Redesign of Kabul Municipality’s Financial Management

Kabul Municipality has been suffering from lower own source revenue. Annual revenue of KM was approximately US$50.5 million (2011/2012); once recurrent expenditures of roughly 63 percent are accounted for, only US$19 million remains for the city’s development budget, translating into a per capita equivalent of about US$4.87, extremely low by international standards and also lower than other large cities in Afghanistan. Progress towards greater financial self-reliance will require KM to overcome multiple and interrelated constraints for improving revenue management functions, financial planning, and investment management.

This project had the following objectives to accomplish:

• Undertaking a comprehensive diagnostic of KM’s current financial situation and of KM’s systems and capacities for Revenue Management and Financial Management, to identify what is needed to strengthen municipal financial autonomy, improve direct and indirect cost recovery, and contribute to more balanced budgeting; and

• developing a time-bound realistic action plan for implementation of feasible recommendations (immediate, over 2 years, and over 4 years) delivered in the form of a report, as well as one of more bidding documents for implementation of the recommendations.