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AFGHANISTAN:
Public Expenditure Update
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Disclaimer
This volume is a product of the staff of the International Bank for Reconstruction and Development/The World
Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views
of the Executive Directors of The World Bank or the Governments they represent. The World Bank does not
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Acknowledgements
This note was prepared by Tobias Haque (Senior Country Economist, GMTSA) with assistance from
Habiburahman Sahibzada (Economist, GMTSA) under the guidance of Manuela Francisco (Practice Manager,
GMTSA) and Shubham Chaudhuri (Country Director, SACKB). The BOOST database is maintained by Kirk
Schmidt (Public Sector Specialist, GGOAP). The authors are grateful to officials from the Ministry of Finance
for sharing data and providing comments on draft versions of the report.
Afghanistan Public Expenditure Snapshot
Public expenditure in Afghanistan is at high and
unsustainable levels. Grants finance more than 75 percent
of total expenditures. Total expenditures are equal to
around US$11 billion, while government own-revenues are
around US$2.5 billion.
Total on-budget expenditure has grown rapidly in nominal
terms (by around 30 percent) over the past five years. But
once the impacts of inflation and population growth are
considered, growth has been negligible (real per capita
expenditure has increased by around four percent over the
past five years).
The security sector dominates public expenditure. Total on-
budget expenditure is equal to around US$135 for every
Afghan. Of this amount, around US$50 is absorbed by the
security sector.
There has been a reorientation of on-budget public
expenditure towards development spending over recent
years, with development spending increasing from one-
quarter to one-third of total spending over the past five
years. This has allowed significant increases in infrastructure
spending.
Health spending remains very low, at around US$8 per
Afghan. Allocations to health have increased over recent
years, however, driven by significant increases in health
expenditure through the growing development budget.
Education spending has declined over recent years,
especially on basic education. Education’s share of the
budget has declined from 17 percent in 1390 to just 12
percent in 1397. Real per capita spending on education has
decreased by around 13 percent over the past five years.
Afghanistan Public Expenditure Update | i
Contents
Key messages ............................................................................................ 1
1. Introduction ........................................................................................... 5
2. Fiscal overview ...................................................................................... 6
3. Aggregate expenditure trends ............................................................. 10
4. Recurrent allocations and expenditures .............................................. 18
5. Development Allocations and Expenditures ........................................ 31
6. Large Ministry Profiles ......................................................................... 40
Afghanistan Public Expenditure Update | ii
Table of figures
Figure 1: Afghanistan’s total public expenditure is extremely high ............................................................... 6
Figure 2: Afghanistan is highly reliant on grants to finance expenditure ...................................................... 7
Figure 3: Grants support a large share of both civilian and security expenditure ......................................... 7
Figure 4: Substantial shares of civilian and security expenditure are off-budget .......................................... 8
Figure 5: Substantial grants are delivered off-budget ................................................................................... 9
Figure 6: Nominal expenditure has substantially increased ........................................................................ 10
Figure 7: Real per capita expenditure has barely increased since 1392 ...................................................... 11
Figure 8: Public expenditure has remained constant as a share of GDP ..................................................... 12
Figure 9: A smaller share of the budget is being used for security .............................................................. 13
Figure 10: Real per capital spending on infrastructure and social protection is increasing ........................ 14
Figure 11: Government health expenditure as % GDP ................................................................................ 16
Figure 12: Total health expenditure per capita in current USD ................................................................... 16
Figure 13: Total government education expenditure as a percentage of GDP............................................ 17
Figure 14: Recurrent expenditure is concentrated in a small number of large ministries........................... 18
Figure 15: Recurrent expenditure growth has been concentrated in large ministries ................................ 19
Figure 16: Recurrent expenditure is concentrated in a small number of large ministries........................... 20
Figure 17: Recurrent expenditure is dominated by defense, public order and safety, and education ........ 21
Figure 18: Real per capita spending on security and public order has recently declined ............................ 22
Figure 19: Wages and salaries continue to dominate the recurrent budget ............................................... 23
Figure 20: Recurrent expenditure growth has been driven by wages and salaries ..................................... 24
Figure 21: Wages and salaries have been fairly constant as a share of the economy ................................. 25
Figure 22: Expenditure growth on salaries and wages has been driven mostly by allowances ................... 25
Figure 23: Expenditure growth on salaries and wages has been concentrated in security agencies .......... 26
Figure 24: Recurrent expenditure has grown faster than inflation for most line items .............................. 27
Figure 25: Recurrent budget execution is generally strong ......................................................................... 28
Figure 26: Under-spends on goods and services drive weaknesses in execution ........................................ 29
Figure 27: Under-spends on goods and services drive weaknesses in execution ........................................ 29
Figure 28: Wages and Salaries as percentage of GDP - Afghanistan and comparators ............................... 30
Figure 29: Total number of civil servants (civilian) ...................................................................................... 30
Figure 30: Recurrent budget execution is generally strong ......................................................................... 31
Figure 31: Increases in development expenditure have been concentrated in health and infrastructure . 32
Figure 32: Development expenditure have increased for most ministries in percentage terms ................ 33
Figure 33: Development expenditure have increased for most ministries in percentage terms ................ 34
Figure 34: Development expenditure is increasingly dominated by agriculture and infrastructure ........... 35
Figure 35: There have been large increases in real per capita development spending on infrastructure ... 36
Figure 36: Development expenditure has increasingly focused on capital investment .............................. 37
Figure 37: Development expenditure growth has focused on buildings, contracted services ................... 37
Figure 38: Development expenditure has increased fastest on utilities, tools, and machinery .................. 38
Figure 39: Recurrent budget execution is generally strong ......................................................................... 39
Figure 40: Expenditure by type ................................................................................................................... 41
Afghanistan Public Expenditure Update | iii
Figure 41: Real per capita expenditure by type ........................................................................................... 41
Figure 42: Share of budget by type ............................................................................................................. 41
Figure 43: Expenditure by economic classification ...................................................................................... 41
Figure 44: Expenditure by type ................................................................................................................... 43
Figure 45: Real per capita expenditure by type ........................................................................................... 43
Figure 46: Share of budget by type ............................................................................................................. 43
Figure 47: Expenditure by economic classification ...................................................................................... 43
Figure 48: Expenditure by type ................................................................................................................... 45
Figure 49: Real per capita expenditure by type ........................................................................................... 45
Figure 50: Share of budget by type ............................................................................................................. 45
Figure 51: Expenditure by economic classification ...................................................................................... 45
Figure 52: Recurrent expenditure by program ............................................................................................ 45
Figure 53: Expenditure by type ................................................................................................................... 47
Figure 54: Real per capita expenditure by type ........................................................................................... 47
Figure 55: Share of budget by type ............................................................................................................. 47
Figure 56: Expenditure by economic classification ...................................................................................... 47
Figure 57: Recurrent expenditure by program ............................................................................................ 47
Figure 58: Expenditure by type ................................................................................................................... 49
Figure 59: Real per capita expenditure by type ........................................................................................... 49
Figure 60: Share of budget by type ............................................................................................................. 49
Figure 61: Expenditure by economic classification ...................................................................................... 49
Figure 62: Recurrent expenditure by program ............................................................................................ 49
Afghanistan Public Expenditure Update | 1
Key messages
This note provides basic analysis of allocations and trends in on-budget public expenditure
in Afghanistan since 1389.
