Afghanistan: Analysts ‘alarmed’ by development budget cut

The Yakawlang-Dara-e-Suf road in Bamiyan. Sept. 2022.

Taliban’s ministry of finance last week sent the next solar year’s annual budget to the leader of the group, Hibatullah Akhundzada, for approval after it was reviewed by its cabinet.

The details of the budget have not been made public so far but analysts said there is a “significant reduction” in the allocation for the development budget which they say is alarming.

Analysts also said that the process through which the budget is approved is “concerning” for them.

Under the previous government, the budget was passed by parliament and was sent for final approval by the president. But the process has now changed.

Under the Taliban administration, the draft budget is prepared by the finance ministry and is sent to the group’s cabinet and once approved, it gets sent to Hibatullah for his approval. There is no authority in place to monitor how the funds are spent.

After seizing control of the country in August 2021, money allocated for the development budget has dropped off significantly.

Afghanistan’s development budget in the 1400 solar calendar (from 21 March 2021 to 20 March 2022) totalled over 156 billion afghanis which was largely funded by international aid. This year’s budget (from 21 March 2022 to 20 March 2023) was reduced to nearly 30 billion afghanis.

“The budget is limited to internal sources,” one analyst Azarakhsh Hafezi said. “Lack of funds for the development budget will hamper development and will increase poverty in the country.”

Another analyst and a former professor at Kabul University, Sayed Massoud, said the former government’s projects under the development budget were funded mostly by international donors, but right now, the Taliban has no means to fund this budget and is dependent on internal resources.

Budget deficit

Taliban authorities said in May 2022 that Afghanistan faces a budget deficit of 44 billion Afghanis ($501 million) in fiscal year 2022, but they did not clarify how the gap between expected revenues and planned spending would be met.

According to the Taliban’s Deputy Prime Minister Abdul Salam Hanafi, they foresaw spending of 231.4 billion Afghanis and domestic revenue of 186.7 billion in 2022.

Taliban’s annual budget for 2022 (March 21, 2022 to March 20, 2023) was approved by the group’s council of ministries and confirmed by the Taliban’s supreme leader Hibatullah Akhunzada. But details were not provided on the expenditures.

Development work would take up 27.9 billion Afghanis, Hanafi said in May 2022, but did not provide a breakdown of spending on areas such as defense.