Afghanistan Economic Outlook

January 2024

Afghanistan Economic Outlook, is a creative initiative of the Afghanistan Economic and Legal Studies Organization (AELSO) which reflects most important & the latest economic events that happened during a month in Afghanistan.

By reading this economic newsletter, that has designed in three languages (Pashto, Dari & English), you can get a wider overview of Afghanistan’s economic situation.

Investor pledges $10 billion for energy, rail projects in Afghanistan

KABUL, Afghanistan — Afghan investor Mirwais Azizi has committed to investing $10 billion in Afghanistan’s energy and railway sectors soon.

Azizi, visiting Herat province in western Afghanistan, marked the completion of a 300-plus home township for earthquake victims in Herat.

Speaking in Herat on Friday, Azizi emphasized the significant investment opportunity in Afghanistan and the potential to create thousands of jobs through large-scale projects.

“This investment, unprecedented in Afghanistan’s history, will be a major milestone, offering vast employment prospects,” said Azizi, who leads the Azizi Foundation.

The newly built township in Siah Ab village, funded by his foundation, comprises nearly 300 houses, costing 200 million Afghanis ($2.8 million).

Azizi also plans to establish a large garden and park in the area, planting 15,000 to 20,000 fruit trees to provide sustainable income for residents.

The October 7, 2023, earthquake in Herat displaced tens of thousands and destroyed numerous homes. Azizi’s investment comes as Afghanistan faces escalating unemployment and economic challenges.

Afghan Carpets Displayed at Exhibition in Germany

The union of Afghan carpet exporters said that 8 companies have attended an exhibition in Germany, where they displayed Afghan made carpets.

The head of the union, Noor Ahmadi Noori, said that such an international exhibition helps to boost markets for the Afghan products.

“The exhibition was held from January11 to 14. Eight companies took the stalls and attended the exhibition,” he said.

The exhibition was held at Domotex International in Hannover Germany, where various countries like India, China and Iran display carpets and rugs.

“These carpets were sold here, which were not solved for many past years. There is no carpet left,” said Khodai Berdi, a participant.

The Afghanistan Chamber of Commerce and Investment (ACCI) said that the market for Afghan carpets is big in the European countries.

“Our major companies which are based in the north and some of them settled in Kabul, they are exporting high quality carpets to countries like France and Germany,” said Khanjan Alokozai, a member of the ACCI.

Based on the statistics of the MoIC, nearly 6 million square meters of carpet worth $22 million have been exported to Pakistan, Uzbekistan, Turkey, Italy, US, Germany, China and India within one year.

Afghanistan-Turkmenistan Trade Reached $481M in 2023

Afghanistan and Turkmenistan had $481 million worth of trade in 2023, officials at the Ministry of Trade and Industry said.

The acting minister of trade and industry met Turkmenistan’s ambassador to Kabul and discussed a range of trade issues, including the expansion of Afghanistan’s marble export to Turkmenistan.

The ministry in a statement said that both sides agreed on holding an expo for Afghan products in Ashgabat, the capital of Turkmenistan.

“Afghanistan and Turkmenistan had 481 US dollars’ worth of mutual trade in the year 2023,” Akhundzada Abdul Salaam Jawad, the spokesperson for the Ministry of Trade and Industry, told TOLOnews.

“One thing that we focus on is that we may have more exports in 2024 than 2023 so that we maintain a balance between exports and imports,” Zabiullah Mujahid, spokesperson for the Islamic Emirate said.

In the meantime, the Afghanistan Chamber of Commerce and Investment said that Turkmenistan has always been positive in trade with Afghanistan.

About the problems of Turkmenistan’s visas for Afghan traders, a member of the chamber said that despite such challenges, the Turghundi and Aqina have been key ports for trade.

“Turkmenistan is a country which borders the Caspian Sea on the one hand and maintains good relations with central Asian countries like Kazakhstan. Good relations with this country can help increase transit which will benefit Afghanistan,” Khan Jan Alokozai, a board member of the chamber of commerce and investment, told TOLOnews.

Economic analysts call for increasing the quality and quantity of products for keeping balance in imports and exports with neighboring and regional countries.

“To increase the level of exports and create balance in the bilateral trade, Afghanistan needs to raise its production and GDP,” said Abdul Zohor Modaber, an economist.

According to the ministry of trade and industry, electricity, oil and gas are among the key exports of Turkmenistan to Afghanistan while Afghanistan mostly export marble, dried fruits, potatoes and non-alcoholic beverages to Turkmenistan.