Fiscal sustainability
Public expenditure in Afghanistan is at high and unsustainable levels. Total public
expenditure is much higher than other low-income countries, primarily due to very high
security expenditures. Security expenditures is equal to around 30 percent of GDP relative
to a low-income country average of three percent of GDP. Grants finance more than 75
percent of total expenditures. As grants decline over time, government and the
international community will need to find ways to: i) improve the efficiency and
effectiveness of expenditure; and ii) support economic growth to drive revenues with
which to replace declining grants.
A careful balance needs to be struck between meeting short-term basic needs and ensuring
long-term growth. Overall fiscal resources are tightly constrained. It is important that
sufficient resources are allocated to supporting health, education, and other poverty-
reducing measures. At the same time, Afghanistan’s longer-term fiscal sustainability and
prospects for substantial poverty reduction depend on much faster rates of economic
growth. Given the potential contribution of human capital investments to both economic
growth and poverty reduction, low per capita expenditures on health and declining
expenditure on education may be of concern.
Substantial public expenditure continues to be delivered off-budget. Around 66 percent of
security sector expenditure and 34 percent of civilian expenditure is currently off-budget.
Bringing an increasing share of expenditure on-budget offers opportunities for improved
efficiency, better alignment between expenditure and policy priorities, and increased
domestic economic impact of expenditures.
Aggregate trends
Overall on-budget expenditures in Afghanistan have grown rapidly in nominal terms since
1389. But taking account of inflation and population growth, real per capita spending has
grown by only around four percent since 1393. Given that the growth and revenue outlook
is challenging, there will be continued pressure to improve the efficiency of expenditures
without the availability of substantial new resources.
Afghanistan Public Expenditure Update | 2
Real per capita expenditures remain extremely low, with the security sector continuing to
account for a large share of the budget. On-budget spending is equal to around US$135 for
every Afghan. Total budget expenditure on security is equal to around US$50 per capita
compared to just US$21 per capita for infrastructure, US$17 per capital for education, and
US$8 per capita for health.
Recent trends in budget allocations are broadly positive. The share of the budget dedicated
to security has declined, creating space for increased expenditure on infrastructure. The
development budget is increasing in real terms and as a share of total spending (from
around one quarter of total spending in 1393 to one-third in 1397). Allocations to health
have increased, driven by increased development spending, but from a very low base.
Allocations to education, however, have continued to decline.
Recurrent budget
In general, wages and salaries dominate the recurrent budget and have therefore dominated
recent expenditure growth. Wages and salaries account for around 70 percent of recurrent
expenditure and around 70 percent of all expenditure growth since 1389.
By sector, the vast majority of recurrent expenditure growth since 1389 has been absorbed
by defense, law and order, and education. But this reflects their existing large share of
budget, rather than significant sectoral reallocations.
Recurrent budget shares by function and ministry have remained fairly constant. There has
been some modest recent decline in security sector, as expenditure on general public
services and social protection has grown. There has been substantial change within the
security sector with growth of the General Directorate of National Security compensating
for slight declines in expenditure by the Ministry of Defense and the Ministry of Interior.
Recurrent allocations to basic education have significantly declined. Recurrent expenditure
of the Ministry of Education has declined substantially and consistently in real per capita
terms since 1392 (by around 17 percent). While there has been only a slight decline in
overall education sector expenditure as a share of the recurrent budget, this reflects
growth of higher education expenditures.
Afghanistan Public Expenditure Update | 3
Development budget
The development budget has grown as a share of total expenditure, helping to drive an
aggregate reorientation of public expenditure away from security and towards
infrastructure. Development expenditures have been gradually reoriented from agriculture
and rural development to public works and DABS infrastructure over time. In social sectors,
development expenditures on health have steadily increased. But development
expenditure on education has declined in real per capita terms, remaining a small share of
overall development expenditure (Afs 217 per capita in 1392 to Afs 142 per capita in 1396,
in 1389 terms).
Weak development budget execution is explained by a relatively small number of poorly-
performing ministries with very large allocations. The Ministry of Public Works had average
under-expenditure of around 14 billion per annum over the past three years. The Ministry
of Education also accounted for around Afs nine billion of under-expenditure per year on
average.
Development budget execution has improved over recent years due to cancellation of poorly
performing projects. Automatic rollovers of development budget allocations were
eliminated in 2018, in favor of careful review of project performance and expenditure
estimates.
Implications
Continue to strengthen budget and public investment management processes to ensure
alignment between policy goals and expenditure. Afghanistan has achieved important
improvements in budget formulation and public investment management processes over
recent years. Recent reforms have sought to ensure rigorous assessment of discretionary
projects and programs – both in terms of economic efficiency and alignment with policy
goals – prior to the allocation of budgetary funds. Effective and sustained implementation
of these reforms is now vital.
Work to ensure complementarity between off-budget expenditures and government
programs. As total grant resources decline, it will be important for the international
community to try to preserve or increase on-budget grant support, which underpins core
service delivery and major government programs. Such increases in on-budget support will
likely depend on improvements in government systems to provide strengthened control
and protection against corruption risks. International partners may be constrained in the
proportion of grants that can be provided on-budget under any conditions, however, so
further progress is also required in aligning on- and off-budget resources. Improved data
systems to capture off-budget programming and continued periodic reviews of off-budget
portfolios will be useful.
Afghanistan Public Expenditure Update | 4
Prioritize wage bill management. Salaries and wages will continue to account for the largest
share of government expenditure. Work to ensure that pay and salaries are sustainable
and facilitate efficiency in public services should be pursued as a matter of priority.
Effective implementation of the new wage bill policy is a key priority.
Review and model the sustainability of social benefit payments. Explosive recent growth in
social benefit payment under the Ministry for Martyrs, the Disabled, and Social Affairs
poses sustainability concerns. There may be justification for reviewing the drivers of
expenditure growth and identifying policy options for arresting this growth over time.
Continue work to review security sector sustainability. Security expenditures continue to
account for a very large share of the budget. As Government takes on greater responsibility
for security, including management of capital assets, expenditure pressures will grow. At
the same time, there has been significant change in the structure of security sector
spending, with the General Directorate of National Security growing at the expense of the
Ministry of Defense and Ministry of Interior. A detailed review of current expenditure
drivers is already underway. Opportunities for efficiency improvements can be realized.
Government and the international community need to agree on transition plan through
which Afghanistan can take on greater responsibilities for delivery of security sector
expenditures but without squeezing out space for much-needed development spending.
Continue with recent work to review development projects and reallocate unused resources
to build up fiscal space. Ongoing work to identify and reallocate resources away from poorly
performing development projects has helped significantly improve development budget
execution rates. This work should continue as a priority to ensure maximum fiscal space is
available for new projects that support policy priorities.
Afghanistan Public Expenditure Update | 5
Introduction
1. Introduction
This report provides an overview snapshot of public expenditure in Afghanistan. The report
presents analysis of: i) the overall fiscal situation and the extent of fiscal sustainability
challenges; ii) aggregate budgetary allocations and expenditure trends over the proportion
of public spending that is delivered on-budget; and ii) summary analysis of expenditure
trends within five large key ministries (Ministry of Defense, Ministry of Interior, Ministry of
Education, Ministry of Martyrs, Disabled, and Social Affairs, and Ministry of Public Health).
Analysis is based on expenditure data included in the BOOST public expenditure analysis
tool. The BOOST tool is jointly maintained by the World Bank and the Afghanistan Ministry
of Finance. This tool uses expenditure data directly from the government’s Financial
Management Information System (AFMIS), which is considered the most reliable source of
expenditure information. Data from AFMIS and presented in this report, however, does
not always fully reconcile with other printed documents. The analysis examines actual
expenditure at year-end, rather than planned budget allocations. Data is reported using
Afghan fiscal years, with the year 1397 approximately corresponding to the 2018 calendar
year. Off-budget expenditure is excluded from the analysis.
