Islamic Republic of Afghanistan - Enhanced Integrated Framework ...

Consistent with the growth strategy of theGovernment, the prioritization framework ofbudgetary allocations is expected to allocatesignificant resources to productive sectors suchas infrastructure, health, education, agricultureand rural development, and rule of law andgovernance. Cumulative total public expendituresduring 1387-91 in roads, energy, waterand irrigation, airports, and communicationstechnologies alone are expected to reach about$11 billion (or about one-third of the total expenditures).34 Similarly, health and educationsectors are expected to receive about 17 to 18percent of the total resources – considerablyhigher than current allocations. Other priorityareas include agriculture, rural development,rule of law and governance, where the Governmentwill invest significant resources.34 Figures in the macroeconomic framework (see tables) arebased on projected execution rates of the core developmentbudget. As a result, the original total budgeted figures for the coredevelopment budget can be higher than those in the macroeconomicframework of the ANDS.Figure 4.7. Domestic revenues and operating expenditures as a percent of GDPThe Government is taking measures to improvethe overall absorption capacity and executionof projects in these sectors through more effectivepublic finance management and efficientproject management methods. Key public financemanagement reforms include introductionof the medium term budget framework(MTBF), program and provincial budgeting.Other Government reforms are targeting projectpreparation and management, as well asprocurement procedures. The overall developmentbudget execution rate has been steadilyincreasing – the core development expenditurerate for 1385 increased to 54 percent from 31percent in 1383. The public finance managementreforms and prioritization process areexpected to improve the overall fiscal situationand improve the quality of public expenditures.Significantly higher execution rates andimproved quality of public expenditures in keysectors over the medium term in turn will improvethe growth and development process inthe country.Government expenditure policy will focus oncreating an enabling environment for the privatesector; enhancing production capacity andproductivity; and improving the quality of lifeof the population. The Government’s budgetallocation prioritization is expected to improvephysical infrastructure, enhance human capitaland build institutions necessary for private sectorled growth and increased employment opportunities.Macroeconomic Framework 47