Ministry of Finance has been striving to be realistic about allocating money according to what ministries actually need to spend. Now, the ministry has also disregarded transferring unused funds to the next year. The Ministry of
MOF ACHIEVEMENTS16
Finance has also made efforts to reduce the amount of unallocated fund kept as caution. The Ministry of Finance explains that the goal of these measures is “to reduce corruption and pro-vide funding as an effective tool for national development”.This budget is arranged to address two major difficulties that the Afghan government has been facing:
First, the amount of international aid to Afghanistan is decreased and it is still expected to decrease further in the coming years. This is a decline in a country that strongly relied on for-eign aids. Second, considering the current financial and economic risks for the budget of the year 2018, a mid-term financial perspective should be presented to create a relative financial sustainability for the next four years, as an alternative option for potential termination of in-ternational assistance.
The mid-term fiscal framework shows that the national budget for the fiscal year 2018 has more financial constraints than the previous years. After years of budgeting beyond the limits and consuming less than needs, fiscal budget of 2018 shows that the government will do the budgeting by using the equivalent of current in-hand funding resources.
In the process of national budget arrangement, efforts have been made to provide a transparent, accountable and credible budget that would consider community realities, efficiency, financial facilities, implementation of credible financial frameworks, government priorities and interna-tional standards.
The total fiscal budget for the financial year 2018 is amounted AFN 377,011 billion; this amount includes 266,133 billion regular budget and 110,878 billion development budget. The government’s share of funding is 47.5% of the total and the rest is funded by aid.
Government priorities for the budget plan of the fiscal year 2018 include security, education,
52%
47%
funded by aid.
The government’s share of funding
17 MOF ACHIEVEMENTS
infrastructure, agriculture and development sectors. A major part of the development bud-get is devoted to four sectors (infrastructure, agriculture, rural development, health and economic sustainability).
Government priorities for the budget plan of the fiscal year 2018 include the security, education, infrastructure, agriculture and rural development sectors, respectively for the allocations, 40%, 13%, 11% and 9% from the total of the budget.
The forecast made by the Ministry of Finance explains that the National Budget of the
%13
%9
%40
%11
Chart 4: Government Priorities in the FY 1397 National Budget
year 2018 will increase consumption from 85% to 90%. This means that we will witness new schools, irrigation systems, and fully constucted highways in all provinces.
The national budget for the next financial year is far more beneficial and prospective, and has a key role in increasing government accountability. The current leadership of the Ministry of Finance has started working on the new format of the budget from the time of joining the Ministry; the National Budget Document of 2018 is now developed in new format, according to GFC International Stan-dards Model.
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PRIVATE SECTOR:
STIMULATER OF
ECONOMIC GROWTH
21 MOF ACHIEVEMENTS
One of the mutual commitments of the Afghanistan Government and International Commu-nity is to grow and strengthen the private sector and use the common capacities of government and private sector in the major national development projects.
The private sector is the base pillar of national stability, engine of economic growth and tool of inclusive society. The mutual cooperation of the International Community and Govern-ment of Afghanistan is a key factor in achieving a sustainable economic growth. In addition, providing equal access to economic resources and services is one of the major responsibilities of the government. Currently, the private sector does not play a significant role in the imple-mentation of large projects. Private sector accounts for 10%-12% of the official gross of the domestic products. This is a mixed result of long-lasting wars, foreigners’ intervention and dependency on foreign aids.
The government is working to exploit stable and long-term economic growth from key areas such as trade, transit, agriculture, and mining industries.
EXPLOITING THE CAPACITIES IN PUBLIC-PRIVATE ENGAGEMENT FOR MAJOR ECONOMIC
PROJECTS;
The Ministry of Finance intends to implement large-scale economic projects by using Public-Private Engagement method. This method is considered as one of the most successful methods in the contemporary world, which on the one hand, promotes the growth of private sector and on the other hand, provides a platform for investment in large-scale economic projects.
National Policy of Public-Private Partnership was approved by the Cabinet of the Islamic Republic of Afghanistan in 2017. Central Partnership Authority has been created in ministries and private sector to provide advice on diagnostic issues, preparation, registration, devel-opment, management, and monitoring of Public-Private Partnership Projects. Furthermore, Public-Private Participation Guidelines are also being developed to assist the Central Partner-ship Authority in assessing the plans, feasibility studies, contracts arrangement, bidding docu-ments, and monitoring Public-Private Partnership projects.
The Central Partnership Authority, with 30 job positions,was added into the framework of the Ministry of Finance with the decree of Islamic Republic of Afghanistan on August 15, 2016.The purpose behind creating this administration is regulating the policy, providing legal framework, consultation and coordination, capacity building in the Public-Private Partnership Sector, project analysis and evaluation, providing technical facilities for the departments, and processing and development of Public-Private Partnership.
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Central Partnership Authority is the Office for Leading and Managing Public-Private Part-nership, based on the principles of law and the Public-Private Partnerships Policy, which includes good governance, value of money, allocation of risks, financial capability, con-sumer protection, transparency, competition, local capacity development and technology promotion, environment and social security, consultation with engaged parties, public inter-est, and Public-Private Partnership program. Public administrations will implement collab-orative projects across the country, in accordance with the key principles of public-private partnership. Additionally, any kind of political decision-making and intervention would be prevented in the process of Public-Private Partnership Program and cooperation would be made for the implementation of the program with due respect to the role and responsibilities of the institutions in administrative framework.
As global experiences have shown, most countries have set up different plans for better im-plementation of Public-Private Partnership Programs. In a number of countries, these plans are referred as Four-Dimensional Plan, Five-Dimensional Plan, and Eight-Dimensional Plan. Based on international experiences and considering current situation of Afghanistan, the General Authority of Public-Private Partnership of the Ministry of Finance has arranged a Ten-Dimensional Plan for better implementation of Public-Private Partnerships Program, which we will discussed in details, below:
LAW, REGULATION, POLICY, CONTRACTS AND OTHER STANDARD DOCUMENTS OF PUBLIC-
PRIVATE PARTNERSHIP
The actions that have been taken in this regard by the General Directorate of Public-Partner-ship are as follows:
The first Public-Private Partnership law was approved by Afghanistan constitution (Article 79), and was published in official gazette by decree of the President.
It is noteworthy that the Public-Private Partnership Law was revised and finalized with the coordination of the Ministry of Justice and in the light of the IMF’s views and suggestions. The amended Public-Private Partnership Law including (8) Chapters and (63) Articles was approved and endorsed by the Cabinet of Ministers and it has been considered valid from the endorsement date.
Moreover, the rules for Public-Private Partnership are finalized based on universal accep-tance of the experience and recommendations of the International Monetary Fund, with the coordination of the Ministry of Justice and all government departments; it is also included
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List of Ongoing Projects
No. Name of the Project Amount of Investment
1 Second Phase of Kajaki Dam Hydropower Plant in Helmand Province
USD 175 Million
2 Natural Gas Power Plant of Bayat Power Project
USD 39 Million
3 Mazar Natural Gas Power Plant (Ghazanfar Group)
USD 75.03 Million
4 15 Megawatt Electricity Production from Solar Power Plant in Kandahar by Com-pany, 77
USD 39 Million
5 15 Megawatt Electricity Production from Solar Power Plant in Kandahar by Zo-larstan Company
List of Projects with Approved Feasibility Studies
No. Name of the Project Amount of Investment
1 Ali Janah Hospital Project USD 13.9 Million2 Jamhoryat Hospital Project USD 44.1 Million3 Diagnostic Machines Installation Project
in Shaikh Zahid and Wazir Akbar Khan Hospitals
USD 3.65 Million
4 Project of 5 Slaughterhouses in Kabul, Herat and Mazar Provinces
USD 30 Million
5 Bagh Dara Dam Project USD 562.2 Million6 Naghlo Solar Power Plant Project USD 185 Million7 Phase 2 of Sorobi Dam Hydropower Plant
ProjUSD 335 Million
8 Project of 40 Megawatt hybrid solar plant at theHisar-e-Shahi Industrial Park (HIP), Jalalabad
USD 60 Million
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List of Ongoing Projects
The Government of Afghanistan has currently signed five Public-Private Partnership Projects in cooperation with the relevant administrations and the leadership of the ad-visory infrastructure of the Islamic Republic of Afghanistan; they are currently being implemented.