This analysis is not intended to be authoritative or comprehensive. Rather, it is intended to:
i) present basic high-level facts about public sector allocations and expenditure trends that
may be of interest to government and the international community; and ii) identify
questions and issues for future analysis, including through an ongoing program of public
expenditure analysis being undertaken jointly by the Ministry of Finance and the World
Bank.
The report is structured as follows:
• Chapter two provides a brief overview of public expenditure levels and financing
sources in Afghanistan;
• Chapter three provides an analysis of aggregate on-budget expenditure trends;
• Chapter four provides analysis of allocations and trends under the recurrent
budget;
• Chapter five provides analysis of allocations and trends under the development
budget;
• Chapter six provides high-level analysis of allocations and trends within five key
large-spending ministries.
Afghanistan Public Expenditure Update | 6
Fiscal overview
2. Fiscal overview
Public expenditure is very high in Afghanistan. Total public expenditure is equal to around
58 percent of GDP, far exceeding the usual level for low-income countries (or any country
income group). High total expenditure reflects very substantial security sector
expenditures. Security spending is equal to around 30 percent of GDP, compared to just
three percent for the average low-income country.
Figure 1: Afghanistan’s total public expenditure is extremely high Total public expenditure as a share of GDP (Afghanistan and low-income countries)
Public expenditure far exceeds government revenues. Afghanistan is entirely reliant on
grants to finance very high levels of public expenditure. Grants are equal to around 45
percent of GDP, compared to an average of around 10 percent for low income countries.
Grants finance 75 percent of total public expenditures. Government revenues are currently
equal to around US$2.5 billion per year, while total expenditures are equal to around
US$11 billion per year. While there is scope for further revenue growth, Afghanistan is
already collecting around 13 percent of GDP in own-source revenues, comparable to other
South Asian countries. There is likely to be mounting pressure on public expenditures as
grants decline over the medium-term.
Afg
hanis
tan (
on b
udget
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Afg
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civ
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Afg
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tota
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0
10
20
30
40
50
60
70
% G
DP
Afghanistan Public Expenditure Update | 7
Fiscal overview
Figure 2: Afghanistan is highly reliant on grants to finance expenditure Total public expenditure and financing sources
Figure 3: Grants support a large share of both civilian and security expenditure Expenditure and financing sources – security and civilian
0
2
4
6
8
10
12
Sources Spending
$U
S (
Bill
ion
s)
Revenue Grants Security Civilian
0
0.5
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1.5
2
2.5
3
3.5
4
Security Civilian
US
D B
illio
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Grant financed GoIRA financed
Afghanistan Public Expenditure Update | 8
Fiscal overview
Off-budget expenditure remains a large proportion of public expenditure. Around 66
percent of security sector expenditure and 34 percent of civilian expenditure is currently
off-budget. Large off-budget expenditures are driven by large off-budget grants. Of total
grants to Afghanistan, around 75 percent of security grants and 55 percent of civilian
grants are delivered off-budget. While evidence suggests that off-budget expenditure
typically involves higher program delivery costs and has lower domestic economic impacts
than on-budget expenditure, it can serve a useful purpose, and complement on-budget
projects and programs. In Afghanistan, however, weaknesses in data on off-budget
expenditure programs present significant challenges to ensuring that programs are
consistently aligned with government priorities.
The analysis presented in the remainder of this report covers only on-budget expenditures.
Due to absence of comprehensive data on off-budget expenditures, only those public
expenditures channeled through the government development and recurrent budgets are
included in this analysis. This includes recurrent and development expenditures that are
financed by on-budget grants.
Figure 4: Substantial shares of civilian and security expenditure are off-budget Total public expenditure – on- and off-budget
0
1
2
3
4
5
6
Security Civilian
$U
S (
Bill
ion
s)
On-budget Off-budget
Afghanistan Public Expenditure Update | 9
Fiscal overview
Figure 5: Substantial grants are delivered off-budget Security and civilian grants – on- and off-budget
0
1
2
3
4
5
6
Security Civilian
$U
S (
Bill
ion
s)
On-budget Off-budget
Afghanistan Public Expenditure Update | 10
Aggregate Expenditure Levels and Trends
3. Aggregate expenditure trends
In nominal terms, on-budget public expenditure has grown rapidly in Afghanistan since 1389,
increasing by around 150 percent over eight years. Over recent years there has been a slight
reorientation of expenditure towards development (development expenditure as a share
of total expenditure has increased from around 24 percent in 1393 to around 33 percent
in 1397).
Figure 6: Nominal expenditure has substantially increased Aggregate Nominal Expenditure by Budget Type (Billions Afs)
Over this period, however, Afghanistan has experienced steady inflation and rapid
population growth. Prices increased by around 48 percent in total over the period, while
the population has grown at around 2.7 percent per annum. Taking account of price and
population changes, real per capita expenditure growth has been much more gradual.
Total per capita expenditure has grown by only around four percent over the five years
since 1393. This largely reflects stabilization of on-budget aid flows and slowing revenue
growth, driven by weak economic performance. Total real per capita recurrent
expenditure has declined by seven percent over the past five years (from 1393).
Development expenditure increased by around 40 percent over the same period.
0
50
100
150
200
250
300
350
400
450
1389 1390 1391 1392 1393 1394 1395 1396 1397
Bill
ion A
fs
Development Recurrent Total
Afghanistan Public Expenditure Update | 11
Aggregate Expenditure Levels and Trends
Figure 7: Real per capita expenditure has barely increased since 1392 Aggregate Real Per Capita Expenditure by Budget Type (Afs)
Expenditure has remained fairly constant as a share of GDP. Total expenditure has remained
between 25-27 percent of GDP over the five years from 1393. Development expenditure
has increased steadily from six percent of GDP to around nine percent of GDP while
recurrent expenditure has declined slightly from around 19 percent of GDP in 1393 to
around 18 percent of GDP in 1397.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1389 1390 1391 1392 1393 1394 1395 1396 1397
1389 A
fs
Development Recurrent Total
Afghanistan Public Expenditure Update | 12
Aggregate Expenditure Levels and Trends
Figure 8: Public expenditure has remained constant as a share of GDP Aggregate Expenditure by Budget Type (% GDP)
The share of the budget allocated to security remains very high but is slowly decreasing.
Security expenditure has declined from around 48 percent of total expenditures in 1393
to around 37 percent in 1397. Infrastructure has expanded as a share of the budget (nine
percent in 1393 to 16 percent in 1397) along with expenditures on social protection (seven
percent in 1393 to eight percent in 1397). Social sector expenditures have declined slightly
as a share of the budget, with health and education expenditures accounting for around
19 percent of total expenditures in 1393 compared to 18 percent in 1397. Health’s share
of expenditure has increased by two percentage points while education has declined by
three percentage points.
0%
5%
10%
15%
20%
25%
30%
1389 1390 1391 1392 1393 1394 1395 1396 1397
% G
DP
Development Recurrent Total
Afghanistan Public Expenditure Update | 13
Aggregate Expenditure Levels and Trends
Figure 9: A smaller share of the budget is being used for security Total expenditure shares by sector
Real per capita expenditures remain extremely low for basic social services and
infrastructure. Total on-budget public expenditure on security is around US$50 per year
compared to just US$17 for education, and US$8 for health. Real per capita expenditures
on security and education have been recently declining while real per capita expenditure
on infrastructure and health are gradually increasing.
