Afghanistan is attempting to stabilize, restore peace and rebuild the destructions of more than 22 years of conflict and political unrest. As a post conflict situation, the country is currently profoundly dependent on Official Development Assistance (ODA). Aid accounts for partial support to the recurrent expenditure while development budget is fully covered by foreign assistance. This study assesses the role of the government and donors in utilizing aid resources. Overall aid utilization has been biased to selected sectors and finally reflected with regional disparity. People's development is given low priority and development itself is fragmented. Aid coordination between government and donors is a major challenge, quick fixed, short term and project based interventions are the most practicing approaches, and there is less time, scope and opportunity for the local community to participate. The gaps between core and external budget are still high, and the agreement on channeling most of the ODA through the national budget of the government is yet to happen.