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List of Ongoing Projects
The Public-Private Partnership Policy has been approved by the Government of the Islamic Republic of Afghanistan through document number 14in02/03/2017 (1395/12/12), and it is currently valid.
INVESTMENT AND COMMUNICATION PLAN;
Strategies and list of potential partnership projects as well as the most appropriate and prior-ity sectors have been planned and developed for Public-Private Partnerships and they have been shared with all relevant agencies to provide feedback. In addition, a five-year plan and Public-Private Partnership Interaction Plan was developed based on Public-Private Partner-ship Policy that reflects national plans.
ADMINISTRATIVE PROCEDURES AND PROCUREMENT PROCESS;
The actions taken in this part are as follows:
Detection and arrangement criteria, evaluation methods, approval and confirmation proce-dures for Public-Private Partnership Projects, and appropriate methods for Procurement of Public-Private Partnership Projects have been identified and deployed.
The project designs that the Public-Private Partnership General Authority has received since the start of the activities are composed of 5 sectors: 1- Primary sector 2- Service sector 3- Electricity sector 4- Production sector 5- Transport sector. They are prioritized according to the following criteria:
ü Coordination with National Programs and Strategies
ü Economic growth
ü Business Opportunities
ü Enthusiasm of Private Sector
ü Funding Resources
ü Legal Framework
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List of Projects with Approved Project Designs
No. Name of the Project Amount of Investment
1 Construction of household supply system in 12th and 22nd Districts of Kabul City
USD 56 Million
2 Driving Licience Distribution Plan USD 10 Million3 Management of solid wastes in Kabul City USD 400 Million4 Plan of Precious Stones Market USD 10 Million
List of Projects with Project Designs, Ready for Approval
No. Name of the Project Amount of Investment
1 Building Bus Stations in Kabul City USD 1.2 Million2 Collecting Transport Camasion of High-
ways in Afghanistan USD 5 Million
3 Building parking lotsin Kabul City USD 4 Million4 Converting Analog System to Digital Sys-
temUSD 25 Million
5 Building 100-bed hospital in Kabul City USD 11 Million6 Technical Feasibility Plan and Study of
Qala Mami Dam USD 1.4 Billion
7 30 Megawatt National Kabul Solar Power USD 31 Million8 Promoting Kardan University USD 21 Million9 Saray Zahir Shahi and Madina Market USD 7 Million10 10 MW Farah Solar Power USD 10 Million11 Establishing Construction Material Testing
Laboratory in AfghanistanUSD 25 Million
Public-Private Partnership Projects;
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GENERAL FRAMEWORK OF GOVERNANCE: All the projects directed to Public-Private Partnership Authority will be registered, based on the Public-Private Partnership registration form. Then the Public-Private Partnership Authority will review the project plan and share its views with the relevant administrations. When the final design is made, its presentation including the opinions and suggestions of the Public-Private Partnership Authority, will be submitted to the Supreme Economic Council. The public or private project plans will be confirmed or rejected in consideration of the views and suggestions of the Public-Private Partnership. When a partnership project plan is accepted for a large-scale project, initial feasibility studies and detailed feasibility studies of projects are being done and presented to the Supreme Economic Council and the Cabinet of the Islamic Republic of Afghanistan for confirmation and approval. In addition, it is noteworthy that the decision-making for large-scale projects is doneat the level of Supreme Economic Councilas well as the Cabinet of the Islamic Republic of Afghanistan.
DEVELOPING PUBLIC-PRIVATE PARTNERSHIP UNITS;
The Public-Private Partnership Framework including the Central Partnership Authority is a policy maker, and facilitator within the Ministry of Finance, public-private partnership units and other administrations.
Worldwide experiences have shown that in a number of countries, the Central Partnership Authority is functioning independently. In a number of other countries, it is directly super-vised by the president, and in the majority of the countries of the world, the it is working under the framework of the Ministry of Finance. Therefore, Public-Private Partnership Au-thority has been established within the Ministry of Financein Afghanistan considering the global experiences.
BUILDING CAPACITY AND EXPERTISE IN THE PUBLIC SECTOR;
Considering the requirements of General Directorate of Public-Private Partnership and its departments in various capacity-building programs has been carried out for the officials and staff of these departments inside and outside the country.
The General Directorate of Public-Private Partnership has held 6 international training pro-grams and 40 domestic training programs in order to work on capacity building in countries such as South Korea, Turkey, India and Dubai. Initial training programs have been designed in basic level in order to help the authorities and department staffs learn Public-Private Part-nership affairs and international experiences in this field.
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Building Capacity and Expertise in Private Sector;
Required measures of this section are as follows:
One of the major problems that the government of Afghanistan has been facing is the lack of full knowledge of the private sector about the Public-Private Partnership at Af-ghanistan level. Therefore, the Public-Private Partnership Authority has held various training programs on introduction of the legal framework and policy, introduction of the Public-Private Partnership process, and offers made by the private sectors, both inside and outside the country.
The Public Private Partnership has planned various programs to build capacity and ex-pertise in the private sector, with the cooperation of the Chamber of Commerce and Industry of Afghanistan.
Funding and Fiancial Support;
The facilitation of funding options, financial support and appropriate allocation of risks take place between the public and private sectors for infrastructure projects. The re-quired measures in this section are as follows:
In order to provide funding and financial support for Public-Private Partnership Projects and to encourage and attract private sector investment, the Public-Private Authority has considered financial incentives and support of the partnership, based on legal frame-work. It will help the private sector to increase its investment in the country and gain the trust of the government in the field of investment.
ü Providing easy loans
ü Guaranteed repayment of loans
ü Providing direct financial assistance, including tariff supportive measures, without recapturing it
PROVISION OF GUARANTEES AND INSURANCE;
It encompasses various types of government insurance and guarantees in order to better implement Public-Private Partnership programs throughout the country.
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Considering the provisions of the Public-Private Partnership Regulation, the Ministry of Finance can provide or facilitate the following guarantees and commitments for a project that applies to the private sector:
The responsible party of the partnership (based on the agreement) would fulfill the ob-ligations for monetary payments. This includes compensations based on the partnership agreement.
MANAGING AND MONITORING THE PROCESS OF PUBLIC-PRIVATE PARTNERSHIP;
This dimension includes managing and monitoring the public-private partnership process in Afghanistan.
The Government of Afghanistan is committed to a fully transparent process in order to ensure that the partnership information and implementations are publicly available. This can help the government to be accountable for independent audit agencies and public, in managing partnership program.
ACHIEVEMENTS OF THE SUPREME ECONOMIC COUNCIL:
The main objective of the High Council for Economic Policy is to determine policies and implement reforms to ensure prosperity and economic development, as well as to arrange national budgets in line with reform programs and government priorities for working with the private sector and attracting investment in different sectors. The Ministry of Finance acts as the secretary of the Supreme Economic Council and is responsible for regulating and prosecuting decisions of the Supreme Economic Council.
THE SUPREME ECONOMIC COUNCIL HAS TAKEN 618 DECISIONS IN 37 MEETINGS FOR
FINANCIAL AND ECONOMIC POLICIES THAT ARE BRIEFLY MENTIONED BELLOW:
In agriculture sector, professional discussions and necessary decisions have been made regarding development of poultry industry, water regulation projects, a five-year national plan for the sustainable development of saffron production, a national plan for the restoration of forests, creation of cold rooms, promotion of fish farming in Salma and other dams, and maintenance of Government assets.
In construction sector, professional and necessary decisions have been made for investment in this industry, settlement of the housing problems, plan of using government properties for business purposes, and the problems of housing.