0%
20%
40%
60%
80%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Economic Governance and Private Sector Development Health
Agriculture and Rural Development Social Protection
Governance, Rule of Law and Human Rights Education
Infrastructure and Natural Resources Security
Afghanistan Public Expenditure Update | 14
Aggregate Expenditure Levels and Trends
Figure 10: Real per capital spending on infrastructure and social protection is increasing Real per capita total spending by sector
0
500
1000
1500
2000
2500
3000
3500
4000
1389 1390 1391 1392 1393 1394 1395 1396 1397
13
89
Afs
Security Infrastructure and Natural Resources
Education Governance, Rule of Law and Human Rights
Social Protection Agriculture and Rural Development
Health Economic Governance and Private Sector Development
Afghanistan Public Expenditure Update | 15
Aggregate Expenditure Levels and Trends
Box 1: Is Afghanistan spending enough on health and education?
Total on-budget health expenditure in Afghanistan is around 1.5 percent of GDP or US$8 per capita per
year. Health accounts for around six percent of total government on-budget expenditure. On-budget
public health expenditures fall far short of some commonly-used international benchmarks, as shown in
the table below.
Source Benchmark Afghanistan
Abuja Declaration of 2001 15 percent of budget expenditure 6 percent of budget expenditure
2010 World Health Organization World Health Report
4-5 percent of GDP 1.5 percent of GDP
2010 World Health Organization World Health Report
US$86 per capita total public expenditure
US$8 per capita on-budget public expenditure
There are several reasons, however, why the application of such benchmarks may not be useful or
appropriate in Afghanistan.
• Income level. Afghanistan is a low-income country and simply does not have the resources
available to meet ambitious absolute health expenditure targets. Only two low-income countries
currently meet the US$86 per capita benchmark.
• High levels of off-budget health expenditures. A large proportion of public expenditure in
Afghanistan is off-budget, and therefore not reported in this note. Given the large role played
by international donors in supporting off-budget health programs, total public expenditure on
health is likely much higher than on-budget expenditure.
• High levels of private health expenditure. A relatively large share of health costs is met by end-
users in Afghanistan, especially for pharmaceuticals. Private financing of health care is not
inherently problematic, as long as costs do not become a barrier to access.
• Variance in outcomes across countries. Most international evidence suggests that countries
achieve wide variance in health outcomes at any given level of expenditure. Increasing health
expenditure does not therefore automatically lead to improved coverage or quality and should
not necessarily be considered a goal in itself.
Afghanistan Public Expenditure Update | 16
Aggregate Expenditure Levels and Trends
Based on basic international comparisons, Afghanistan does not appear to perform very differently from
other countries at similar levels of income. Afghanistan’s government expenditure on health as a share
of GDP is roughly comparable to other low-income countries. Afghanistan’s total health expenditure
(including private expenditure) also compares favorably to other countries at similar income levels.
Figure 11: Government health expenditure as % GDP
Figure 12: Total health expenditure per capita in current USD
0
0.5
1
1.5
2
2.5
3
3.5
% G
DP
0
10
20
30
40
50
60
70
80
90
100
Curr
ent
US
D
Afghanistan Public Expenditure Update | 17
Aggregate Expenditure Levels and Trends
Expenditures on education are significantly higher than on health. Total on-budget education
expenditures are equal to around 3.4 percent of GDP or US$17 per capita. Education expenditure
accounts for around 12 percent of total expenditures. Total government education expenditure as a
share of GDP is comparable to that observed in other low-income countries.
Figure 13: Total government education expenditure as a percentage of GDP
Overall, Afghansitan spends relatively small absolute amounts on health and education per capita,
reflecting its small economy and limited resources. While health allocations as a share of the budget are
small, government health expenditures as a share of GDP are comparable to other low income countries
(reflecting high government expenditure as a share of GDP relative to many low-income countries).
Overall health expenditure, taking into account off-budget financing and user contributions, is also
comparable to other low-income countries. Government expenditure on education is comparable to that
of other countries at similar levels of income.
Current levels of expenditure on health and education, however, are highly dependent on international
grant support (especially off-budget support to health). Wtihout this support, expenditures on health
and education would decline well below international comparators and even further below absolute
expenditure benchmarks. With a large share of health expenditure currently off-budget, efforts to
improve alignment between on- and off-budget delivery are vital.
0
1
2
3
4
5
6
% G
DP
Afghanistan Public Expenditure Update | 18
Recurrent Allocations and Expenditures
4. Recurrent allocations and expenditures
This section examines overall recurrent expenditure allocations and changes, by ministry,
functional classification, and economic classification. It also provides a brief analysis of
recurrent budget execution performance.
4.1. Recurrent expenditure by ministry
Recurrent expenditure is concentrated in a small group of ministries. Recurrent expenditure
is dominated by security sector agencies, the Ministry of Education, and the Ministry of
Finance. The three large security sector ministries (Defense, Interior, and National
Directorate of National Security) account for 50 percent of recurrent expenditure. The
Ministry of Public Health, Ministry of Education, and Ministry of Higher Education, on the
other hand, account for only 17 percent of recurrent expenditure.
Figure 14: Recurrent expenditure is concentrated in a small number of large ministries Total recurrent expenditure by ministry (1398)
0
10
20
30
40
50
60
70
All others Ministry ofPublic Health
IndependentDirectorate of
LocalGovernance
Ministry ofHigher
Education
Ministry ofForeignAffairs
Ministry ofFinance
GeneralDirectorate of
NationalSecurity
Ministry ofMartyrs,
Disabled andSocial Affairs
Ministry ofEducation
Ministry ofInterior
Ministry ofDefence
Bill
ion
Afs
Afghanistan Public Expenditure Update | 19
Recurrent Allocations and Expenditures
Unsurprisingly, ministries with large recurrent budgets have absorbed a large share of total
recurrent expenditure increases since 1389. The Ministry of Defense has absorbed around
25 percent of total increases in recurrent spending since 1389, with the Ministry of Interior
and Ministry of Martyrs, Disabled and Social Affairs absorbing another 13 percent and 16
percent respectively. Education ministries have absorbed around 13 percent, while the
Ministry of Health has absorbed around 1.5 percent.
Figure 15: Recurrent expenditure growth has been concentrated in large ministries Total increase in recurrent expenditure by ministry since 1389
In percentage terms, however, the picture is quite different. Nearly all ministries have
experienced a significant increase in expenditure since 1389, generally far exceeding
inflation (around 48 percent over the period). Infrastructure and social service ministries
have experienced large increases in expenditure. Ministries that have experienced little or
no increase include the Central Statistics Office, the Ministry of Commerce, and the
Ministry of Justice.
-5
0
5
10
15
20
25
30
35
40
Min
istr
y o
f Justice
Min
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y o
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ecto
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it O
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ecto
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vir
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Min
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ter
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otics
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istr
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istr
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ction
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Min
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lic H
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urt
Inde
pe
nde
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Dir
ecto
rate
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nce
Min
istr
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ore
ign
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air
s
Min
istr
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Min
istr
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irecto
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Min
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, D
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cia
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Min
istr
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efe
nce
Bill
ions
Afghanistan Public Expenditure Update | 20
Recurrent Allocations and Expenditures
Figure 16: Recurrent expenditure is concentrated in a small number of large ministries Total recurrent expenditure by ministry (1398)
4.2. Recurrent expenditure by function
In terms of sectoral allocations, recurrent expenditure remains dominated by security and
public order (56%). However, the security and public order share of the budget has been
in gradual decline since 1392, when it peaked at 62 percent. The decline in security
spending as a share of the budget has made way for increased expenditure on
administrative activities – including under general public services and housing and
community amenities. Social protection expenditures, including payments to martyrs,
have also increased. The share of expenditure on social services has remained fairly
constant – health expenditure has remained a small but steady share of expenditure.
