The Afghan government accused western aid agencies of hindering the growth of local firms and squandering billions of pounds earmarked for reconstruction efforts in the country.
President Hamid Karzai opened a donor conference in Kabul by saying that his government was the ultimate body accountable to the Afghan people".
He also stressed that he was responsible for stopping “NGOs that are corrupt, wasteful and unaccountable.”
“The Afghan government... must be better informed about, and play its due role in, steering the development process.
"The government must become the anchor for a more integrated, transparent and accountable development effort." Karzai said.
The three-day conference, attended by representatives of 40 donor countries, opened one day after the Afghan government announced its spending budget for the coming year.
About 93% of the $4.75bn budget comes from foreign donations, and one-third of the sum is to be spent on security.
The rest is to be spent on building the private sector, irrigation and eliminating opium poppy cultivation.
Last year, western countries promised to donate $8.3bn over three years for Afghanistan. The U.S. Congress is expected to approve another $2-3bn.
Afghan Finance Minister Anwar-ul-Haq Ahady said that the government would address international concerns over the transparency of spending, but added: "I urge all of you to channel most of your resources through our budget."
Last Monday, the Afghan government presented a draft law that would effectively ban some aid agencies from funding large projects such as digging wells, building schools and fostering civil society.
According to Karzai, the law reflects "serious concern" that some NGOs are responsible for widespread corruption and misuse of public funds.
There are concerns that western donations are spent on expensive vehicles, inflated salaries and excessive overheads. "This is why the Afghan people are discontented," Karzai said.
Karzai has assigned a committee to study the new law. It is due to submit its findings within a month.
Many of the 2,400 registered NGOs in Afghanistan are profit-making ventures that exploit their status to win large government deals.
However, large aid organizations deny the accusations. The Agency Coordinating Body for Afghan Relief (Acbar) said; "No NGO is here to make money."
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