Afghanistan Conducted $779M Trade with India in 2023

The Ministry of Industry and Commerce (MoIC) said that Afghanistan conducted trade worth $779 million with India in 2023.

A spokesman for the MoIC, Abdul Salam Akhundzada, said that of $779 million in bilateral trade, $579 million were exports while $200 million were imports.

“Afghanistan’s trade with India in 2023 worth $779 million, with $579 million in exports and $200 million in imports,” Jawad said.

The Afghanistan Chamber of Commerce and Investment (ACCI), called India a good market for Afghan fresh and dry fruits.

“If India cooperates and brings ships via Chabahar port, we can sell the fruits to India instead of selling them to Pakistan with low prices. But the ships are not coming from

India, and we are facing so many problems,” said Khan Jan Alokozai, a member of the ACCI.

The traders meanwhile called on the Islamic Emirate’s officials to boost facilities to pave the ground for improvement of regional trades.

“Due to lack of agreements for export, due to lack of an organized framework for transit, existing problems at the custom offices and lack of air-corridors, important economic programs have been reduced,” said Mahbobullah Mohammadi, a trader.

The Islamic Emirate’s spokesman, Zabiullah Mujahid meanwhile said that they will provide further facilities for the traders and attempt to solve banking challenges.

“We attempt to eliminate the hurdles; thus, our traders will be able to transfer the money with an open hand.

They will be able to transfer money for export and import,” Mujahid said.

Chinese businessmen plan to invest $500 million in Afghanistan solar energy

A group of Chinese investors presented a plan to invest $500 million in Afghanistan’s solar energy sector as they met with Afghan chargé d’affaires in Islamabad on Friday.

The investors expressed significant interest in Afghanistan’s present economic prospects, Afghanistan Embassy in Islamabad said in a statement.

The Afghan chargé d’affaires affirmed the “Islamic Emirate of Afghanistan’s (IEA)” commitment to economy-centric policies, assuring investors of a transparent and mutually advantageous environment for investments that also benefit the general Afghan population, according to the statement.

November export value rises to $166.5 million; up by $12.5 million

The National Statistics and Information Authority (NSIA) has collected and analyzed data on the country’s exports and imports for November 2023 and found the total value of the country’s exports for the month was $166.5 million and the total value of imports was $791 million.

Exports for November 2022 totaled $154 million, which shows an increase of $12.5 million in November 2023.

Also, the total value of imports was $735.8 million in November 2022, which was an increase of $55.2 million in November 2023.

According to NSIA, most exports were to Pakistan, India and the United Arab Emirates in November 2023 – while the same period in 2022, the bulk of exports went to Pakistan, India and China.

Most imports meanwhile came from Iran, Pakistan and China in November 2023, against the bulk coming from Iran, China and Pakistan in the same period in 2022.

Contracts for Four Mines Signed

The Ministry of Mines and Petroleum (MoMP) said that four mining contracts worth more than 10.1 billion Afs have been signed with several companies.

The acting Minister of Mines and Petroleum, Shahabuddin Delawar said that the coal mine in the Karukh district of Herat, the gold mine in the Dushi district in Baghlan, the iron mine in the Pashtun Zarghoon district of Herat, and the chromite mine of Koh-e-Safi district of Parwan have been handed over to different companies.

Shahabuddin Delawar also said that based on the agreement between the ministry and the companies, mined materials will be processed inside the country, and in case of violation, the contracts with the companies will be terminated.

“The total investment in these mines, which I mentioned, is 10 billion 150 million 910 thousand 825 Afghanis,” he said.

The acting minister added that over $100 million has been invested in the building of the factory of fuel refinement in the Amu Darya basin in the province of Sar-e-Pul.

According to Delawar, based on the order of the leader of the Islamic Emirate, 450 out of 1700 emerald mines in Panjshir have been handed over to the residents of this province, and up to now $2,600,770 worth of emeralds have been extracted and over 10,000 Panjshir residents have been provided with employment opportunities.

“In three or four months, $2,600,770 worth of emeralds have been sold and are good for people. And some people extract it and sell it in auctions,” Shahabuddin Delawar added.

At the same time, some officials of the companies who won the contracts, emphasized that they will obey the agreement and will provide regional people with employment opportunities.

“We agreed and we are committed to provide complete service to the Islamic Emirate and to provide working opportunities for the nation,” said Wali Mohammad, the director of a company.

Based on the information of the MoMP, the extraction of the chromite mine of Koh-e-Safi in Parwan Province has been contracted for 5 years, and the contract for the other three mines has been set for 30 years each.