Recurrent expenditure on education has declined slightly to around 17 percent of total
recurrent spending from 18 percent in 1389.
-200%
0%
200%
400%
600%
800%
1000%
1200%
Geo
des
y an
d C
arto
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Off
ice
Lega
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Min
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Min
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ork
s
Dir
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of
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Min
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ines
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Min
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ents
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ice
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us
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airs
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ater
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ate
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rs
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ffai
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eral
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ecto
rate
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tio
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aste
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ared
nes
s
Afghanistan Public Expenditure Update | 21
Recurrent Allocations and Expenditures
Figure 17: Recurrent expenditure is dominated by defense, public order and safety, and education Total recurrent expenditure by function (% of total)
Broad trends in proportional allocations are reflected in real per capita recurrent
expenditure trajectories. Security sector expenditures fairly consistently increased from
1389 until 1395, before declining slightly since 1396. Throughout the period, defense and
public order remain the largest per capita expenditure categories. There has been a recent
increase in general public expenditures, driven by increased salary payments in central
government agencies. Per capita education expenditures have been steady at around
AF800 for several years after peaking at AF880 in 1393. Health per capita expenditure has
remained steady, but at low levels. Real per capita expenditure on general public services
and social protection has been increasing significantly over recent years.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1390 1391 1392 1393 1394 1395 1396 1397
Defence Public order and safety Education
General public services Social Protection Economic affairs
Health Recreation, culture and religion Housing and community amenities
Environmental protection
Afghanistan Public Expenditure Update | 22
Recurrent Allocations and Expenditures
Figure 18: Real per capita spending on security and public order has recently declined Real per capita expenditure by function
4.3. Recurrent expenditure by economic classification
Recurrent expenditure remains heavily dominated by wage and salary expenditure. While
there has been a long-term trend towards improved balance between wages vs. goods and
services, this trend reversed in 1396, with the share of recurrent expenditure on wages
and salaries again increasing. Wage and salary expenditure currently accounts for around
71 percent of total recurrent expenditures.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1389 1390 1391 1392 1393 1394 1395 1396 1397
13
89
Afs
Defence Economic affairs Education
Environmental protection General public services Health
Housing and community amenities Public order and safety Recreation, culture and religion
Social Protection
Afghanistan Public Expenditure Update | 23
Recurrent Allocations and Expenditures
Figure 19: Wages and salaries continue to dominate the recurrent budget Total recurrent expenditure by economic classification (% of total)
The absolute increase in expenditure since 1389 is heavily concentrated in compensation of
employees, reflecting the overall structure of the budget. Nearly three-quarters of all
increased expenditure between 1389 and 1397 was absorbed by compensation and fuel
costs. But these increases have not been disproportionate relative to other expenditure
items, on average, with wage and salary costs representing a declining share of total
expenditure over the period (despite increasing over recent years).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1390 1391 1392 1393 1394 1395 1396 1397
Wages and Salaries Expenditure Use of Goods and Services SubsidiesGrants&SocialBenefits
Acquisition of Assets Interest & Repayment of Loans
Afghanistan Public Expenditure Update | 24
Recurrent Allocations and Expenditures
Figure 20: Recurrent expenditure growth has been driven by wages and salaries Total recurrent expenditure growth by ministry (1389-1397)
Despite rapid absolute growth, compensation of employees has remained steady as a share
of GDP. Expenditure on wages and salaries has remained constant at around 13 percent of
GDP over the past five years. Nominal increases in wage and salary expenditure were
largely driven by increases in allowances up to 1397, reflecting attempts to maintain
overall compensation in the context of inflation-driven declines in real base wages and
salaries. Wage and salary expenditures have remained concentrated in security agencies
and the Ministry of Education. However, the share of total wage and salary expenditure
absorbed by smaller ministries has gradually been increasing over time.
-10
0
10
20
30
40
50
60
70
80
90
Bill
ions
Afghanistan Public Expenditure Update | 25
Recurrent Allocations and Expenditures
Figure 21: Wages and salaries have been fairly constant as a share of the economy Total recurrent wage and salary expenditure as a share of GDP
Figure 22: Expenditure growth on salaries and wages has been driven mostly by allowances Total recurrent wage and salary expenditure by category
0%
2%
4%
6%
8%
10%
12%
14%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Title
0
20
40
60
80
100
120
140
160
180
200
1389 1390 1391 1392 1393 1394 1395 1396 1397
Bill
ion
s
Other allowances Hazard or regional pay (uniformed)
Food for employees (uniformed) Civilian Employees (contract workers)
Civilian employees (permanent) Teachers
Armed forces Military officers
Afghanistan Public Expenditure Update | 26
Recurrent Allocations and Expenditures
Figure 23: Expenditure growth on salaries and wages has been concentrated in security agencies Total recurrent wage and salary expenditure by ministry
Overall, in percentage terms, the most rapid growth of recurrent expenditure has been in
subsidies, debt servicing, social benefits, fuel, and food. Expenditure on most items has
exceeded price increases, reflecting service expansions. Despite accounting for the largest
proportion of absolute cost increases, wages and salaries have not increased at a
particularly rapid rate relative to most other expenditure items, albeit much faster than
the pace of inflation (denoted by the dark red line).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Ministry of Defence Ministry of Interior
Ministry of Education General Directorate of National Security
Ministry of Higher Education Other
Afghanistan Public Expenditure Update | 27
Recurrent Allocations and Expenditures
Figure 24: Recurrent expenditure has grown faster than inflation for most line items Total recurrent expenditure by ministry (1397)
4.4. Recurrent execution performance
Overall, recurrent budget execution is strong across most ministries. The majority of
ministries have an execution rate of above 90 percent. There are, however, some
ministries in which execution performance has persistently been weak. Some small
agencies have been unable to execute their recurrent budget, including the Human Rights
Commission, the Cartography Office, and the Electoral Complaints Office. Large and
persistent underspends in some of the largest ministries, including the Ministry of Defense
and the Ministry of Interior (Afs 18 billion and Afs 12 billion respectively) are often driven
by the inability of ministries to meet business process requirements to access grant
resources for key expenditure items.
-200%
0%
200%
400%
600%
800%
1000%
Afghanistan Public Expenditure Update | 28
Recurrent Allocations and Expenditures
Figure 25: Recurrent budget execution is generally strong Recurrent budget execution by ministry (3-year average to 1397)
Weaknesses in overall recurrent budget execution are driven by underspending on goods
and services. Historically and in absolute terms, expenditure on goods and services has
fallen farthest short of budgeted allocations. In percentage terms, the greatest under-
spends have been concentrated in acquisition of assets, reflecting weaknesses in
procurement systems and processes. For both items, the size of underspends has been
declining over time. Wages and salaries are typically significantly underspent in absolute
terms (with underspends of up to Afs nine billion. But this reflects the overall large
allocations to wages and salaries, with underspends very limited in percentage terms
(averaging four percent over the past five years).
