Afghanistan: Support for Economic Policy Management (formerly Capacity Building for Ministry of Finance)

Sovereign Project | 40280-012

Summary

The TA will strengthen the Government's capacity in economic and fiscal policy management. The main objectives of the TA are to provide advisory services to the Minister of

Finance and deputy ministers on key economic and fiscal policy issues as well as to support capacity building for national counterparts (advisors) to facilitate their taking over the advisory roles upon completion of the TA.

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Consulting Notices

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Project Name Support for Economic Policy Management (formerly Capacity Building for Ministry of Finance)
Project Number 40280-012
Country Afghanistan
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 4964-AFG: Support for Economic Policy Management (formerly Capacity Building for Ministry of Finance)
Technical Assistance Special Fund US$ 800,000.00
Denmark - DANIDA (w/ LoA) US$ 900,000.00
TA 4964-AFG: Support for Economic Policy Management (Supplementary)
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Public sector management - Economic affairs management

Gender Equity and Mainstreaming
Description

The TA will strengthen the Government's capacity in economic and fiscal policy management. The main objectives of the TA are to provide advisory services to the Minister of

Finance and deputy ministers on key economic and fiscal policy issues as well as to support capacity building for national counterparts (advisors) to facilitate their taking over the advisory roles upon completion of the TA.

Project Rationale and Linkage to Country/Regional Strategy

The Ministry of Finance (MOF) plays the key role in fiscal management, economic development planning, resource mobilization and allocation, and coordination and harmonization of donor assistance in the Islamic Republic of Afghanistan. The Asian Development Bank (ADB) has supported capacity development activities within MOF through cluster technical assistance (TA) 3874 (Capacity Building for Reconstruction and Development), TA 4502 (Capacity Building of the Ministry of Finance), TA 4637 (Capacity Building for Economic Management), and loan 2215 (the Fiscal Management and Public Administration Reform [FMPAR] program). ADB's involvement and investments in advisory and capacity development efforts have yielded valuable lessons and have contributed to a number of significant achievements.

The TA was included in ADB's Country Strategy and Program Update 2006 2008 pipeline of projects. The TA's scope, implementation arrangements, costs, and terms of reference were identified in consultation with relevant officials and advisors of MOF and the development partners during meetings held from December 2006 to May 2007. The TA builds on the achievements made under ADB's assistance to MOF, follows up on the recommendations of the various TA progress reports, and mutually supports other TA and capacity development in MOF. The TA supports MOF's strategic priorities, which emphasize the importance of continued capacity development and a strategic focus on service delivery and achieving results.

Impact Improved macroeconomic management performance.
Project Outcome
Description of Outcome Ministry of Finance (MOF) has the capacity to effectively manage and provide advice on economic and fiscal policy issues.
Progress Toward Outcome The Minister of Finance continues to play a key role as primary interlocutor with the IMF and other development partners for overall economic and fiscal policy management. Overall achievements for the IMF benchmarks on economic policy and fiscal management are envisaged to contribute to the GoA's efforts against the Kabul Bank crisis. The TA consultants' team will continue to provide requisite technical advisory through day-to-day work in the MOF.
Implementation Progress
Description of Project Outputs

1. Provision of advisory services and strengthened national capacity for fiscal and economic policy management

2. Strengthened planning and program prioritization, development planning, and aid coordination capacity

3. Provision of advisory services and strengthened capacity in legal, regulatory, and enforcement areas

4. Strengthened capacity in macro-fiscal skills and preparation of medium-term forecasting

5. Provision of technical advisory support and strengthened capacity in human resource management and MOF budget planning

Status of Implementation Progress (Outputs, Activities, and Issues) In 2014, the TA provided policy advisory support to the MOF on key issues such as fiscal and economic policy management, regional economic cooperation, planning, and aid effectiveness. In addition, the TA consultants provided input to prepare for the 2014 London Conference on Afghanistan, and to help address the government s fiscal gap and support IMF negotiations. The new government proposed a series of reform programs in London and given the MOFs central role, continued policy support to the new leadership is important. During the exertion period, the consultants will continue to provide advisory services and technical support to the Minister of Finance. Furthermore, the government requires the consultants' institutional knowledge to negotiate a new macroeconomic stability program with the IMF and other development partners. This final extension is requested by the government to bridge the gap between the current TA and new TA for Public Management Support in 2015.
Geographical Location Afghanistan/Kabul
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The scope of the TA was designed in consultation with relevant officials and advisors of MOF and development partners during meetings held from December 2006 to Feb 2007.
During Project Implementation

ADB signed a consultancy agreement with Adam Smith International on 25 May 2011 for the fielding of Mr. Dallas Newby as Sr. Strategic Policy Advisor and Mr. Phillip James Walker as International Legal Adviser. They intend to provide policy advice to the Minister, establish strong system for policy implementation and build resident Afghan's capacity.

ADB recruited two domestic advisors, Legal Advisor and Economic Policy Advisor in October and December 2011 respectively, they will work closely with the International Advisors and takeover responsibility after completion of their assignments.

In 2012, six national advisors (two advisors to the office of the Minister, two advisors to the office of Deputy Minister for Administration, and two Advisors to the office of Deputy Minister of Finance) and two international advisors (one Advisor to Deputy Minister for Administration and two Advisor to Deputy Minister for Finance) were recruited.

In 2013, one National Advisor to the office of the Minister was recruited, and contracts of two National Advisors to Deputy Ministers for Finance and Administration were extended.

In Dec 2014, a final extension was requested by the government to bridge the gap between the current TA and new TA for Public Management Support in 2015.

Business Opportunities
Consulting Services

74 person-months of international consultancy - Economic Advsior (18 PMs), Legal Advisor (10 PMs), Fiscal Advisor (18 PMs), advisor to Deputy Minister of Administration (18 PMs), and Financial Management Expert (10 PMs).

24 person-months of domestic consultancy

Responsible ADB Officer Marko Davila
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Afghanistan Resident Mission
Executing Agencies
Ministry of FinanceDr. Mustafa Mastoormustafa.mastoor@afghanistangov.orgPashtonestan Watt, Kabul, Afghanistan
Timetable
Concept Clearance 07 Mar 2007
Fact Finding 02 Dec 2006 to 15 Feb 2007
MRM -
Approval 04 Sep 2007
Last Review Mission -
PDS Creation Date 02 Dec 2009
Last PDS Update 16 Mar 2015

TA 4964-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
04 Sep 2007 10 Oct 2007 10 Oct 2007 31 Jul 2010 15 Nov 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,025,000.00 900,000.00 280,000.00 0.00 0.00 0.00 2,205,000.00 04 Sep 2007 2,174,376.47

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