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In money and banking sectors, topics such as prospects and challenges of the monetary policy and currency of the country, the acceleration of the implementation of the World Bank’s plan and project in the financial sector as well as the process of providing electronic financial services are discussed professionally;
In the trade, industry and investment sectors, major decisions include facilitating investments and supplying services to the private sector, establishing dry ports in Afghanistan by the Gulftainer Company, establishing Public-Private Partnership and export facilitation;
Moreover, discussions have been made regarding the telecommunications sector and information technology for developing Real-Time Data Management and Open Access Systems as well as a competitive environment for Optical Fiber and Broadband sectors in Afghanistan;
Asan Khedmat Project is approved for serving various public services in a simple and fast way, inside a single authority as a new approach for ensuring public satisfaction and increasing communication between government employees and public;
In enrgy and water sector, especially for investment, second power plant of Sorobi, reconstruction of the second phase of the Kajaki Dam, the adoption of the plan for the implementation of light-emitting diodes (LED), the determination of the price of natural gas for the project to generate electricity from natural gas and scheme of generating electricity from solar energy (Roof Top) has been focused and reviewed, as well as required measures have been taken.
In the public service section of Asan Khedmat Project, a number of systems are considered for digitization that would provide necessary facilities for the people.
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MANAGEMENT AND EFFECTIVENESS OF BUSINESS AND ECONOMIC BILATERAL COOPERATION
COMMITTEES WITH REGIONAL COUNTRIES
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The Ministry of Finance of the Islamic Republic of Afghanistan chairs 10 intergovernmental commissions of economic and trade cooperation between Afghanistan, neighboring and regional countries, which has made significant advances in trade, transit, transport, investment promotion, export promotion, regional cooperation and infrastructure, including railways, communications, higher education, culture, and agriculture. Afghanistan has already established bilateral economic and trade commissions with Turkmenistan, China, India, Pakistan, Iran, Turkey, the Russian Federation, Kazakhstan, the United Arab Emirates and Azerbaijan that has helped Afghanistan attract important.economic and development assistance from the mentioned countries
MAJOR ACHEIVEMENTS OF THE MENTIONED COMMISSIONS ARE SUMMARIZED BELLOW:
1) The following is agreed upon with Russia:
The issue of Russia’s debt claims to Afghanistan, which was about USD 1 billion, has been solved and investment agreement between both states has been finalized, as a result of the implementation of this agreement, facilities would be provided for issuing visas of Afghan businessmen. Russia’s cooperation in creating strategic oil reserves in the territory of Af-ghanistan has also been gained. Additionally, Russia’s support for electricity infrastructure projects in Afghanistan and checking possibilities of purchasing petroleum products from Russia Federation at a cheaper price, as well as other important issues are now under way in this commission.
2) The following is agreed upon with Iran:
1. The beginning of constructing third part of Khwaf-Herat Railway in a gratuitous way; financing and construction of 43 kilometers, fourth line of this railway by Italy at a cost of € 65 million,
2. Purchasing construction materials (cement, bitumen and rebar) at a lower price, based on the agreed mechanism,
3. Providing visa facilities to Afghan businessmen,
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4. Construction of 60 km, Abu Nasr-e-Farahi road,
5. Signing the contract of Chabahar Port and follow up of the recent developments in that port and finally obtaining Iran’s approval for the increase of electricity supply to Afghanistan has been considered as the major achievements of this Commission.
3) China’s support for the following has been achieved:
1. Taking membership of Afghanistan at the Asia Infrastructure Investment Bank (which in-cludes projects such as railway financing, Kama Power Plant, and connecting Helmand Prov-ince to Gwadar Port);
2. Accelerating the construction process of the railway line for Five countries (China, Kyrgyz-stan, Tajikistan, Afghanistan and Iran),
3. Cooperation in the formulation of a priority infrastructure plan,
4. Export of saffron, pistachio, jellyfish, pomegranate and kajoo to China;
5. Exemption from customs duties,
6. Facilitation of issuance of visas to Afghan traders,
7. Establishing a common room for trade and obtaining educational and higher educational scholarships
8. Starting construction projects of 10,000 affordable apartments for civil services employees in Kabul in the near future, and the same in other provinces,
9. Construction of a technical and vocational training center in Kabul; construction of a re-search center at Kabul University,
10. Connecting the customs system between Afghanistan and China
11. Transfer of merchants through the railway to Termiz,
12. Construction of a railway from Peshawar to Kabul,
13. Funding the project of a new construction building for the Embassy of Islamic Republic of Afghanistan in Islamabad for $ 17 million; and construction of new building for the Ministry of Finance in Darulaman, Kabul.
4) The following is agreed upon with Turkmanistan:
1. The construction of the Imam Nazar-Aqina Railway (which forms part of the Lajward transit corridor) was inaugurated on November 28, 2016;
2. Preparation for funding and construction of the Aqina-Andkhoy railway, which is part of the railway between Turkmenistan - Afghanistan - Tajikistan and its construction costs are re-quested from the Asian Development Bank,
3. Construction of Sarhad Abad - Tor Ghondi - Kashk Railway;
4. Finalization of the agreement on the transfer of 500KV Electricity from Turkmenistan to Pakistan through the western regions of Afghanistan,
5. Allocating $ 16 million in the budget of the year 2017 for increasing the supply of electricity to Qarqin and Khumab of Jawzjan Province
6. Connecting 110 KV line of Badghis to Tora Sheikh and consequently finalizing the agree-ment for encouraging and supporting bilateral investment.
7. Transfer of gas pipeline from Imam Nazr to Aqina border
8. Connection of the terminal in the Khazar Sea (Turkmanbashi Port) to Afghanistan for trans-ferring Afghan traders’ merchandise.
5) Uzbekistan’s agreement has been achieved on the following:
1. Scholarships to be provided on technical sections, such as railways, roads and shared with Afghanistan.
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2. International Transit between Afghanistan-Turkmenistan-Kazakhstan: The Transit Agree-ment has been prepared by the Ministry of Commerce and Industry of Afghanistan and sent to the Ministry of Foreign Affairs in order to be shared with Turkmenistan.
3. Procurement of fuels: Kazakhstan would review the offer made by Afghanistan for buying fuel (oil and gas) and will share the results with Afghanistan.
4. Formation of the Joint Railways Committee: The Afghan Railways Administration will in-troduce Committee members to Qazaqistan, as soon as possible.
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Regional and International Co-operation
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Brussels Conference: After rise of the National Unity Government, the Brussels Conference was the second largest International Conference on Afghanistan, after London Conference. This conference took place in Brussels City with representatives from 75 countries and international organizations. The coordinating and preparing of this conference was done by Afghan government through the Ministry of Finance. During the Brussels conference, the Afghan government managed to gain a total commitment of $ 15.264 billion from international partners for the next four years, which was higher than the expectations and forecasts of Global Finance Agency. It has been all the result of the efforts of the Afghan government, especially Ministry of Finance.
The Government of Afghanistan presented the Afghanistan Peace and Development Framework for five years and four national priority programs (Citizenship Covenant, Women’s Economic Empower-ment, Comprehensive Agriculture Program and Afghanistan Infrastructure Plan). The International Community expressed its support for the Afghan government in implementing the National Frame-work for Peace and Development, and national priority programs.
Prior to the conference, the Ministry of Finance provided the necessary discussions and coordination at the national and international levels, which resulted in resolute financial and political support of the International Community from Afghanistan.
Right after the Brussels conference, the Ministry of Finance arranged a practical mechanism of com-mitments for reform package and the National Framework for Afghanistan’s Peace and Development, which was approved by the Afghan cabinet on November 7.
These commitments include the modification and effectiveness of aids that the Government of Af-ghanistan and its international partners are expected to implement it during 2017-2018.
To implement the National Framework for Peace and Development, the required preparation of or-ganizing meetings with the International Community and development partners has been taken. With this mechanism, a better coordination would be made for prioritizing programs and projects as well as for the budgeting mechanism to achieve the priorities and objectives set forth in the framework.
