B UDGET U PDATE Budget Department, Ministry of Finance

Outline 1387 Budget Execution Achievements and Challenges 1388 Budget Brief and Plan Foreseen Challenges/Recommendation Budget Calendar (Draft)

1387 Core Budget Execution

1386 vs 1387 Core Development Budget Expenditure $ Million which was committed by donors is not paid yet

Execution: Discretionary Vs Non Discretionary $ Million (USD 200 million Discretionary and USD 166 million Non discretionary which was committed by donors is not paid yet

Development Budget Expenditures by Ministry

Achievements in 1387 ANDS integration into MoF Structure Prepared of ToR and establishment of 14 out of 17 Inter Ministerial Committees for Implementation of ANDS Strengthening the alignment of the Budget with ANDS Restructured the budget department in line with P&G requirements State Budget Planning System (SBPS) installed and will start operation

Achievements in 1387 (Cont’d) New mechanism to monitor expenditure “Planning and Monitoring” Two successful and comprehensive donor financial reviews Program Budgeting expanded to 20 Ministries Workshops by the provincial budget team for more than 500 personnel of the line ministries in the Center and provincial departments

Challenges in 1387 Low capacity in the line ministries in the areas of program budgeting project preparations, ANDS costing, taxation issues, and financial control. The line ministries understand their wish list Unavailability of sufficient discretionary resources to meet the demand Little interest of donors in infrastructure projects and delays in fund disbursement from donors Under-disbursement vis-à-vis commitment (i.e USD 166 million in Non discretionary and USD 200 million in Discretionary funds)

1388 Budget high lights Projected Domestic Revenue is 26% higher than 1387 Operating Budget is 22% higher than 1387 Domestic Revenue is covering only 54% of operating Budget in 1388 vs. 65% in % of operating Budget is allocated for Security Sector 18% is allocated to Education

1388 Budget high lights ANA increases from 86,000 To 109,314 86,000 Civil Servants will come under P&G including teachers. 125,00 New Teachers for Ministry of Education Increase in Staff of Revenue Department,.

1388 Budget Core Development of USD 2,092 million includes USD 1,135.7 million New Financing and USD 956 million Carry Forward from FY 1387.

1388 Budget by Sector

Plans for 1388 A comprehensive ANDS Implementation Plan Diverting the attention of donors to under-funded sectors (i.e. Education and Infrastructure and Agriculture) and preparation of code of conduct between GoA and donors Using IMCs and the new aid effectiveness working groups to coordinate and align donor programs and projects to ANDS Online Donor Assistance Database (DAD) and increasing the flow of information between line ministries donors and MoF Strengthening financial control, fiduciary standards and fiscal transparency

Plans for 1388 (Cont’d) Institutionalizing of MoF and ANDS publications Grants/Loans Review Mechanism Strengthening and supporting the anti-corruption measures already in place by making them functional Improve cash management

Foreseen Challenges for 1388 Uncertainty about future projections of donor grants  Leads to difficulty in setting line ministries' ceilings early on in the budget cycle by line ministries Decrease in ARTF Recurrent Cost Window and increase in Recurrent costs (specially Operation & Maintenance) Limited knowledge of off-budget recurrent cost particularly in the security sector

Foreseen Challenges for 1388 (Cont’d) Donors not being able to fulfill the existing commitments in lay of the current financial crisis Finding/retaining qualified people to replace the MBAW project staff Less budget support to Development Budget

Estimated ANDS External Financing Gaps

Recommendations Enhanced coordination between the GoA and the donors in a timely manner  In particular donors should quantify their support for 1389 early on in the budget cycle Timely disbursement of donor support by the donors (will help us for better cash management) More focus on ANDS implementation and its monitoring and evaluation

Thank You