The U.S. government has signed an agreement that will provide $218 million of health aid directly through the Afghan government during the next five years.
The agreement recognizes that the Afghan Ministry of Public Health and the Afghan Ministry of Finance now have the capacity to fully manage donor funding.
The U.S. Agency for International Development, which is disbursing the aid, says the Afghan Ministry of Public Health has demonstrated "effective oversight of its funding, transparency and accountability in procurement and project management, and has achieved concrete results that have benefited the Afghan people."
In 2009, the first year of the agreement, the United States will provide more than $37 million directly to the Ministry of Public Health. The money is meant to be used to continue providing basic health services in thirteen Afghan provinces.
Audits and annual reviews are to be conducted to ensure that the full funding continues to go directly to priorities set by the Afghan government.
Afghan officials had complained at a donors conference in Paris last month that most aid for Afghanistan is being channeled through foreign firms or foreign nongovernmental organizations -- preventing Afghan institutions from strengthening their own financial capacities.
Most donor countries have expressed concerns about providing aid directly through the Afghan government because of corruption and poor management.
But at the Paris conference, the Afghan government agreed to allow professional audits -- including joint audits with donors -- of programs that are financed by aid sent through Afghanistan's core and external budgets.
In return, donors agreed that their development assistance would be delivered in a more coordinated way. They pledged that aid would increasingly be channeled through Afghanistan's national budget as government institutions become more accountable and acquire greater capacity for management. The donors also said they will try to provide aid in a way that promotes local procurement and capacity-building.
Afghan Finance Minister Anwar-ul Haq Ahady says he has always encouraged donors to channel more funds through the Afghan budget in order to increase aid effectiveness. He says that with the new aid agreement, the United States is making headway on the issue.
"This large grant to our core budget clearly shows that the United States is becoming more confident that our ministries have improved substantially and are able to administer funds efficiently and effectively," Ahady said. "We hope that this will encourage other donors to follow a similar path."