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    Development Partnership

    GOALS
    When the National Unity Government took office in 2014, President Ashraf Ghani announced the country was in the Transformation Decade (2014-2024), with the goal of becoming self-reliant by 2024.
    The Tokyo Mutual Accountability Framework (TMAF) set the foundation for Afghanistan’s partnership for development with the international community. At the Senior Officials Meeting in September 2015, Afghanistan and its international partners updated the Tokyo Mutual Accountability Framework (TMAF) in line with the Realizing Self-Reliance Policy Paper, which was presented at the London Conference 2014 just after the National Unity Government took office.
    The revised framework – Self-Reliance through Mutual Accountability Framework (SMAF) – includes short-term deliverables that measured the progress of the reform and development partnership agenda. At the Brussels Conference on Afghanistan in October 2016, the National Unity Government (NUG) and the international community agreed upon 24 new Self-Reliance through Mutual Accountability Framework (SMAF) indicators called SMART SMAF.
    The overarching goals are to re-arrange the country’s development partnerships to gradually reduce the country’s dependence on aid increase aid effectiveness, increase accountability, alignment and transparency of donor aid and including gradually more aid on-budget, improve Afghanistan’s financial management systems, and increase the level of trust between donors and the government.

    OVERALL PROGRESS
    Achieved (3/11): 27.0 Achieved (3/11): 27.0 %Partially achieved and ongoing (7/11): 64.0 %Partially achieved and ongoing (7/11): 64.0 %In process (1/11): 9.0 %In process (1/11): 9.0 %Partially achieved and ongoing (7/11)Percentage: 64.0
    1. Reduce Afghanistan’s dependence on aid and increase aid effectiveness

    DELIVERABLES
    – Donors must commit to pool resources behind the ANPDF strategy, particularly in support for the medium term expenditure framework
     PROGRESS: – Partially achieved and on-going.
    • Donors have decreased the proportion of on-budget assistance in 2017 compared to 2016 levels. In 2017, the total development aid channeled on-budget was 56% while in 2016 the estimations showed 58.5% was on-budget. However, donors will continue to assess possibilities for increasing the proportion of on-budget assistance, pending government progress in financial reforms, especially Public Finance Management.
    • Donors consider more than 80 percent of their assistance to be aligned with the Afghanistan National Peace and Development Framework; however, to date, 8 out of 10 of the National Priority Programs (NPPs) are completed and approved by the Cabinet or High Councils, including Citizen’s Charter, Women’s Economic Empowerment Program, Comprehensive Agricultural, National Infrastructure, Urban Development, Justice Sector Reform, Private Sector Development and National Minerals and Resources Development Program. Remaining to be finalized are the Effective Governance and Subnational Government NPP and the Human Capital NPP. The expectation is that the government and development partners work together to finalize the remaining NPPs and that donors take serious steps towards aligning their off-budget projects to these priority programs. MoF will hold sector-wide dialogues with donors about this.
    – Donors and Afghan government must reach agreement on the pre-conditions for expanding on budget support, either directly or through ARTF
     PROGRESS: – Achieved.
    • On June 25, 2018, the Ministry of Finance and the World Bank jointly hosted the Steering Committee meeting of the Afghanistan Reconstruction Trust Fund (ARTF) at the Presidential Palace, where 34 donor countries committed $2.485 billion to support development programs  laid out in the Afghanistan National Peace and Development Framework (ANPDF) and National Priority Programs (NPPs) over the next three years.
    • The Steering Committee approved the ARTF’s proposed Partnership Framework and Financing Program (PFFP) for the financial years1397-1399 (2018-2020), which outlines how the government will spend those funds with support from international partners. Under the new PFFP, funding will continue to be provided for the priorities in the Afghanistan National Peace and Development Framework, introduced at the 2016 Brussels Conference on Afghanistan. The largest portion of ARTF funds, 37 percent, will be devoted to poverty reduction, service delivery, and citizen engagement, including programs in health, education, and the Citizens’ Charter.
    – Improve dialogue and review procedures to ensure alignment of all financing with government priorities and regarding quality of preparation
     PROGRESS: – Partially achieved and on-going.
    • •    Donors consider more than 80 percent of their assistance to be aligned with the Afghanistan National Peace and Development Framework; however, to date, 8 out of 10 of the National Priority Programs (NPPs) are completed and approved by the Cabinet or High Councils, including Citizen’s Charter, Women’s Economic Empowerment Program, Comprehensive Agricultural, National Infrastructure, Urban Development, Justice Sector Reform, Private Sector Development and National Minerals and Resources Development Program. Remaining to be finalized are the Effective Governance and Subnational Government NPP and the Human Capital NPP. The expectation is that the government and development partners work together to finalize the remaining NPPs and that donors take serious steps towards aligning their off-budget projects to these priority programs. MoF will hold sector-wide dialogues with donors about this.
