Afghanistan's Western-backed President Hamid Karzai admitted Thursday that his government was corrupt and issued a sweeping directive for reform ahead of the withdrawal of international troops in 2014.

Karzai's move came just weeks after donor nations pledged $16 billion for Afghanistan to prevent the country from sliding back into turmoil when foreign combat forces depart but called on Kabul to implement reforms to fight graft.

"Despite major achievements... we have confronted problems in governance, the fight against corruption, strengthening the rule of law and economic self-sufficiency," Karzai said in a statement.

The president -- who has faced accusations he is part of the problem rather than its solution -- called on the Supreme Court to "work on and finalise all the cases regarding administrative corruption, land-grabbing... within six months".

"The high-ranking officials of the government should distance themselves from supporting the criminals, law-breakers (and) corrupt officials... regardless of the government post or authority of such persons," he said.

More than 10 years after a US-led invasion led to billions of dollars in aid flowing into one of the world's poorest countries, Afghanistan ranks among the most corrupt nations in the world.

NATO has some 130,000 troops in the country fighting an insurgency by Taliban Islamists, but they are due to withdraw by the end of 2014 and there are widespread fears that civil war could follow their departure.

In an attempt to prevent that, the 50 NATO-led countries involved in the war pledged $4.1 billion dollars in annual security aid at a summit in Chicago in May, while in Tokyo earlier this month donor nations said they would provide $16 billion in civilian aid through 2015 -- with several pre-conditions, including a clampdown on corruption.

In his statement, Karzai called on the finance ministry to "prepare and implement within two months the plan for the follow-up of commitments made in the Tokyo conference".

Karzai's move comes amid local media reports that he is planning to shuffle his cabinet -- a highly sensitive issue in a country riven by ethnic and ideological divides.

Endemic corruption has been fuelled by the cash that has poured into the country in the decade since the US-led invasion toppled the Taliban regime for harbouring Al-Qaeda leader Osama bin Laden after the 9/11 attacks.

And while the Afghan government admits corruption is rife within its ranks, it has also in the past pointed a finger at the contract systems of the international community.

"All government institutions are emphatically instructed to seriously avoid signing construction, logistic (and) services contracts with high-ranking officials and the people they support," Karzai said.

"Such an action will be regarded as a crime and the perpetrators will be prosecuted," he said.

But as NATO combat troops prepare to leave Afghanistan, desperately needed cash is already making its own way out -- $4.6 billion left through Kabul airport in 2011, almost double the amount in the previous year, the finance ministry says.

The scandal-plagued Kabul Bank, the country's largest private lender, almost collapsed in 2010, with owners including one of Karzai's brothers accused of pocketing $900 million in illegal loans.