At the end of the conference, both President Ghani and Federica Mogherini, High Representative of the Union for Foreign Affairs and Security Policy at European Commission, appeared at a joint press conference, marking the successful launch of the Brussels Conference.
The success of the conference was due to the joint work of the Afghan government and the European Union working groups. The High Representative of the Union for Foreign Affairs said that the broad support of the International Community from Afghanistan has shown that the International Commu-nity is in a strong, lasting and better position with the people of Afghanistan.
At the Brussels Conference, it was announced that the contributions of $ 1.7 billion from Germany, about $ 1 billion from the United Kingdom, about $ 1 billion from India, $ 900 million from the Japan, $ 700 million from the United States of America in the military sector, $ 600 million from Turkey, $ 87 million from Norway, $ 500 million from Pakistan and $ 100 million from Saudi Arabia will be done for Afghanistan, over the next four years.
Donor countries also have some demands from Afghanistan along with these donations. India has shown concerns about the security situation in Afghanistan and has also committed to support stabil-
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ity in Afghanistan. Japan has promised to help Afghanistan in order to ensure helping refu-gees and IDPs as well as running development programs in Afghanistan.
Germany has also provided its assistance for fighting corruption and returning those Afghan refugees whose asylum applications have not been accepted. Turkey has promised to build a special university for women in Afghanistan along with the aids; it will also continue to contribute for the Afghan security forces.
Signing an EU-Funded, € 200 Million Grant Agreement for Promoting Good Gover-nance in Afghanistan:
On the sidelines of the first day of Brussels summit, Afghanistan signed an agreement worth € 200 million with the European Union. This agreement was signed by the Minister of Fi-nance and Newtan Mimika, European Commissioner for Development Cooperation. The agreement enables the Government of Afghanistan to take more action in the area of good governance. At the time of signing the agreement, the Finance Minister said, “The fund will be directly transferred to the Afghan government budget and will be spent on reforms, good governance and gender (gender equality)”.
The Minister of Finance assured the European Union that the aids would be used transpar-ently and correctly in the areas discussed.
Afghan Women are Protectors of Democratic Values:
On the first day of the Brussels Conference, a meeting titled “Empowered Women and Developed Afghanistan” was held on women rights. At this meeting, the government of Afghanistan presented its plans for protecting women rights and empowering them. At this summit, President of Afghanistan said that Afghan women are protectors of democratic values in the country and their rights cannot be negotiated.
“Women will be the protectors of democratic values, women will protect their achieve-ments, expand it and will not retreat. Afghan women can now speak on their behalf with clarity and with a vision and commitment,” he said.
“Women constitute the majority of Afghanistan’s population, and their case is not any side of an issue. They are no longer victims, and men no longer need to talk on behalf of them,” he also added. Afghan President stressed that the National Unity Government will imple-ment comprehensive and systematic programs to empower women; the government will implement these programs with high determination. “We must measure our efforts regard-
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ing true empowerment of millions of girls, who need the same opportunities as boys, because that will bring our country to prosperity,” he said. However, he described the patriarchal-rul-ing culture, women’s lack of access to the market and violence against women as challenges to empowerment of Afghan women.
According to him, women in the economic sector are active only in the carpet industry, but they are faced with weaknesses in other sectors. He called on members of the International Community to help Afghan women grow in other economic sectors as well. He also referred to legal empowerment, “women should have Electronic Identification Cards, their marriage should be recorded and their inheritance should no longer be lost”.
The President referred to the recovery of women and said, “The implementation of the Citi-zenship Covenant is one of the achievements of the government; this program has been able to provide women with job opportunities”.
At the Brussels Conference for Afghanistan, the President of Afghanistan said that Afghan women made history in the past 15 years, although they were subject to violence and oppres-sion, they did not accept defeat.
Reforms and Elections;
The National Unity Government has presented the framework for peace and development in which Afghanistan’s policy strategies for self-sufficiency have been prioritized to the partici-pants at Brussels Summit; this framework was welcomed by the representatives at the Brus-sels Summit.
At the end of the two-day Brussels Summit, the representatives of countries and institutions issued a joint declaration. The statement states that the Afghan government has made initial efforts to reach a stable and accountable country, but more activities need to be done in Af-ghanistan to overcome the current problems and maintain common achievements.
Part of this announcement states that we appreciate the commitment of the National Unity Government for bringing more reforms to a stable economy. The announcement also states that a credible, transparent and inclusive election could guarantee political stability and strengthen democracy in the country.
According to the statement, early steps have been taken for electoral reform, and the National Unity Government has pledged to take the essential steps in 2017 to increase the credibility
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and trustworthiness of the electoral process and electoral departments. In this statement, sup-porters of Afghanistan, said, “Having a democratic and universal rule of law in the light of the constitution is one of the major needs for the sustainability of our cooperation”.
Terrorism;
President of Afghanistan said in Brussels Conference that everyone there, representatives of countries and international partners, has been gathered with a common vision of the value of de-mocracy and human rights; as well as, with the perceived threat of terrorism for threatening the stability and security of the world. He said that terrorism is not limited to specific borders and it should not be differentiated as being good or bad. “It should not be sheltered and neglected; terrorism is not only a threat to Afghanistan, but also for the entire international community,” he said.
At the end of the summit, participants of the Brussels Summit said that a stable, secure and de-veloped Afghanistan is vital for peace and stability in the region. In their views, development and security are challenges for the process of state-building in Afghanistan; to combat these problems, there is a need for genuine regional political support.
The Statement in Brussels Summit announced, “We are committed to fight all forms of terror-ism and extremism that threaten peace in the region and world”. Following the Brussels Confer-ence, the Joint Monitoring and Coordination Board Meeting and Senior Officials Meeting were set up in Kabul on October 2017.
Joint Coordination and Monitoring Board (JCMB);
The Joint Coordination and Monitoring Board (JCMB), chaired by the Ministry of Finance and the United Nations Office, was convened with the participation of ambassadors and representa-tives of 29 partners and donor countries in the Presidential Palace.
In the meeting discussions were made about the progress and implementation of the 24 type of commitments of the Government of Afghanistan with the international community under the framework of mutual accountability. These commitments include the commitments of the Brussels Conference and national priority programs, including the fight against corruption, civil services reform, the justice sector reform, public sector reform, creating job opportunities, and strengthening private sector.
The government and the international community has committed on 24 major indicators for the period of 2017-2018 at the Brussels Conference; 15 of these commitments relate to the Govern-ment of Afghanistan and 9 others to the international.
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Election reforms, financial reforms, economic and political empowerment of women, reform of land management regulations, private sector growth, transparency and accountability in extraction industries, streamlining processes and providing facilities for investors have been the core commitments of Afghanistan. Commitments of the international community, based on the Brussels conference, have been focused in the areas of aid effectiveness, aid reporting, and the use of aid in line with the priorities of the Afghan government.
“The Joint Coordination and Monitoring Board (JCMB) is the most basic mechanism of coordination between the Afghan government and the donor countries,” the finance minis-ter said. The members of this board are Afghan Cabinet Ministers, Ambassadors of Donor Countries in Kabul, civil society representatives, the private sector, and other international partners and countries.
The Joint Coordination and Monitoring Board (JCMB) was established in 2006 under the authority of the UN Security Council. Since then, the board has been able to act as a joint mechanism between the Afghan government and the international community on various issues, including joint planning and formulation, mutual accountability and better coordina-tion.
Positive Evaluation of the Outcome of the Joint Coordination and Monitoring Board Meeting by the Head of the Ministry of Finance and the United Nations Special Repre-sentative for Afghanistan;
During a press conference on the results of the twenty-first meeting of the Joint Coordination and Monitoring Board (JCBM), Dr. Mohammad Homayoun Qayomi, Head of the Ministry of Finance and Senior Advisor of president for Infrastructure Affairs, and Tadamichi Yama-moto, UN Secretary-General’s Special Representative for Afghanistan, assessed the confer-ence, named as “Towards Jinwa Conference”, positively and announced it to the media.