    • •    Further steps taken to increase alignment of budgeting, donor aid, and government policy include:
      • MoF incorporated the Policy Department and the Macro-Fiscal Performance Directorate (MFPD) in the budget hearing sessions.
      • The Policy Department, the Aid Management Directorate (AMD) and MFPD are developing a more effective approach for prioritization, savings and expenditures for the mid-year review.
      • Financing agreements and other similar provisions are in place for all projects financed through on-budget modalities.
      • Progress on off-budget projects is varied. Twenty-three donors provide part of their development assistance through off-budget modalities; of these, financing agreements are available for 44% of contributions.
    – Increased use of reimbursement for delivered results and the successful implementation of strategic reforms
     PROGRESS: – Partially achieved and on-going.
    • Donors are increasingly using reform-based incentive modalities to channel funding through the national budget. This approach is a departure from traditional project-based financing to flexible on-budget support which is conditional on government progress on agreed reforms. Current incentive modalities include the ARTF Incentive Program, the US-supported New Development Partnership (NDP), the EU-supported State Building Contract (SBC), the SMAF Incentive Program, and the Extended Credit Facility Arrangement with the International Monetary Fund.
    – Strengthen mechanisms for audit and accountability
     PROGRESS: – Partially achieved and on-going.
    • Financing agreements and other similar provisions are in place for all projects financed through on-budget modalities, increasing accountability. Progress on off- budget projects is varied. Twenty-three donors provide part of their development assistance through off-budget modalities; of these, financing agreements are available for 44% of contributions, which represents only modest progress since the 2015 financial year.
    • The government is working with development partners to put in place specific arrangements to increase accountability. Donors have been encouraged in a number of forums to integrate their project management units (PMUs) with a specific line ministry. All donors are at different stages of integrating PMUs/PIUs with respective ministries, or in some cases, in closing the PMUs/PIUs. Donors are seeking clarity and uniformity in the interpretation/understanding of PMUs/PIUs together with Government/line ministries. Where integration with relevant line ministries is concerned, donors are still hesitant to rely on government structures and systems considering low capacities and issues related to the retention of qualified PMO staff with low remuneration.
    • The Ministry of Finance circulated an official letter to the all line ministries and governmental agencies to submit their progress report on developing specific transition plans for PMUs.
    • Beginning in 2017, donors were required to confirm that their contractors would implement the National Technical Assistance scale in programs, and verify compliance semi-annually. The Ministry of Finance’s Directorate General of Budget held several workshops and meetings with donors (World Bank, Asian Development Bank, DFID and US Development Central Department). The donors agreed that their contractors who have personnel imbedded within national-level government ministries in technical assistance positions will implement the NTA guidelines and share the message with their contractual partners. Out of 13 donors who have reported against this deliverable, six have reported to be in full compliance with this commitment. Two donors have taken specific action to encourage compliance among implementing partners and are close to full compliance. The remaining five donors do not fund national technical assistance positions.
    • All new technical assistance advisors are approved by the Ministry of Finance.
    2. Increase trust level with donors and improve financial management
    DELIVERABLES
    – Implement the national anti-corruption action plan and legal framework
     PROGRESS: – Partially achieved and on-going.
    • The National Unity Government is implementing its Afghanistan National Strategy for Combatting Corruption, under the guidance of the High Council for Rule of Law and Anti-Corruption. The Anti-Corruption Justice Center was established to prosecute high-level cases of corruption in the Afghan government. The National Procurement Authority was established to centralize government procurement to safeguard it from corruption.
    • The government has made substantial progress over the past three years, as documented most recently in UNAMA and SIGAR’s respective reports on the government’s progress in implementing the national anti-corruption strategy. So far, full implementation of 21 benchmarks of the strategy have been completed on or ahead of schedule. 10 other benchmarks are in the advanced stages of implementation. From the remaining benchmarks, 4 of them have been partially implemented, 2 have been launched and only 1 of them has no progress.
    • For more information, please view the ‘Rooting Out Corruption’ section of this tracker.
    – Pass laws criminalizing corruption in line with the UN Convention against Corruption
     PROGRESS: – Achieved.
    • The new Penal Code, enacted on February 17, 2018, includes all mandatory, as well as many optional, provisions of the UN Convention Against Corruption (UNCAC), thus facilitating the prosecution and trial of corruption cases. Those acts now criminalized include:
      • bribery, embezzlement, money laundering, obstruction of justice, land grabbing, seizure of assets, false declaration of assets by government officials, discrimination in public administration, forgery of employment and recruitment records to misappropriate salaries of inexistent staff, and money-laundering, as well as other financial-related corrupt practices
    • Under the new Penal code, perpetrators of corruption-related crimes are not eligible for alternative sanctions to imprisonment, and are barred from entering or re-entering the Civil Service. Punishments for anti-corruption offenses are better defined than previously and give less discretion to judges on sentencing.
