The current debate on aid effectiveness makes one think that donors are prioritizing the quality of spending. However, a recent report by ACBAR (Agency Coordinating Body for Afghan Relief) lists many examples of where billions of dollars promised for the reconstruction of Afghanistan has been wasted, ineffective or not transferred at all. Aid constitutes around 90% of all public expenditure in Afghanistan, making aid effectiveness a crucial issue for the development of the country.
Of the aproximately $25.41 billion of aid that has been committed up to 2008; only 40% been disbursed to date. The ACBAR report also gives many examples of the inefficiencies of donor spending: one example being the reconstruction of a maternity hospital in Kabul. In this project the Italian government contracted the UN Population Fund who then sub-contracted to the UN Office for Project Services, who then sub-contracted to an Italian organization who in turn sub-contracted an Afghan construction company.
The Kabul Press reported that less than half of the total budget allocated for this project was spent on the actual reconstruction and that the end product was so poor it needed further reconstruction. In 2006 the then director of the World Bank in Kabul estimated that 40% of aid was ‘badly spent’.
Much of the aid that has been spent has also been driven by donor priorities instead of being responsive to the needs of Afghanistan. For example, most aid is centralized in Kabul or other urban areas of strategic interest to donors. As a result many of the rural areas have experienced minimal social and economic benefit.
Download the ACBAR report here.