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

Sovereign Project | 40280-012 Status: Active

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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Procurement Documents

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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 Active
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
Government of Australia 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
Partnerships
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

This TA package has been invaluable to the Ministry of Finance both in providing technical support on key issues of concern to both the Government of Afghanistan and the international community, and also in developing the capacity of Afghan personnel destined for leadership roles in Government.

In this reporting period, consultants helped MoF in establishing a PPP department.

Moreover, the consultants deliver their work in close coordination with the Government employees on the job so their capacity is being continuously built. This includes close coordination with the Government counterparts in the areas covering fiscal reforms, Self-reliance Mutual Accountability (SMAF), IMF benchmarks and economic policy making.

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)

There is a mutual understanding between the ADB/AFRM and the Ministry on the importance of this TA. This TA has been instrumental in furthering reforms, building capacity, and providing vital advice to the leadership of the Ministry.

In 2015, the TA consultants continued provided policy advisory support to the MoF leadership on key issues such as fiscal and economic policy management, regional economic cooperation, planning, and fiscal reform. In addition, the TA consultants provided valuables inputs in preparing for a successful international Senior Official Meeting (SoM) in Kabul in September 2015. This included preparing Government's report on the London self-reliance paper (along with all other relevant documents e.g. annexes and NPPs etc) outlining Government's reform plan for 2015/16 and all key documents presented at the SoM Meeting in Kabul. At SoM, the new government proposed a series of economic reform programs in the SoM Conference (2015) and given the MoFs leading role, continued policy support by the TA to the new leadership is important.

Furthermore, the government utilized consultants' institutional knowledge in negotiating and furthering its SMP program with the IMF. A successful implantation of the macroeconomic stability program with the IMF will help Afghanistan negotiate a medium term Extend Credit Facility (ECF) program with the IFM in 2016.

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, the new TA is programmed to be approved in October 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 Staff

Responsible ADB Officer Marko Davila
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Afghanistan Resident Mission
Executing Agencies
Ministry of Finance
Dr. Mustafa Mastoor
mustafa.mastoor@afghanistangov.org
Pashtonestan 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 23 Sep 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 1,700,000.00 280,000.00 0.00 0.00 0.00 3,005,000.00 04 Sep 2007 2,456,251.31

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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