    – Expand disclosure of asset declarations to cover law enforcement, customs, and tax administration
     PROGRESS: – Achieved.
    • The responsibility for asset declaration registration was handed over to the Administrative Office of the President (AOP). At of July 2018, asset disclosure forms have been submitted and signed by 9,153 government employees, including the 34 senior-most Afghan government officials, with the exception of Vice President Abdul Rashid Dostum. These cover all senior government officials as defined by Article 154 of the Afghan constitution. The asset declarations have been published online in Dari at this link.
    • The new Law on Declaration and Registration of Assets of State Officials and Employees has recently been amended to require that all government officials working in second or higher grades, including members of the Afghan Parliament, Provincial and District Councils, security, judiciary and prosecution departments, must also declare assets. The amendment also included asset verification mechanisms and sanctions for non-compliance. The asset declaration of this level of government employees is still on-going. The Asset Registration Office at AOP is operating swiftly, with over 1,300 officials declaring their assets in the first six weeks that the office was operating, which is twice as many registrations completed by High Office of Oversight and Anti-Corruption in the entire 2017.
    – Expand the use of electronic payments and e-procurement to line ministries
     PROGRESS: – Partially achieved and on-going.
    • Progress has been made in introducing an e-payment system for the public sector salary payment. Since May 2017, Asan Khedmat has been assigned responsibility for implementing the government’s Mobile Salary Payment (MSP) program. All employees (over 4,000) of the the Ministry of Labor, Social Affairs, Martyrs and Disabled (MoLSAMD) now receive their salaries via Mobile Money (MM). The program is being extended to the Ministry of Education and subsequently to other ministries. Currently AsanKhedmat is in negotiations with the Mobile Network Operators to renew the contract for the Ministry of Labor and extend it to 7 provinces.
    • Other e-governance reforms implemented across government include: Automated Systems for Customs Data (ASYCUDA), TARIFF, electronic payments at customs, electronic payments at the Ministry of Finance, connecting the public banking system with SWIFT, and electronic systems for the issuance of work permit for foreign nationals.
    • As of June 2018, 97.71% of police salaries are paid directly to individual bank accounts, 0.14% transferred through mobile money systems, and 2.15% still paid through trusted agents in areas with no bank access.  Read more here on the SPM program.
    – Strengthen the Supreme Audit Office
     PROGRESS: – Partially achieved and on-going.
    • The Supreme Audit Law was revised and strengthened by including an enforcement mechanism added to strengthen the audit law.
    • The Financial Performance Improvement Program has been rolled out to the Supreme Audit Office (SAO), which is a prominent part of the Public Financial Management system.
    • Though funding is pending to proceed with further staff training programs, work continues to build professional capacity within the Supreme Audit Office (SAO), including:
      • Three SAO staff members have completed the online course for anti-corruption. Further trainees have been identified but funding is pending
      • SAO has prepared a proposal for the establishment of an audit academy, pending MoF approval
      • 13 auditors are pursuing BA degrees; 22 auditors have completed MA degrees and 6 auditors are working on MA degrees.
    – Update Afghanistan’s Public Expenditure and Financial Accountability rating, which is an internationally recognized instrument for assessing fiduciary risks
     PROGRESS: – In process.
    • The most recent Country Financial Accountability Assessment was conducted for Afghanistan by the World Bank in 2013. The Ministry of Finance has overseen the implementation of the Finance Performance Improvement Program (FPIP) according to schedule throughout 2017 and 2018. It is estimated that Afghanistan rating will increase after implementation of the FPIP. Achievements in the FPIP roll out included:
      • The Performance Manager Team (PMT), responsible for FPIP implementation, has expanded, adding 36 more team, with total number of PMT teams now reaching 96. This is an overachievement of the target of 80 teams.
      • FPIP has been rolled out to the Supreme Audit Office (SAO), which is a prominent part of the Public Financial Management system.
      • Plans are in place for further roll out in the Ministry of Public Works, Ministry of Interior, Central Statistics Office, Ministry of Agriculture, and one Mustofiate at the subnational level.
      • The country’s first ever fully transparent, consolidated budget (a single currency—Afghanis—including operating and development budgets by functions, economic codes, and programs) was passed by the Parliament in March 2018, completing phase one of budget reforms. Phase two of budget reforms are underway.
      • The Public Expenditure Financial Accountability (PEFA) program has been developed and areas of alignment with FPIP program have been identified.