watchdog-budget

Watchdog criticizes reduced budget for education, health

KABUL (TOLO News): The Kabul-based monitoring organization, Integrity Watch Afghanistan, in a new report on the national budget, has found that the required budget has not been allocated for two key sectors — education and health.

The report shows an overall increase in revenue and budget execution, but also highlights that the immediate needs of the people, including the many returnees and internally displaced people, have not been reflected in the proposed budget.

The report claims that the allocated budgets for the important sectors of health and education have decreased compared to the previous year’s despite the government’s promise to increase construction of schools.

Nonetheless, the government has outperformed the previous government in terms of budget execution and revenue collection: figures show a 9% increase in revenue and a 24% increase in budget execution.

“Despite increase in revenue and budget execution, the dire needs of the people have not been prioritized in the budget,” said the head of IWA, Naser Timory. “Education and health sectors have particular problems, but the necessary budget has not been allocated for their operation and maintenence.”

In 2018, the government promised to build 6000 schools in two years, but now the government says that it will only be able to build 800 schools by the spring of 2020.

The report also highlights the fact that the Afghan government has allocated only $1.20 for each returnee and internally displaced person, a very small amount of money compared to the number of returnees, Timory added.

In 2019, 1.2 million people either returned to Afghanistan or were displaced, the report says.

The total proposed national budget for 2020 is $5.76 billion, the report says, which notes that this figure constitutes 26% of the country’s estimated GDP of $22.3 billion.

The operating and development budgets for the fiscal year 2020 are estimated at $3.9 billion and $1.9 billion, respectively.

The total estimated figure available for proposed expenditure is $5.6 billion, of which $2.8 billion (approx. 50%) is planned to come from domestic sources, and the remaining $2.78 billion from external sources including concessional borrowing, the report shows.

The proposed budget for the fiscal year 2020 shows an overall increase of 7.2% over the approved budget (at the start of the financial year) for the fiscal year 2019. However, it is only approximately 1% more than the actual budget for the fiscal year 2019 (end of the financial year).

Government spending for most sectors show increases, except for health and education which have seen reductions of 16.1% and 4.9%, respectively. In terms of the share of sectors in the total budget, defense, public order and safety, and general public services have been allocated the highest budgetary amounts.

The report also contends that like the previous administration, the government has failed to keep the contingency code below the 3% defined threshold.

It has allocated 202 billion Afghanis while it should not have exceeded 54 billion Afghanis.

Under President Karzai, the average budget allocated to the same code was 156 billion Afghanis, 119 more than the defined threshold. Contingency Codes are not as transparent as other codes and thus are more prone to corruption. Additionally, research shows that the Afghan budget deviates by as much as 60% after approval by the parliament.

The monitoring organization makes some suggestions in this report.

Increase Public Participation

Public participation has to be significantly improved to reflect people’s views, needs and demands, the watchdog suggests, adding that this will also decrease the role of political actors, improve effectiveness and will help better implementation of projects through people’s buy-in and ownership.

Invest in People

Although the UN and donor agencies support returnees and IDPs, the Afghan government has to show that it cares for its people who are displaced due to conflict or have returned to Afghanistan due to pressure abroad.

Also, two other areas of investing in people are education and health which need urgent attention, in particular the operation and maintenance of schools and health facilities.

Making the Budget Accountable

The amount given to contingency codes is much higher than what it should be. More recently, even development projects were listed in the contingency codes. This has to be changed immediately. Furthermore, relying on the Special Operations Unit and thereby marginalizing line Ministries may have short term results but it undermines state-building, accountability, transparency, public confidence and reform of institutions.

Minimize Budget Deviation

Research shows that the Afghan budget deviates by as much as 60% after approval from parliament. The deviation should be substantially by decreasing the contingency codes, among others.

If there were a substantial decrease, the national budget would become a much more credible document.

Enhance Transparency and Oversight

While oversight by the Supreme Audit Office increased to 67 out of 100 based on the 2017 Open Budget Survey, oversight by parliament remains low with 19 out of 100 in the formulation phase and 47 out of 100 in the execution phase of the budget process.

To combat corruption, the government should provide enough resources to the judiciary and to the oversight, regulatory and anti-corruption agencies. Also access to reliable, timely and comprehensive budget documents remains a continuing issue for civil society and media.

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