At the Joint Coordination and Monitoring Board Meeting on Development and Development Achievements of Afghanistan as well as the reform agenda based on Afghan National Peace Development Framework (ANPDF), was discussed and reviewed under the framework of mutual accountability.
Dr. Qayomi said in a press conference, “We had detailed discussions with ambassadors and representatives of donor agencies and countries on the effectiveness of assistance, large-scale economic reforms, private sector development, regional partnerships, justice and anti-cor-ruption, security sector reform, national priority programs, registration of assets of authori-ties, increase of 70% in national income collection, implementation of advanced comprehen-sive systems in revenue sources, high investment in mines, strengthening of the agricultural sector, development of the energy sector in the country, the arrangement of national budget
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for 2018 with priority Developments and realities of Afghanistan, regional connectivity for business growth in Afghanistan and the development of new cooperative models”.
The finance minister added that fortunately, most of the commitments of the ministry have been met, and rest of them would be met in particular scheduled time (until the Geneva Con-ference takes place in the fall of 2018).
UN Special Representative for Afghanistan, Tadamichi Yamamato said, “The twenty-first meeting of the Monitoring and Coordination Board is an introduction to the Geneva Confer-ence; we have been witness of the progress and achievements of Afghanistan in the areas of development and reform of agenda in line with the National Framework for Peace and Development. During Geneva Conference, which would be held on November, this year, the international community will continue to maintain strong support from Afghanistan in development and security sectors”.
Senior Officials’ Meeting (SOM)
The SOM summit was held with the participation of more than 40 countries, international donors, NGOs, heads of independent government agencies, and civil society and private sector representatives. At the meeting, senior government officials from Afghanistan and donor countries spoke about the achievements of the Afghan government, after the Brussels conference.
The first meeting focused on women’s economic empowerment, strengthening private sec-tor, implementation of priorities and facing challenges throughout the year 2020; the second meeting included discussions on governance, reform of state institutions, fighting corrup-tion, infrastructure development and priorities throughout the year 2020.
The basic agenda aimed to present a report on the implementation of the commitments and improvements of the government that took place after Brussels meeting. The government of Afghanistan attended the meeting with full preparation that is why government officials were looking forward a positive outcome of the meeting and gaining more support from the international community.
The meeting was conducted by joint collaboration of UNAMA and Afghan Government. Par-ticipants of this meeting were President of Afghanistan, Mohammad Ashraf Ghani, members of the cabinet, heads of independent government bodies, members of the National Assembly, civil society and private sector representatives from Afghanistan, as well as Tadamichi Ya-mamoto, UN Secretary-General’s Special Representative for Afghanistan, representatives from more than 40 donor countries of Afghanistan and a number of international organiza-tions.
The meeting focused on improvements made after the Brussels Conference and SOM meet-ings such as, implementation of commitments made on Brussels, outline of the future plans of the Government of Afghanistan, assistance of the international community for consider-ing priorities through the national budget, reporting and discussing about implementation of
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bilateral commitments of government and donor countries under the framework of mutual accountability for 2017-2018 and empowering women.
Warsaw Security Conference: Afghan government has convinced the international commu-nity at the Warsaw Conference with government reform plan in the security sector to support Afghanistan based on new commitments (approximately $ 5 billion annually) until 2020. To implement and use mentioned budget for security forces, regular meetings called OCB would be jointly held with international partners and Ministry of Finance.
This amount of money will be used for security sector’s priorities, which will increase the ability of our security forces to defend the necessary resources of territorial integrity and na-tional values.
Afghanistan was able to receive the commitment of being paid $ 5 billion per year for the next five years, from the international community, at the Warsaw Conference.
Major parts of these costs, which reach $ 5 billion per year, are funded by NATO nations, especially the United States. The government was also able to make clear commitments after returning from the Warsaw Conference.
Growth and empowerment of the air force are among the other expectations of the Afghani-stan government from the NATO Summit in Warsaw. Country’s air forces have relatively improved in recent years, but the Afghan government expects to have “perfect” air forces.
In Warsaw Conference, Afghan government delegates called on heads of NATO member nations to continue Resolute Support Mission in Afghanistan, after 2016. Resolute Support Mission (RS), which began after the end of the international military mission in 2014, in-cludes advisory, training and supporting Afghan security forces.
Providing training and facilitating educational opportunities for officers was another demand of the Afghanistan government from the Warsaw Meeting. Investments in this field can make Afghanistan self-sustained in training and educating new soldiers.
At this meeting, NATO nations also had clear expectations from the Afghan government. The expectations of both sides were similar and shared; the government of Afghanistan consid-ered the expectations of NATO in its reform agenda.
Afghan government also developed “Comprehensive” programs for participation in the War-saw Conference. In these programs, priorities, requirements and problems were correctly identified. It also included discussions on steps involved with transitions in security, political and economic handovers of responsibilities.
Obtaining Permanent Membership of Asian Infrastructure Investment Bank (AIIB);
The Minister of Finance of the Islamic Republic of Afghanistan traveled to Washington, DC, United States on October 12, 2017. The purpose of this visit was attending in the an-nual meeting of the World Bank (WB) and the International Monetary Fund (IMF); through meeting officials from various countries and international organizations during this meeting,
43 MOF ACHIEVEMENTS
Afghanistan was able to obtain a permanent membership with the Asian Infrastructure Invest-ment Bank (AIIB).
Afghanistan’s membership in this bank creates many opportunities for economic growth and infrastructure development, while this bank has also announced its goal of multilateral de-velopment, financing infrastructure projects in the Asian regions and the development of the transit infrastructure of the continent.
In 2013, Chinese officials announced that the country was seeking to establish an interna-tional bank with the cooperation of other governments that would provide financial and credit resources for the construction and development of infrastructure, including ports, railways, roads, airfields, extraction and transmission of energy, and telecommunications.
Since the beginning of 2013, the bank has officially begun providing loans and credits to sev-eral Asian developing countries for funding infrastructure projects in the Asia-Pacific region. In Asia, all governments except Southeast states, India, Russia, Iran and Pakistan, are among the founding governments of this organization.
Founding members of this bank believe that the continuation of Asian economic prosperity and development will require the development of investment in this vast area of Asia-Pacific, and its goal is to assist and create facilities for the growth and development of the Asian continent. This bank can act as an effective mechanism for provision and transfer of funds to projects that have a longer-term benefit.
The goals that the bank has defined for the region are in line with Afghanistan’s development priorities. Afghanistan can benefit from the economic capacities of this bank as a member in the following areas:
üInvesting in energy, transport and agricultural development;
ü Regional cooperation for maintaining growth and improvement of economic and social de-velopment;
ü Regional stability against financial crises;
ü Infrastructure development in expansion of connectivity and improvement of regional inte-gration;
ü Stability of social development for people and the long-term need for financing infrastruc-ture projects in Asia;
The membership of Afghanistan in this bank is very important and provides the ground for
MOF ACHIEVEMENTS
the implementation of major national projects in the country. In order to begin the practical work of this cooperation, in the near future, the head and senior officials of the bank will visit Afghanistan.
The membership of this bank also allows Afghanistan to have better direct and indirect com-munications with other members through development and cooperation. One of the clear benefits for Afghanistan is the development of infrastructural requirements and consultation as well as collaboration and support of infrastructures.
Afghanistan, as a member of the Asian Infrastructure Bank, will be able to access opportuni-ties for financial funding and cooperation as well as important investment projects.