0%
20%
40%
60%
80%
100%
120%
140%
Inde
pe
nde
nt
Bo
ard
of
ne
w K
ab
ul
Afg
ha
nis
tan
In
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an
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Min
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Min
istr
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ent
Min
istr
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irs
Min
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sid
ents
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ice
Min
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om
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ine
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ustr
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pe
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or…
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…
Min
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abili
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…
Min
istr
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Min
istr
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airs
Inde
pe
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Dir
ecto
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Dir
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nce
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n a
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re
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al A
ssem
bly
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a
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gri
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re
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men
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istr
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ign
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s
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ice
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the N
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co
nom
y…
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io a
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ha
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tan
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n
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istr
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ealth
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al A
ssem
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ole
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urt
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aste
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ess
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irecto
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ork
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istr
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art
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ction
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pe
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ral C
om
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ints
…
Afghanistan Public Expenditure Update | 29
Recurrent Allocations and Expenditures
Figure 26: Recurrent under-spends on goods and services drive weaknesses in execution Recurrent budget execution by economic classification
Figure 27: Recurrent under-spends on goods and services drive weaknesses in execution Recurrent budget execution by economic classification
-40
-30
-20
-10
0
10
20
Bill
ions
1393 1394 1395 1396 1397
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
1393 1394 1395 1396 1397
Afghanistan Public Expenditure Update | 30
Recurrent Allocations and Expenditures
Box 2: How ‘big’ is the Afghanistan civil service and has it been growing?
There is no simple ‘correct’ size of the public sector. The functions, size, geography, administration, and
policies of Government differ across countries, which make meaningful comparisons difficult without
controlling for these factors. For example, the use of extensive non-government organizations to deliver
basic healthcare services in Afghanistan reduces expenditure on government salaries and wages
compared with countries that directly deliver these services.
A simple comparison of wage and salary expenditure between Afghanistan and a range of comparator
countries shows that wage and salary expenditure is unusually high in Afghanistan. This result, however,
reflects the fact that Afghanistan is involved in an active and prolonged civil conflict. If expenditure on
security agency wages and salaries is excluded, the cost of the public service appears low relative to most
comparators.
Figure 28: Wages and Salaries as percentage of GDP - Afghanistan and comparators
The number of civil servants has increased significantly over recent years. The overwhelming majority of
increases in civilian civil service employment reflect the hiring of new teachers through the Ministry of
Education. The Ministry of Education accounts for 85 percent of the growth in civil service numbers
between 2004 and 2016.
Figure 29: Total number of civil servants (civilian)
Source: World Bank, 2018, Managing the civilian wage bill.
0%
2%
4%
6%
8%
10%
12%
14%
Afghanistan(Civilian +Uniformed)
Afghanistan(Civilian)
Mongolia Turkey RussianFederation
OECD Average Kyrgyz Republic Maldives
Perc
ent
GD
P
0
100
200
300
400
500
1389 1390 1391 1392 1393 1394 1395
Thousands
Ministry of Education Other
Afghanistan Public Expenditure Update | 31
Development Allocations and Expenditures
5. Development Allocations and Expenditures
This section examines overall development expenditure allocations and changes, by
ministry, functional classification, and economic classification. It also provides a brief
analysis of development budget execution performance.
5.1. Development expenditures by ministry
Development expenditures are concentrated within a fairly small group of ministries but
spread more widely than recurrent expenditures. The Ministry of Public Works, Ministry of
Rural Rehabilitation and Development, Ministry of Public Health, and DABS each account
for between 13 percent and 15 percent of total development expenditures.
Figure 30: Development expenditures are concentrated in a small number of ministries Development expenditure by ministry (1397)
0
5
10
15
20
25
30
All others Ministry ofEducation
Civil AviationAuthority
Ministry ofFinance
Ministry ofUrban
Development
Ministry ofEnergy and
Water
Ministry ofAgriculture
Da BrishnaShirkat
Ministry ofPublic Health
Ministry ofRural
Rehabilitationand
Development
Ministry ofPublic Works
Bill
ions
Afghanistan Public Expenditure Update | 32
Development Allocations and Expenditures
Increases in development expenditures since 1389 have been spread across several
ministries. The greatest increases in development expenditure has been to the Ministry of
Public Health. Additional large increases in development expenditure have occurred
through ministries providing economic infrastructure, including DABS, the Ministry of
Agriculture, and the Ministry of Public Works. Development expenditure has slightly
declined since 1389 for the Ministry of Education.
Figure 31: Increases in development expenditure have been concentrated in health and infrastructure Change in development expenditure by ministry (1389-1397)
-2
0
2
4
6
8
10
12
14
Min
istr
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n
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istr
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sid
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Min
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ura
l…
Min
istr
y o
f P
ub
lic H
ealth
Bill
ions
Afghanistan Public Expenditure Update | 33
Development Allocations and Expenditures
Figure 32: Development expenditure have increased for most ministries in percentage terms Change in development expenditure in percent (1389-1397)
In terms of trends in per capita expenditure over time, the ministries with the consistently
largest development expenditures have been the Ministry of Rural Rehabilitation and
Development and the Ministry of Public Works. Over recent years, allocations to the
Ministry of Public Health and DABS have increased rapidly. Development expenditures
from Ministry of Education have declined over time in real per capita terms, from around
Afs 163 per capita in 1393 to just Afs 67 per capita in 1397.
-300%
-100%
100%
300%
500%
700%
900%
1100%
1300%
1500%M
inis
try
of
Tran
spo
rt a
nd
Avi
atio
n
Scie
nce
Aca
dem
y
Nat
ion
al A
ssem
bly
Mes
han
ro J
irga
Nat
ion
al O
lym
pic
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mm
itte
e
Min
istr
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efen
ce
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n
Min
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y o
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tio
n
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ntr
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dit
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ice
Min
istr
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en A
ffai
rs
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rem
e C
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rt
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istr
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stic
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Min
istr
y o
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ergy
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d W
ater
Min
istr
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ub
lic W
ork
s
Gen
eral
Dir
ecto
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of
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ion
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ecu
rity
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istr
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ines
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d In
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stri
es
Nat
ion
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ssem
bly
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lesi
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ga
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ecto
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ron
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t
Min
istr
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form
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ltu
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Min
istr
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nan
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istr
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istr
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istr
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rs, D
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ffai
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istr
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istr
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ies
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ecto
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lic H
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gric
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Min
istr
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aj a
nd
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igio
us
Aff
airs
Min
istr
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teri
or
Ind
epen
den
t D
irec
tora
te o
f Lo
cal G
ove
rnan
ce
Min
istr
y o
f Fo
reig
n A
ffai
rs
Off
ice
of
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min
istr
ativ
e A
ffai
rs &
Co
un
cil o
f …
Cen
tral
Sta
tist
ics
Off
ice
Afghanistan Public Expenditure Update | 34
Development Allocations and Expenditures
Figure 33: Real per capita development expenditures have increased through public works and health Real per capita development expenditure by ministry (1389-1397)
5.2. Development expenditures by function
In terms of functional classifications of development expenditures, there has been a
persistent trend over recent years towards increased expenditure on infrastructure and
natural resources. Allocations to this category have roughly doubled over the past four
years, far outstripping the broader pace of growth in development spending. Expenditure
growth in infrastructure and natural resources has come largely at the cost of expenditure
on agriculture and education, which have seen substantial declined in development
expenditures over recent years.
