The findings presented in this report offer the first assessment of commitments made in the 2006 Afghanistan Compact by the international community and the Afghan Government related to increasing local procurement as a means to enhance the effectiveness of international aid.  In addition to preliminary estimates of the local impact of official development assistance spending during the Afghan fiscal year 1384 (2005), recommendations are also offered that target the current capacity to monitor and meet these commitments and ways in which stakeholders can work to increase local procurement in Afghanistan.

The overall results of the study showed that of the $1.36b spent in 1384 (2005) by the major donors from whom data was obtained, the local economic impact was $424m or 31.2%. 
 
There were three major conclusions:

1. The high level commitment made to increase the local impact of development spending has yet to translate into a focus on the ground in either assessing this impact or instituting practical ways to enhance its impact on the Afghan economy.  


2. Within the different ways that donors spend their funds, by far the greatest local economic impact is obtained when resources are provided directly to the government (local impact around 85%) compared to funds provided to international companies or NGOs (less than 20%) to carry out projects. 


3. When funds are provided outside trust fund channels for the purchase of goods and services there are still a number of approaches that can be explored to ensure that the local economic impact is heightened.   

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