Proposed Projects by the Government of Afghanistan to the Bank:
ü Corridor 1. Northern Corridor: ShirKhan Port-Kunduz-Mazar Sharif-Shiberghan-Andk-hoy-Mimana-Badghis-Herat-Shamtigh (Iranian port) with 1105 km distance and $ 2,255 million amount;
ü Corridor 2: South Eastern Corridor of Kandahar - Spin Buldag railway with a total of 95 km and an amount of $ 152 million;
ü Corridor 2: South Eastern Corridor of Lashkar Gah - Barmacha Railway, with a distance of 246 km and an a total amount of 393.6 million US dollars;
ü Corridor 3: North-South: Kunduz-Baghlan-Bamyan-Parwan-Kabul-Jalalabad-Torkham with total distance of 640 km and amount of $ 1,491 million;
ü Shal Power Station Project: The distance of 8 km from Esmer, City of Kuner Province with 1040-meter distance and cost of 1636.62 million USD;
ü Shah Toot Power Station Project: located in Kabul for the total amount of $ 236 million
2.0 bi l
1.88 bi l
1.80 bi l
1.60 bi l
1.40 bi l
1.20 bi l
1.0 bi l
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600 mi l
400 mi l
200 mi l
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Euro
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43
MOF ACHIEVEMENTS
New
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The total Foreign Aid on country-based in 2015
44
1200 mi l
1120 mi l
1000 mi l
800 mi l
600 mi l
400 mi l
200 mi l
28 mi l
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tral
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The total Foreign Aid on country-based in 2016
45
MOF ACHIEVEMENTS
900 mi l879 mi l
700 mi l
600 mi l
500 mi l
400 mi l
300 mi l
200 mi l
100 mi l
24 mi l
Aus
tral
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Stat
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Den
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800 mi l
The total Foreign Aid on country-based in 2017
46
700 mi l
650 mi l
200 mi l
300 mi l
400 mi l
500 mi l
600 mi l
100 mi l
24 mi l
Aus
tral
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Uni
ted
Stat
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The total Foreign Aid on country-based in 2018
47
MOF ACHIEVEMENTS
700 mil
800 mil
600 mil
400 mil
200 mil
82 mil
Asi
an D
evel
opm
ent B
ank
Wor
ld B
ank
2016
2017
2018
The total contribution of multilateral Institutions
48
Other Acheivements of the Ministry of Finance
50 MOF ACHIEVEMENTS
Government Property Management;Introduction:The General Directorate of Governmental Properties is responsible for registering all im-movable government assets inside and outside the country as well as protecting, caring, collecting the lease and rental of immovable properties and properties owned by the state that are in surplus in the possession of ministries and independent state departments and are located in commercial areas.
The General Directorate of Governmental Properties has always been focusing on raising the level of revenues received from properties that are in surplus of thepossession of gov-ernment departments and exist under the development plan of government departments.The General Directorate of Governmental Properties has tried a lot to prevent the usurpa-tion of all those properties that are introduced and transferred to this department with legal procedures of contracts under government departments; this directorate has also attempted to register all the government properties inside and outside the country. Furthermore, this directorate has been trying and succeeded to accomplish the following major activities and achievements in this regard:
Activities for the Arrangement of Legal Documents of Governmental Properties;
In the preparation and legislative processing of documents, the activities of the General Directorate of Governmental Property have had many achievements. By employing profes-sional, experienced and able personnel, this department has been able to take practical steps for preparation and implementation of legislative documents to overcome the gaps and de-ficiencies of law to a large extent and to meet the requirements of the administration. In this section, we provide details about the activities of the General Directorate of Governmental Properties for preparing legislative documents:
ü Arrangement of the Property Law;
ü Registration Procedures of Governmental Properties;
ü Procedures of Contracts for Governmental Properties and its attachments;
ü Guidelines and Conduct of bidding;
ü Maintenance Policy of Governmental Property;
ü Arrangements for land policy in accordance with the decision of the Supreme Economic Council Meeting;
ü Arranging effective schemes forexploiting andmanaging governmental properties
Registering Government Properties with the Property Departments of the Ministry of Finance:
The General Directorate of Properties of the Ministry of Finance has managed to register more than 22,000 department properties separately regarding the owner of the property, lo-cation, type, area, area limits and etc, some of which had documents and others were without
51 MOF ACHIEVEMENTS
documents (buildings, lands, shops, gardens, hotels, houses, residences and other immovable properties).
Preventing the usurpation of Moved Properties of the Government:
Among the disputed and usurped properties of the government, which had been in court for many years, the General Directorate of Government Properties of the Ministry of Finance has been able to effectively prosecute the cases of this issue in favor of the government, with the cooperation of the judicial and justice administrations. Details of the solutions for these issues are as follows:
ü The case of Sadar Market;
ü The case of Enayat Market;
ü The parallel case of 50644M square of land located in Kandahar Car Station;
ü A case of 50-acre land located in the seventh district of Kabul municipality;
ü The case of a claim made by shopkeeper of the Ministry of Information and Culture as well as Ministry of Higher Education;
ü The parallel case of 50-acres land located at Qalacha Khamdan, 8th District
ü The parallel issue of 7014 square meter land located in Kandahar Car Station;
ü The case of cooperative land of farmers
ü The debt case of companies located in Nasaji, Bagrami Area;
ü Parallel Case of (172) acre land and Nasaji, Bagrami Building;
ü The case of (2) acre Land of Ministry of Finance in Kabul province,located next to Russian Embassy:
ü The case of (4) acre land of the Ministry of Finance in Kabul, Parwan 3;
ü The Case of (8.5) acre Bagh Bala Farm;
ü The case of cooperative Land of farmers, located in Helmand province;
ü The case related to Takhar Provincial Financial Department Building;
ü The case related to cooperative Land in Jawzjan Province;
This directorate has been able to collect a total of more than two billion and nine hundred sev-enty nine million Afghanis and hand over it to the government treasury through the General Directorate of Governmental Properties during 2009 to 2017, based on strict monitoring and control of the collection of rental income and lease of surplus properties of government of-fices at a given time, as well as through creating a transparent, accountable and proportionate system to the requirements of the administration through legislative documents (procedures, Property Management Guidelines and Projects). The annual income received from the rental of the property has increased steadily over the past years, which is summarized in the graph below:
MOF ACHIEVEMENTS52
1389 64,395,042.0
150,912,029.0
272,454,606.0
339,257,117.0
475,917,977.0
460,994,000.0
491,661,597.0
723,483,937
1392
1390
1393
1395
1391
1394
1396
The Graph of Collected Revenuesof Governmental Properties
Completion of Revenue Plan of General Directorate of Governmental Properties in First Six Months and Revision of the Revenue Plan for the Fiscal Year 2018;
The General Directorate of Governmental Properties was able to complete its designated rev-enue plan in the first six months and collect 27% more than the amount designated in the plan.
The new revenue plan is now set and the amount of 771,900,895 Afghani has been designated as a new revenue plan through the General Directorate of Plans and Revenues; Directorate of Governmental Properties would be able to accomplish the plan by the end of this year.
Collection of the Remaining Amounts:
A number of governmesntal properties with a huge amount of over AFN 80 million, which have not been collected through the relevant agencies for many years, have been transferred to the General Directorate of Governmental Properties of the Ministry of Finance in accordance with the decrees and directives issued by the President. In the past, the tenants were also not willing to pay the rent based on the contract, but with the new leadership (within one and a half year), the Directorate of Governmental Properties managed to receive (72%) of that amount(which equals to AFN 58 million) and the amount was then added to the state treasury.Now, the remain-ing revenues are being collected and refined.
53
490,629,074
386,057,760.2
»عواید تحصیل شده در شش ماه اول پالن تعین شده
مالی« سال
»پالن جدید عواید تعیین شده بعداز شش
ماه دوم«
771,900,895.0
127%
عواید پالن تحقق »فیصدی
در شش ماه اول«
80,552,730.0
58,200,135
72%
MOF ACHIEVEMENTS
Corrective Aspects: Currently, there are no type of remaining gross from contracts that have been made through the General Directorate of Governmental Properties over the past two or more years and are currently in progress. At the same time, the contracts of tenants, who have not cleared the payments of their rentals, have been denounced and majority of them have been introduced to the courts.
