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Press Release
4 June 2006
"More Aid should go direct to Afghan Government" says Benn, as UK announces increased support
The UK today urged the international community to provide more funding direct to the Government of Afghanistan, rather than by passing government channels.
Speaking on a visit to Kabul, International Development Secretary Hilary Benn extended the UK’s commitment to the Afghan Government’s budget by a further £60m ($111m) – and encouraged other donors to do the same.
A World Bank report published in January warned that last year, 75% of the $3.1 billion dollars of international aid spent in Afghanistan was being spent outside of Government channels. The UK is the largest donor to the Government’s recurrent budget.
Hilary Benn said:
"The only way to help Afghanistan successfully rebuild the country is to support the elected representatives of the Afghan people. That’s why over 70% of our aid this year is going directly to the Government of Afghanistan, helping to pay for education, health care, and reconstruction."
"I would urge other donors to give more funding directly to the Government of Afghanistan. This ensures that the money is spent according to Afghan priorities, in a way that is accountable to the Afghan electorate, and helps build the Government’s capacity."
"I’m also delighted to be working with the United Nations to help the Government further develop its poverty reduction plan – following up on the commitments the international community made at the London conference."
The announcement of the £60m further funding comes a day after the Afghan parliament approved the government’s budget for 2006/07. The new money is for 2008/09, as part of a rolling three year commitment to improve the predictability of donor funding given to the Government. It is in addition to money the UK provides to the Government’s budget for specific projects. Over 70% of DFID’s £102m ($189m) budget will go to the government in 2006/07.
Funding provided direct to the Government’s budget pays for:
- salaries for civil servants such as teachers, doctors, nurses and agricultural support advisers;
- the basic operating costs of Government, including supplies for schools and hospitals;
- maintenance costs for Government facilities, roads and infrastructure;
- emergency humanitarian support.
Hilary Benn also announced DFID funding through the United Nations to help
the Government further develop its
National
Development Strategy, launched by President Karzai at the
London
Conference on Afghanistan in January.
The Afghan Government plans to develop the interim strategy over the next two years into a detailed plan to address the country’s development, security and governance challenges. This will involve nationwide consultations on people’s priorities, costings of the plan’s targets, and better collection of data. DFID funding will help pay for technical expertise to develop the plan, the costs of consultations in Kabul and all 34 provinces, and also some of the costs of the Joint Coordination and Monitoring Board set up at the London Conference to monitor progress against the Afghanistan Compact.
Notes to Editors
1. The Afghanistan Reconstruction Trust Fund is administered by the World Bank, and channels funding from 25 donors into the Government’s budget. Funding can be provided either unearmarked (most of which goes to cover the Government’s running costs), or with a preference for individual investment projects.
2. The announcement of new money is £60m ($111m ) for unearmarked funding for 2008/9. Under the terms of the 10 year Development Partnership Arrangement signed by Afghan President Hamid Karzai and UK Prime Minister Tony Blair in London in January, the UK is committed to providing three year rolling funding to the Government’s budget. This new commitment updates the £150m ($278m) package for 2005-8 announced in July 2005, to a £165m ($305m) package for 2006-9 (funding was £45m ($83m) in 2005/6 and will be £50m ($93m) in 2006/7 and £55m ($102m) in 2007/8).
3. The UK is the biggest donor to the ARTF, having committed £355m ($657m) from 2002-2009, of which £300m ($555m) is unallocated and £55m ($102m) for individual projects. £210m ($389m) has already been disbursed. The UK provided 31% of all ARTF funding in 2005/6.
4. The UK also provides funding to the Government budget for specific projects, both through the ARTF (microfinance, community development and rural infrastructure), and through the Counter-Narcotics Trust Fund (which funds a range of alternative livelihoods, drug demand reduction and law enforcement projects), and the Law and Order Trust Fund for Afghanistan (which pays police salaries). 75% (£76.5m or $142m) of DFID’s funding for Afghanistan is going to the Government in 2006/7.
5. The ARTF provides support directly to Government expenditure, but only reimburses the Government for eligible expenditures, thus providing safeguards against corruption and incentives to improve financial management.
6. DFID is providing £0.7m ($1.3m) through the United Nations Development Programme to fund the first three months (June-August) of assistance to help.
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