About Macro-Fiscal Performance General Directorate (MFPD)

Macro-Fiscal Performance Directorate General is a department in the Ministry of Finance, which reports to the Minister. The department is mandated to provide policy advice to the budget throughout the budget process. Furthermore, the secretariat of the High Economic Council (HEC), the Performance Management Team (PMT), which implements the PFM reforms and the secretariat of the Bilateral Economic Commissions (BEC) are imbedded within MFPD. The sub departments are briefly introduced bellow:

Macro-Fiscal Policy Directorate

The Macro-Fiscal Policy Directorate’s mandate is to provide analyses and estimates of fiscal and macroeconomic situation of the country which feeds into the budgeting process every year. It produces the macro forecast for the budget year and outer years and maintains an internal Afghan Government model to produce these forecasts.  It monitors and updates these forecasts throughout the year. It also produces fiscal forecasts, consistent with the macro framework, which feed into the budget.  These forecasts provide the basis of the top-down portion of the budget and set the envelope for available resources. To do the estimates and forecasting the MFPD has developed the internal model for macro-fiscal forecasting, and is consistently working to improve it. The department also undertakes expenditure analysis and planning as part of our budgetary forecasting work. Estimating the total resource needs for commitments over the medium term. This directorate also provides a policy advice role, making recommendations on tax and fiscal policy to meet overall objectives.  The analysis at the Macro-Fiscal Policy Directorate includes the following:

  • Risk Analysis: The department monitors and analyzes likely risks to the economy and fiscal situation, to estimate the likelihood of them and the impact they will have. These risks are reported quarterly in the outturns, and a quarterly risk report has just started being prepared (contain exchange risk, fiscal risk, and macro risk).
  • Fiscal Sustainability Analysis: The department monitors several indicators for fiscal sustainability to ensure that the country is making improvements, including providing long run analysis of performance of the pension scheme and long run fiscal forecasting.
  • Policy Analysis: The department conducts policy simulations judging the impact of new policy plans through both modelling (CGE and Input-Output modelling) and through econometric techniques and other methods. MFPD has built a number of internal models used for forecasting and simulations, to support this role providing analysis on policy decisions. The directorate has models prepared for analysis of: fiscal sustainability, macroeconomic and fiscal policy changes, the mining sector, pensions, and multiple other areas.
  • Policy Recommendations: The Macro-Fiscal Policy Directorate, alongside providing analysis of policy choices, can outline and provide recommendations on tax, expenditure, debt and fiscal policy options (as part of this effort, we have been developing an internal model to simulate the impact of different fiscal rules). This directorate also provides advice on macro-economic policy recommendations, based on the research work we undertake.
  • Fiscal Data Analysis: The department provide analysis of fiscal data, determining the underlying reasons for under/over performance in fiscal indicators, and helping work out the likely future impact of conditions on fiscal performance.

Secretariat of High Economic Council (HEC)

The Secretariat of the High Economic Council (HEC) is a sub-directorate under the Coordination Unit of the MFPD, which receives proposals from the private sector and the government agencies. In coordination and consultation with the relevant agencies the HEC Secretariat evaluates and pre-screens the proposals to be submitted to HEC. It also sets the agenda for HEC meetings and undertakes outreach functions for the HEC.

Bilateral Economic Commission (BEC)

The Secretariat of Joint Economic Commissions is a Directorate under General Directorate of Macro-Fiscal Performance (MFPD). It is led by the director of JECD who reports directly to the Minister and Director General of MFPD. JECD’s mandate is to convene commissions’ sessions and to provide analyses of the current states of bilateral economic relations, and to identify potential areas of cooperation between Afghanistan and neighboring countries and countries in the region and beyond. Afghanistan has opened a new chapter of bilateral relations under the frame work of the Joint Economic Commissions. Bilateral cooperation covers Trade, Investments, Cultural and historical ties, Education, Health, Infrastructural projects and broader Economic issue of mutual interest. JECD has established Joint Economic Commissions with People’s Republic of China, Islamic Republic of Pakistan, Islamic Republic of Iran, Republic of Turkmenistan, Republic of Kazakhstan, Republic of Azerbaijan, Russian Federation and United Arab Emirates.

Performance Management Team (PMT)

The Performance Management Team (PMT) was established in the Macro-Fiscal Performance Directorate General (MFPD) to facilitate the development and implementation of the Government’s flagship fiscal reform program – the Fiscal Performance Improvement Plan (FPIP). The PMT Formally called the PM&PER works with all teams across the MOF and partner agencies to develop sequenced five year rolling plans linked to international benchmarks. The PMT facilitates assessments and independent validations of progress and outcomes based on the FPIP. Performance reports are developed and disseminated to all the stakeholders.