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Investing in the Consolidation of Public Procurement

Public procurement forms 19% of GDP and 50% of the national budget, which gives it key importance in the current circumstances of Afghanistan. The new government of Afghanistan has brought extensive reforms in the procurement process to meet international standard to decrease corruption and create economic opportunities for private investment.

In strengthening investments and small and medium enterprises, the public procurement systems have created the following opportunities for strengthening private and public private investments. The National Procurement Authority (NPA) up until now has received 3,717 procurement projects out of which 1,485 are related to goods, 1,345 are related to constructions, 103 are related to consultancy services, and 784 are related to non-consultancy services.  

The value amount of these projects is as follows:

NO Project Type Value (AFS) % in Total Procurement Projects
1 Goods 87,102,383,765 33%
2 Construction 89,138,428,833 33%
3 Consultancy Services 80,559,917,747 30%
4 Non-Consultancy Services 9,801,233,018 04%

1 USD = 68.40 Afs as of 10 April 2016

Source: National Procurment Authority

 
The NPA has developed an electronic procurement system, for the registration of private companies to make the procurement process timely and informational on every project to all companies. Based on the information received from NPA, the estimated annual procurement value is close to USD 2 billion.

The NPA has policy to give preference to domestic firms as following:

NOProject typeValue (AFN)
1Preference given to domestic manufacturing over foreign manufacturing15%
2Preference given to domestic companies over foreign companies(resident/non-resident)10%
3Preference given to foreign company residents over foreign company non-residents5%
4Preference given to joint ventures5%

Source: National Procurement Authority

 

Sector Wise – Procurement Projects:

The Afghan government’s new strategy is to consolidate the procurement of the public goods. Annually the government purchases billions of dollars worth of goods such as food supplies, pre-fabrication construction materials, and for public institutions and the military. The strategy is to outsource procurement to big companies with the obligation to manufacture the goods in Afghanistan.  

The sector wise projects distribution is as follows:

NOSectorNO. of Projects% of Total Projects Projects
1Security1927552%
2Economic Governance & Private Sector Development9402%
3Good Governance, Rule of Law, & Human Rights17805%
4Agriculture & Natural Resources43912%
5Health21206%
6Social Protection7402%
7Education & Culture45912%
8Non-Sectorial8002%

Source: National Procurement Authority