0
50
100
150
200
250
300
350
400
450
500
1389 1390 1391 1392 1393 1394 1395 1396 1397
1389 A
fs
Civil Aviation Authority Ministry of Urban Development
Ministry of Agriculture Ministry of Education
Ministry of Energy and Water Da Brishna Shirkat
Ministry of Public Health Ministry of Rural Rehabilitation and Development
Ministry of Public Works
Afghanistan Public Expenditure Update | 35
Development Allocations and Expenditures
Figure 34: Development expenditure is increasingly dominated by agriculture and infrastructure Development expenditure by sector (% of total)
The broad sectoral allocation trends discussed above are reflected in real per capita
expenditure trends. Real per capita expenditure on infrastructure and natural resources
has increased rapidly. There has been a less-pronounced, but still significant increase in
real per capita development expenditure on health. Development expenditures on
education, on the other hand, have remained stagnant and actually declined in 1396 to the
lowest level since 1389 (Afs 84 in 1389 terms).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Infrastructure and Natural Resources Agriculture and Rural Development
Health Governance, Rule of Law and Human Rights
Economic Governance and Private Sector Development Education
Security Social Protection
Afghanistan Public Expenditure Update | 36
Development Allocations and Expenditures
Figure 35: There have been large increases in real per capita development spending on infrastructure Real per capita development expenditure by sector
5.3. Development expenditures by economic classification
In terms of economic classifications, development expenditures have been significantly
reoriented over recent years towards capital investments. The proportion of the
development budget allocated to acquisition of assets has increased from 50 percent in
1393 to 66 percent in 1397.
The most rapid percentage increases in development expenditure have been for tools and
materials, utilities, machinery, and travel. In absolute terms, however, the largest increases
have been in expenditure have been for buildings, contracted services, and machinery.
While expenditure on travel has increased rapidly in percentage terms, it accounts for only
a small share of development expenditures, with total expenditure growing by only around
Afs 410 million since 1389.
0
200
400
600
800
1000
1200
1389 1390 1391 1392 1393 1394 1395 1396 1397
13
89
Afs
Agriculture and Rural Development
Economic Governance and Private Sector Development
Education
Governance, Rule of Law and Human Rights
Health
Infrastructure and Natural Resources
Security
Social Protection
Afghanistan Public Expenditure Update | 37
Development Allocations and Expenditures
Figure 36: Development expenditure has increasingly focused on capital investment Development expenditure by economic classification (% of total)
Figure 37: Development expenditure growth has focused on buildings, contracted services, and machinery Absolute change in development expenditure by economic classification (1389 – 1397)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Use of Goods and Services SubsidiesGrants&SocialBenefits Acquisition of Assets
-5
0
5
10
15
20
25
30
35
40
Bill
ions
Afghanistan Public Expenditure Update | 38
Development Allocations and Expenditures
Figure 38: Development expenditure has increased fastest on utilities, tools, and machinery Change in development expenditure by economic classification in percentage (1389-1397)
5.4. Development budget execution performance
Execution of the development budget is extremely varied across ministries. Average
execution rates over the past three years ranging from the Office of Disaster Preparedness,
with an execution rate of just 20 percent, to several ministries that overspent original
budget allocations. There is no clear correlation between the size of development
allocations and execution rates, with some very small ministries having poor execution
rates and some ministries successfully executing very large development allocations
(Ministry of Rural Rehabilitation and Development, for example).
In terms of total under-expenditures, weak development budget execution is explained by a
relatively small number of poorly-performing ministries with very large allocations. The
Ministry of Public Works had average under-expenditure of around 14 billion per annum
over the past three years. The Ministry of Education also accounts for around Afs 9 billion
of under-expenditure.
-200%
0%
200%
400%
600%
800%
1000%
Afghanistan Public Expenditure Update | 39
Development Allocations and Expenditures
Development budget execution has improved significantly over recent years. Development
budget execution reached 92.2 percent in 2018, rising from 67 percent in 2017. As a result,
nominal development expenditures rose by 23 percent (approximately Afs 23.6 billion) in
2018 over 2017 levels. Improvements in budget execution have been supported by
reforms introduced in the 2018 budget. Automatic rollovers of development budget
allocations were ended, in favor of careful review of project performance and expenditure
estimates.
Figure 39: Development budget execution varies strongly by ministry Development budget execution by ministry (3-year average to 1397)
0%
20%
40%
60%
80%
100%
120%
140%
Off
ice
of
Dis
aste
r P
rep
ared
nes
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fgh
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tan
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ion
al S
tan
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d…
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al O
lym
pic
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mm
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ce A
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emy
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al A
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lesi
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gaM
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Au
dit
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ice
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ion
al A
ssem
bly
Mes
han
ro J
irga
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kno
wn
Dir
ecto
rate
of
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Min
istr
y o
f C
om
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nW
ater
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pp
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aliz
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istr
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istr
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istr
y o
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ffai
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istr
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ign
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min
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e A
ffai
rs &
…C
entr
al S
tati
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s O
ffic
e
Afghanistan Public Expenditure Update | 40
Large Ministry Profiles
6. Large Ministry Profiles
In this section, we present brief expenditure of five key ministries - the Ministry of Defense,
the Ministry of Interior, the Ministry of Education, the Ministry of Martyrs, Disabled, and
Social Affairs, and the Ministry of Public Health.
6.1. Ministry of Defense
• Ministry of Defense is the largest spending ministry, accounting for 25 percent of
recurrent expenditure in 1397. Ministry of Defense expenditure increased markedly
to 1392 before stabilizing in nominal terms. Allocations decreased significantly in
1396, with fuel procurement being taken off-budget, before increasing again in
1397. Expenditure is almost entirely through the recurrent budget, with only small
amounts of development expenditure in 1392 and 1393.
• In real per capita terms and as a share of the budget, Ministry of Defense spending
has been declining steadily since 1392. The pace of decline accelerated in 1396,
with Ministry of Defense’s share of the budget declining from 20 percent to 16
percent, as a large share of fuel procurement was taken off-budget.
• Wages and salaries completely dominate expenditure, reaching 91 percent of total
recurrent expenditure in 1397. This reflects the large role played by off-budget
grant support in financing complementary inputs.
Afghanistan Public Expenditure Update | 41
Large Ministry Profiles
Figure 40: Expenditure by type Figure 41: Real per capita expenditure by type
Figure 42: Share of budget by type
Figure 43: Expenditure by economic classification
0
10
20
30
40
50
60
70
80
1389 1390 1391 1392 1393 1394 1395 1396 1397
Bill
ion A
fs
Development Recurrent Total
0
200
400
600
800
1000
1200
1400
1600
1800
1389 1390 1391 1392 1393 1394 1395 1396 1397
1389 A
fs
Development Recurrent Total
0%
5%
10%
15%
20%
25%
30%
35%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Development Recurrent Total
0%
20%
40%
60%
80%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Acquisition of Assets
SubsidiesGrants&SocialBenefits
Use of Goods and Services
Wages and Salaries Expenditure
Afghanistan Public Expenditure Update | 42
Large Ministry Profiles
6.2. Ministry of Interior
• Ministry of Interior is the second largest spending ministry, accounting for around
16 percent of expenditures in 1396. Recurrent expenditures increased steadily
between 1389 and 1394 but have since declined. In real per capita terms,
expenditures have declined by nearly 30 percent since 1394.
• These declines are reflected in the Ministry of Interior share of the budget, which
has fallen from 18 percent in 1389 to 13 percent in 1397.
• Of the increase in recurrent expenditure over the period, the majority was for wage
and salary expenditures and for fuel.
• Of the very limited development expenditures over the period (normally around
one percent of total development spending), the majority was used for contracted
services and buildings and structures.
