A new report by the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR) shows that over $72 million USD has been wasted on a component of the USAID’s Afghanistan Trade and Revenue program that was intended to implement an electronic payment (e-payment) system.

The system was aimed at providing a more efficient and effective way to collect customs duties.

The $77.8 million USD four year (2013 to 2016) project was established with the objective of collecting 75 percent of all custom duties electronically by the end of 2016.

However, according to the report, the project collected less than one percent (0.95%) of all custom duties by the end of last year. 

The report says that the findings were sent to USAID – the United States Agency for International Development – on August 17.

It adds that USAID in its comments highlighted the challenges it encountered in implementing the e-payment system including the need for Da Afghanistan Bank and the Afghanistan Customs Department to work together and the willingness of traders to use the system.

The Afghan Ministry of Finance rejects the findings in the report, saying that the e-payment system had been implemented in 95 percent of customs departments over the past two years.

“We have reforms plans every year and we have implemented them annually,” said Najibullah Wardak, deputy head of Finance Ministry’s Customs Department. “We started the e-payment system two years ago with the technical assistance of USAID. We are not aware of money they (SIGAR) are mentioning.”

Meanwhile, Afghanistan Chamber of Commerce and Industries (ACCI) officials said the target given in the plan is high and that it needs more time.

“From the viewpoint of the private sector, the target (set in the project) is very high and its implementation is not possible even in 10 years. One problem is that the international donors set their goals without consulting with the private sector,” said Atiqullah Nasrat, the CEO of the ACCI.

Economic affairs analysts Hasibullah Moahid said many systems are only projects implemented by international and national organizations.

“Basically many systems are established in Afghanistan but all of them are only projects. These projects are implemented without assessment of its challenges and opportunities,” he said.