Collection of Revenues of the Moved Governmental Properties from Social Organiza-tions (Cooperative Union of Farmers and Youth Union);
With the handover of 94 of the above-mentioned properties, the General Directorate of Gov-ernmental Properties have initially reviewed all of the property documents and contracts signed by the unions with individuals, who have entered into contracts for a low amount of rental and long-term period. After proceeding legitimate steps, the annual rental reached 44029053, which shows an increase of 329%, compared to the previous rental, 33764781 Afghani. The revenues received from the mentioned rental is being collected and delivered to the government treasury in a timely manner; following table shows the comparisons between the previous and current annual revenues:
Increase of Revenues Received from Rental of Moved Properties of Civil Aviation Depart-ment through the General Directorate of Governmental Properties;
Based on the decree number 39, date 11/01/2010 of the cabenat council,a number of properties that belonged to the Civil Aviation Department were transferred to the General Directorate of Gov-ernmental Properties in 2017. After proceeding the legal procurement processes of the mentioned properties, this directorate toke a lawful measure as a result of which, compared to the rental set based on previous contract (32), revenues are managed as following:
MOF ACHIEVEMENTS54
Increase of Revenues Received from Rental of Moved Properties of Civil Aviation Department through the General Directorate of Governmental Properties;
Based on the decree number 39, date 11/01/2010 of the cabenat council,a number of properties that belonged to the Civil Aviation Department were transferred to the General Directorate of Governmental Properties in 2017. After proceeding the legal procurement processes of the mentioned properties, this directorate toke a lawful measure as a result of which, compared to the rental set based on previous contract (32), revenues are managed as following:
(Increase of revenues received from the rental of transferred properties of state-owned dismissed enterprises)
According to the decree of the Ministry of Finance, under the document number. 39, date 11/01/2010 of Cabinet Council, a number of (18) properties of the dismantled state-owned enterprises has been transferred to the General Directorate of Governmental Prop-erties. Among the mentioned properties, those with expired contracts have been given for rent through bidding with a more expensive rental rate. Three of the total properties are presented as sample, bellow:
Property Revenue Growth and Collection Plan for the Fiscal Year 2018:
A number of state-owned properties have been given for rent with a very low amount of rental in various commercial areas by different government agencies. The absence of har-mony between the rental amount of two state-owned properties located next each other shows 2-sided (unhonest) deals and it also shows that the rental deals are not properly managed, maintained, and exploited by relevant departments.
The Directorate General of State Property intends to identify the mentioned properties and review their contracts, after they are referred to this organization. In addition, this directorate also intends to renew the contracts, which are expired, in accordance with the applicable laws (Procurement Law and Land Management Law). Moreover, this director-ate also intends to increase state-owned real estate revenues more than the year 2017, by fiscal year 2018 and transfer over AFN 900 million from rental and leasehold property in surplus to possession of government agencies to the state treasury.
Creation of State Property Archives to Maintain Ordinance Documents of State-Owned Properties:
Archives are the right and safe places to keep records, correspondence and other official and administrative documents. The absence of a standard and suitable place for document maintenance was one of the problems for the General Directorate of Governmental Prop-erty. Fortunately, due to the initiatives and efforts of the officials of this department and attention of the Ministry of Finance, a very large, well-equipped, safe and secure archive with all security facilities has been created, where records, register books and documents of the state-owned properties are maintained. The General Directorate of Governmental Property was able to create it.
55 دست آورد های سال ۱۳۹۷
Major achievements of the Treasury General Department;
Treasury Affairs (rising the capacity of the computerized payroll databaseinto Web-Based System);
Recognition of salary system, structure system , fertilizers and technology, methods of using the system, including the module of overtime working hours’ costs in the salary system, the ability to print the 16 M form through the system of preventing redundan-cy and excessive speed of operation, adjusting information of employees in the Web Based salary system, and eliminating Information about permanently absent and termi-nated employees from the center and provinces as well as transparency and prevention of corruption could be done through Web Based System.
Simplification of the registration process of the government staff and opening bank accounts in the Center of Registration System for government employees has been promoted from Ac-cess Version into Web Based Version. Moreover, Human Resources Departments of different directorates have also gained access to the mentioned system. By non-centralizing the regis-tration of the employees, who were previously referring to the Treasury General Directorate for collecting their salaries, do not need to continue the same process any more; now, they can directly refer to the bank. Additionally, information contained in the system will be trans-ferred electronically to the payroll system, after the opening of the bank account.
About 90% of government employees in the center as well as provinces, including military and civilians, receive their salaries electronically through commercial banks. Furthermore, the development and implementation of Web Based Payroll System has been implemented in 35 central administrations with control of structure and availability of information about the staff of mentioned agencies in the central server.
Payment of 90% of the salaries of Afghanistan National Police through banking system was one of the goals set by LOTFA at the London Conference.
The Treasury System of the Ministry of Finance has been able to provide salaries of more than 14,000 national and local police through mobile (Mobile-Banking), after a timely manner of physical identification, without any deficiencies in more than 49 distant districts, where is no banking services availible and previously these payments have been processed through a trustee.
MOF ACHIEVEMENTS56
Transferring Salaries through Electronic Fund Transfer (EFT) System:Simplification of salary payment for government administrations at the cen-ter and signing agreement with De Afghanistan Bank: During the fiscal year, 2016 salaries of all government departments, including regular budget, were processed electronically without sending any check to the bank. This process was taking up to two days in the past, but now there is an inter-banking system, which process trans-actions without delay. In addition to simplification of the process, the timing for processing transactions has also been reduced. Employees of the development proj-ects receive their payments through EFT, conducting meetings with the leadership and technical section for paying salaries of development projects through Refine and Adjustment System of De Afghanistan Bank.
Successful implementation of 75% payments of salaries of government employees through the bank system, which included Fighting Corruption Plan of the Ministry of Finance in 2016
Providing training programs for minimizing undesirable government costs in five zones and four provinces
The Department of Treasury of the Ministry of Finance has 10 educational centers nation-wide, in which hundreds of government employees are trained throughout Afghanistan on various sections related to national finance administrations of Afghanistan, every year. Training programs include the Afghan Finance Ministry’s information system for learning the new module, the new version of the salary system, and staff of the financial and procure-ment sectors of the first and second units of government departments.
Implementation of Web Based FMS System
The seventh version of the Free Balance System and the Web version of the training program and its development will be done in all first and second units of the center, 34 provincial revenue departments (Mastofyats), 6 military corps facilities and districts, if required. Ex-tension of the FMS system to Afghanistan’s embassies abroad, government agencies and municipalities. The Deputy Ministry of Municipalities of Independent Directorate of Local Governance have their own systems for municipalities. In cooperation with the technical staff of both offices, access to the system is provided for the staff of the Treasury. This de-partment can receive reports on the system on a weekly basis. FMS System has been imple-mented in embassies, specifically, implementation of its trail at 2 embassies, which included assessment, examination phase or trail and the proposed solution (using VPN or non-central system)
57 MOF ACHIEVEMENTS
Implementation of Zero Balance Accounts and Costs Accounts of Provincial Revenue Departments (Mastofyats)
In the revenues section, all government revenue accounts are Zero Balanced and deposited into the Treasury Account daily, except Nuristan, where this process takes place weekly as well as Helmand and Samangan, where the same process happens once in each two days. Procedures for Zero Balancing provincial accounts are shared to the Central Bank. Establishing a frame-work and agreement with the Central Bank of Afghanistan for implementing Zero Balance accounts in the provinces is implemented, after the approval of the bank at the beginning of financial year 2017. With the implementation of this reform, the government will be able to understand the level of daily revenues and spending amount.
Everyday, accounts (Zero Balance Accounts) of 10 provinces are deposited into the Treasury Account, after the process of Zero Balancing is done; this system would be also activated in other provinces very soon.
Implementation of the Purchase and Registration of Assets Model
Acquisition of Asset Registration and Purchase Model in initial budgetary units of the center takes place in eight provincial revenue departments (Mastofyat), 20 ministries, and six Army Corps Facilities. The implementation of these models will help the government in accurate management of the budget and preventing the occurrence of budget surpluses for the next year.