Afghanistan Public Expenditure Update | 43
Large Ministry Profiles
Figure 44: Expenditure by type Figure 45: Real per capita expenditure by type
Figure 46: Share of budget by type
Figure 47: Expenditure by economic classification
0
10
20
30
40
50
60
70
1389 1390 1391 1392 1393 1394 1395 1396 1397
Bill
ion A
fs
Development Recurrent Total
0
200
400
600
800
1000
1200
1400
1600
1389 1390 1391 1392 1393 1394 1395 1396 1397
1389 A
fs
Development Recurrent Total
0%
5%
10%
15%
20%
25%
30%
1389 1390 1391 1392 1393 1394 1395 1396 1397Development Recurrent Total
0%
20%
40%
60%
80%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Acquisition of Assets
SubsidiesGrants&SocialBenefits
Use of Goods and Services
Wages and Salaries Expenditure
Afghanistan Public Expenditure Update | 44
Large Ministry Profiles
7.1. Ministry of Education
• The Ministry of Education accounted for around 10 percent of total expenditure in
1397. Overall expenditure levels increased steadily from 1389 to 1393, and then
stabilized in nominal terms. While recurrent expenditures slightly increased, this
was offset by reductions in development expenditures.
• In real per capita terms, both recurrent and development expenditures have been
decreasing steadily from 1393. Real per capita recurrent expenditure declined by
around 11 percent over three years, while development expenditures declined by
45 percent.
• Declining expenditure levels reflect the Ministry of Education’s declining share in
both the recurrent and development budgets. Education’s share of the recurrent
budget has been in fairly consistent decline since 1389, declining from 17 percent
in 1389 to 13 percent in 1397. The trajectory of development expenditure has been
volatile, but since 1393, Education’s share of the development budget has declined
from nine percent to three percent.
• The vast majority of increases in expenditure have been absorbed by salaries and
wages. Total wage and salary expenditure has increased by around 140 percent or
Afs 9 billion since 1389.
• In terms of major programs, resource allocation has been fairly consistent over
time. The majority of new resources have been allocated to basic and Islamic
education, retaining its share of total expenditure.
• The majority of development expenditures have been used for buildings and
structures and contracted services.
Afghanistan Public Expenditure Update | 45
Large Ministry Profiles
Figure 48: Expenditure by type Figure 49: Real per capita expenditure by type
Figure 50: Share of budget by type
Figure 51: Expenditure by economic classification
Figure 52: Recurrent expenditure by program
0
5
10
15
20
25
30
35
40
45
1389 1390 1391 1392 1393 1394 1395 1396 1397
Bill
ion A
fs
Development Recurrent Total
0
100
200
300
400
500
600
700
800
900
1000
1389 1390 1391 1392 1393 1394 1395 1396 1397
1389 A
fs
Development Recurrent Total
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1389 1390 1391 1392 1393 1394 1395 1396 1397Development Recurrent Total
84%
86%
88%
90%
92%
94%
96%
98%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Acquisition of Assets
Use of Goods and Services
Wages and Salaries Expenditure
75%
80%
85%
90%
95%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Education Management
Literacy
Technical and Vocational Education & Trainings (TVET)
Curriculum Development ,Teacher Education and Education Science
General and Islamic Education
Afghanistan Public Expenditure Update | 46
Large Ministry Profiles
7.2. Ministry of Martyrs, Disabled, and Social Affairs
• Expenditure through the Ministry of Martyrs, Disabled, and Social Affairs has
expanded very rapidly, increasing from around Afs five billion in 1389 to more than
Afs 29 billion in 1397.
• In real per capita terms, expenditure has also increased rapidly – by more than 200
percent since 1389.
• This growth has been reflected in the Ministry of Martyrs, Disables, and Social
Affairs share of the budget, which increased from around three percent in 1389 to
eight percent by 1397. Expenditure has been overwhelming through the recurrent
budget, with the MMDSA accounting for less than one percent of the development
budget.
• Expenditure growth has been concentrated in the martyred and disabled program,
which has grown from around Afs 4 billion to around Afs 15 billion, and now
accounts for around 60 percent of total expenditure.
• In terms of economic classifications, expenditure growth has been most rapid in
social benefits, with the nominal increase hugely outstripping growth in other
areas (around Afs 14 billion increase, or 300 percent since 1389).
• Limited development expenditures have been concentrated in contracted services.
Afghanistan Public Expenditure Update | 47
Large Ministry Profiles
Figure 53: Expenditure by type Figure 54: Real per capita expenditure by type
Figure 55: Share of budget by type
Figure 56: Expenditure by economic classification
Figure 57: Recurrent expenditure by program
0
5
10
15
20
25
30
35
1389 1390 1391 1392 1393 1394 1395 1396 1397
Bill
ion A
fs
Development Recurrent Total
0
100
200
300
400
500
600
700
1389 1390 1391 1392 1393 1394 1395 1396 1397
1389 A
fs
Development Recurrent Total
0%
2%
4%
6%
8%
10%
12%
1389 1390 1391 1392 1393 1394 1395 1396 1397Development Recurrent Total
0%
20%
40%
60%
80%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Acquisition of Assets
SubsidiesGrants&SocialBenefits
Use of Goods and Services
Wages and Salaries Expenditure
0%10%20%30%40%50%60%70%80%90%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Labor Support ProgramSocial Support ProgramMartyrs and DisabledMangagment and Operations Program
Afghanistan Public Expenditure Update | 48
Large Ministry Profiles
7.3. Ministry of Public Health
• Expenditure through the Ministry of Public Health have expanded very rapidly,
increasing from around Afs six billion in 1389 to more than Afs 21 billion in 1397.
• In real per capita terms, expenditure has also increased rapidly – roughly doubling
since 1389. Growth has been overwhelmingly concentrated in development
expenditures. Development expenditure per capita through the Ministry of Public
Health has increased from Afs 148 in 1389 to Afs 338 in 1397. Recurrent
expenditure per capita through the Ministry of Public Health has increased only
marginally – from Afs 71 in 1389 to Afs 84 in 1397.
• Expenditure growth has been reflected in the Ministry of Public Health’s share of
the budget, which increased from around four percent in 1389 to six percent by
1397. The Ministry of Public Health’s share of the development budget has
increased from 10 percent in 1389 to 14 percent in 1397, while it’s share of the
recurrent budget has remained static at around two percent.
• Recurrent expenditure has increasingly been utilized for operating costs, with the
share of expenditure on wages and salaries consistently declining. Recurrent
expenditures have been increasingly channeled through the administrative support
program, which has grown from around Afs one billion to around Afs 2.6 billion.
Afghanistan Public Expenditure Update | 49
Large Ministry Profiles
Figure 58: Expenditure by type Figure 59: Real per capita expenditure by type
Figure 60: Share of budget by type
Figure 61: Expenditure by economic classification
Figure 62: Recurrent expenditure by program
0
5
10
15
20
25
1389 1390 1391 1392 1393 1394 1395 1396 1397
Bill
ion A
fs
Development Recurrent Total
0
50
100
150
200
250
300
350
400
450
1389 1390 1391 1392 1393 1394 1395 1396 1397
1389 A
fs
Development Recurrent Total
0%
2%
4%
6%
8%
10%
12%
14%
16%
1389 1390 1391 1392 1393 1394 1395 1396 1397Development Recurrent Total
0%
20%
40%
60%
80%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Acquisition of Assets
Use of Goods and Services
Wages and Salaries Expenditure
0%
20%
40%
60%
80%
100%
1389 1390 1391 1392 1393 1394 1395 1396 1397
Institutional Development Health Services Provision Administrative Support