Capacity Building of the Staff of Directorate General of Treasury through the World Bank Project in the Capital and Provinces
More than 640 employees of the Treasury Department, in the capital as well as provinces, are studying their bachelor’s and master’s degrees. In addition to the tuition, they also receive transportation fare. Approximately 140 of them are female students, who are studying in the fields of economics, based on needs of the departments. Until now, there have been about 218 undergraduate (bachelor) students, 131 graduate (Master) students and 39 one-year English Language Diploma holder students.
Confederation of Professional Accountants (CPA), Afghanistan
In 2009, the World Bank and International Monetary Fund conducted researches in the field of accounting in Afghanistan. According to the Report on Observance of Standards and Codes (ROSC), Development Project of (PAOD), or CPA Afghanistan, was created under the control of the MoF’s Treasury Department. The ROSC report proposed three major sections that the CPA Afghanistan has had significant improvements and achievements in all three areas from
MOF ACHIEVEMENTS58
the beginning until now and they are explained as follows:
1. Establishing Afghanistan Professional Accountants’ Law (Legitimate Reform)
2. Establishing Afghanistan Accountancy Board (CPA Afghanistan Board)
3. Nationwide capacity building of professional accountants
Establishing Afghanistan Professional Accountants’ Law (Legitimate Reform)
Afghanistan Professional Accountants’ Law was legally processed by Ministry of Justice and approved by the Presidency of Afghanistan; it was issued by decree No. 251, date 19/02/2016.
Considering the guidance of the decree from Presidency, Afghanistan Professional Ac-countants’ Law was sent to the parliament for approval, and fortunately, it was approved with the majority of positive votes. The law was recently approved at the mixed meetings of the Walasi Jirga (Parliament) and Meshrano Jirga (Senate) and it was forwarded to the Minister of State for Parliamentary Affairs for further actions.
Afghanistan Accountancy Board (CPA Afghanistan Board)
According to Article 6 of the Afghanistan Professional Accountants’ Law, Afghanistan Ac-countancy Board is composed of representatives from the Ministry of Finance, Ministry of Higher Education, Ministry of Economy, Ministry of Commerce and Industry, De Afghan-istan Bank, the Chamber of Commerce and Industry of Afghanistan, and the private sector.
The board has convened twelve times from the beginning to the present and has discussed various topics, including the following:
ü Implementation of Afghanistan Professional Accountants’ Law;
ü Adjustment of regulations;
ü Establishing technical committees
ü Selecting eligible people for creating technical committees
ü Adoption and implementation of International Finance Reporting Standards
ü Creating Accounting Department under the influence of Economics Faculty at Kabul University
ü Adding two subjects F4 Corporate and Business Law and F6 Taxation Law
ü Discussion on Operational Plan of the CPA Afghanistan
59 MOF ACHIEVEMENTS
Capacity Building of Professional Accountants in Country Level
In order to promote and support education on Accounting and Auditing, CPA Afghanistan has implemented the following two strategies, which can enhance the professional capacities in Accounting and Auditing, to the country level:
Professional Education Strategy: In March 2016, this project announced 1,000 full schol-arships for Accounting Students, based on the success rate. Number of registered students reach to 1215 and 183 of them are female students. Mentioned organization has been able to reimburse the educational expense of 794 students or 1986 subjects. The number of subjects covered for the females reach to high numbers of 167 subjects. It should be noted that CPA Afghanistan intends to raise the number of scholarships for the year, 2018 from 3,000 up to 5,000.
Academic Education Strategy: On the basis of a Memorandum of Understanding signed between the Ministry of Finance, the Ministry of Higher Education, Kabul University and the Faculty of Economics on November 18, 2016 for the rehabilitation of the Accounting Depart-ment under Economics Faculty, the CPA Development Project has taken actions for the estab-lishment of the Accounting Department on November 20, 2017 with the International Islamic University of Malaysia, a governmental university. Students graduating from the Accounting Department will be exempted by ACCA for a maximum of 9 papers, thus the number of stu-dents in the Accounting field would be sustainabley increasing.
CPA comprised the following five technical departments, each consisting six Chartered Accountants under the CPA Afghanistan Board:
1. Department of Professional Education;
2. Department of Membership and Licensing;
3. Department of Professional Standards;
4. Department of Professional Performance;
5. Department of Examinations and Validation
The board has convened various times from the beginning to the present and it is obliged to implement the activities in accordance with rules, regulations, guidelines, and worldwide-accepted standards.The CPA Afghanistan will be actively representing Afghanistan in the international conferenc-es and workshops of CAPA, SAFA, IFAC, IFRS, Edinburgh Group and region in Sri Lanka, India, Nepal, Pakistan and Bangladesh.
Signing Memorandum of Understanding (MoUs) with Regional and International Ac-countant Administratins
• Signing long-term agreements of cooperation with ACCA in London on January, 2015
• Signing Memorandum of Understanding (MoU) with Professional Accountant Inistitu-
MOF ACHIEVEMENTS60
ate of England Wales (ICAEW)
• Signing MoU with Professional Accountant Inistituate of India (ICAI) (mentioned in-istitute has held capacity-building programs for accountant, board members and tech-nical committee members on August 2017)
• Signing MoU with Accountant Administration of Ardon (JACPA)
• Signing contract of creating Accounting Department with International Islamic Uni-versity of Malasia
• Signing Partnership Agreement with ACCA based on which part of the revenues ob-tained from Afghan Students would be given to the Professional Acccountant Depart-ment of Afghanistan.
• In addition to the commitments, payments would be provided for Accounting and Au-dit Students, who have been successful in more than 1200 subjects.
• Submuitting the proposal forobtaining membership of (CAPA)
• Increasing the number of institutions for teaching ACCA Papers from one institute to 6 institutes
• Arrangement of two Papers, (F6) Taxation and ACCA (F4) Business Law, based on Afghanistan laws
Obtaining Membership of (SAFA) Federation
On September 2017, Nepal Accounting Department, along with Afghanistan Accounting De-partment, jointly hosted 48th Conference of South Asian Federation of Accountants (SAFA). The South Asian Federation of Accountants (SAFA) has accepted the membership of Af-ghanistan with 100% of votes and committed to hold the next conference on April 2018, in Kabul City.
Obtaining the Membership of Confederation of Asia and Pacific Accountants (CAPA)
Confederation of Professional Accountant of Afghanistan (CPA Afghanistan) achieved the membership of Confederation of Asia and Pacific Accountants (CAPA) on May 18, 2018.
This confederation is a regional office and represents 32 professional confederations of ac-countants in 23 Asian and Pacific countries. These confederations of professional accoun-tants, which are called members of CAPA Confederation, represent 1.6 million professional accountants in regional level.
66
Bilateral meeting with Germany
Hamid Karzai International Airport Customs Zone
MOF ACHIEVEMENTS
MOF ACHIEVEMENTS65
Announcing the results of the 21st Joint Coordination Monitoring Board at GMIC
21st Joint Coordination Monitoring Board towards Geneva Conference on Afghanistan
Acting Minister of Finance Visits Feroz Koh Foundation
Firuzkouh Foundation
MOF ACHIEVEMENTS
Aqina Port Railway
Salma Dam, a symbol of regional cooperation
MOF ACHIEVEMENTS
H.E. the President introduces Acting Minister of Finance
MOF ACHIEVEMENTS
Transfer of the first cargo from China to Afghanistan via rail
Inauguration Ceremony of TAPI Practical work in Herat
MOF ACHIEVEMENTS
Public Engagement in National Budgeting
National Budget Hearning ssesstion
MOF ACHIEVEMENTS
National Budget Hearning ssesstion
MOF ACHIEVEMENTS
Geneva World Conference on Afghanistan
Afghan President meets with Indian and Iranian counterparts on the Chabahar Tripartite Agreement
Signing Agreement with the World Bank to Support Education Sector and Women Economic Empowerment
Laying the Foundation for Protected Document Printing Press Training Center
MOF ACHIEVEMENTS
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