Afghanistan Economic Outlook

December 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.

Qatar, USAID Sign Agreement to Provide $50M for Afghan Education

The United States Agency for International Development (USAID) and Qatar’s Education Above All (EAA) Foundation have signed a $50 million agreement to support the education of Afghan children and youth who have been deprived of schooling in Afghanistan.

The two organizations have also emphasized the importance of supporting education in Afghanistan.

Part of the organization’s statement reads: “EAA Foundation and USAID, together with the support of the Qatar Fund for Development (QFFD) as a strategic partner, will mobilize a combined USD 50 million in funding, equally contributed by both parties, to support the enrollment of over 100,000 out of school children and provide nearly 2000 post-secondary scholarships.”

Strengthening the education sector in Afghanistan is also one of the objectives mentioned in the agreement.

“From a broader perspective, it is essential to first identify students’ needs, work on this issue, and properly determine how the allocated funds should be utilized,” said Sayed Nabi Sadat, a university professor.

Students consider foreign aid in the education sector beneficial for improving the country’s educational situation.

“We have lost many exceptional talents due to economic challenges. Furthermore, attention must be paid to women, as this is essential,” said Sayed Najibullah a student.

“I urge the government to keep the doors of education open for everyone so that Afghan women can also create a bright future for themselves,” said Sajia a student.

Afghanistan has faced numerous challenges in the education sector over the past decades.
Lack of security, poverty, and cultural restrictions are among the factors that have significantly limited children’s and youth’s access to education.

World Bank: Afghanistan's Economy Faces Growth and Challenges

The World Bank has stated in a report that Afghanistan’s economy, although experiencing average growth, faces significant challenges such as financial restrictions, trade imbalances, and limited public investment capacity.

The report notes that the average growth of Gross Domestic Product (GDP) has been 2.7%, but the World Bank considers this growth uncertain.

According to the report, in 2021, provinces such as Kabul, Kandahar, Helmand, and Zabul, whose economies were largely dependent on foreign aid, experienced the steepest decline in economic activities compared to 2020.

The World Bank report also said: “Afghanistan’s economic recovery remains uncertain. The average GDP growth of 2.7%, driven by private consumption, has only compensated for about 10% of the past economic losses, indicating the slow and fragile nature of this recovery.”

Sakhi Ahmad Payman, the First Deputy of the Chamber of Industries and Mines, said: “The serious concerns that existed in the beginning regarding Afghanistan’s economy have fortunately led to a situation where our GDP has grown positively, monetary stability has been maintained, and inflation has decreased. These are positive points.”

“If you look at the activities that have been carried out in Afghanistan over the past three years in the economic sector, truly a lot of good work has been done. However, compared to the previous years of the republic, there is undoubtedly a difference because, at that time, the entire world was supporting Afghanistan, but after the political change, you saw that all economic aid to Afghanistan stopped,” said Abdul Naseer Rashtia, an economic affairs expert.

On the other hand, the Ministry of Economy said that for economic growth and development, the defacto government has implemented several infrastructure projects, including TAPI, over the past three years and is working to attract more investments.

Abdul Latif Nazari, the deputy minister of the Ministry of Economy, said: “There are many factors influencing the improvement of Afghanistan’s economic situation, including the eradication of corruption, the initiation of large economic projects, and job-creating projects, all of which will reduce poverty and improve the livelihoods of our dear fellow citizens.”

Previously, the World Bank had stated that after August 2021, it provided $1.7 billion in aid to Afghanistan.

Calls for Aid, Asset Release for Afghanistan at UN

In the recent meeting of the United Nations Security Council, some countries, along with Roza Otunbayeva, the head of the UN Assistance Mission in Afghanistan (UNAMA), emphasized the importance of supporting Afghanistan.

In this session, Roza Otunbayeva highlighted the significance of providing humanitarian aid to those in need in Afghanistan.

She stated: We have sought to help create the necessary space for millions of women, men, girls, and boys to receive life-saving humanitarian and basic human needs assistance. With the the generosity of donors, the UN in Afghanistan has been able to provide assistance to 15.3 million people this year.”

Tom Fletcher, the Deputy Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, also said in this meeting: “Although it now rarely makes headlines, Afghanistan remains in the grip of a staggering humanitarian crisis,” said Tom Fletcher, Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator.

He highlighted that half the population requires assistance, “making Afghanistan the second largest humanitarian crisis in the world, after only Sudan.”

China’s special representative at the meeting stressed the unconditional release of Afghanistan’s frozen assets by the United States.

Fu Cong said: “Humanitarian relief concerns the vital interests of all Afghan people and must not be used as a bargaining chip for political pressure. We call on traditional donors to increase financial investments. In particular, we call on the United States to unconditionally unfreeze and fully return overseas assets that belong to the Afghan people”

Afghanistan’s Ministry of Economy also emphasized that efforts to release Afghanistan’s frozen assets are ongoing.

Abdul Latif Nazari, the Deputy Minister for Technical Affairs at the Ministry of Economy, said: “Some problems exist due to sanctions, banking restrictions, and the freezing of Afghanistan’s assets. Our effort is to have the assets of the Afghan people released as soon as possible so they can be used for the economic growth and development of the country.”

Kazakhstan’s special representative at the meeting said that his country will continue its economic cooperation with Afghanistan.

He emphasized that infrastructure and connectivity projects to link Afghanistan with international trade, transport, logistics, and energy systems are essential for the country’s recovery and for creating jobs for ordinary Afghan citizens.

Afghanistan Exports Over $65 Million Worth of Coal in 8 Months

The Ministry of Industry and Commerce reports that more than $65 million worth of coal has been exported in the first eight months of the current solar year.

Abdul Salam Jawad, the spokesperson for the ministry, stated that approximately 654,000 tons of coal have been exported, primarily to Pakistan, China, Iran, India, and Turkey.

The spokesperson said: “During the first eight months of 1403, the country exported approximately 654,000 tons of coal valued at over $65.6 million to Pakistan, Iran, Turkey, India, and China.”

Meanwhile, the Chamber of Industries and Mines emphasized the need to facilitate coal exports further to increase revenue.

Sakhi Ahmad Paiman, Deputy of the Chamber of Industries and Mines, said: “Afghanistan has vast coal reserves, and two key factors must be considered to enhance exports: one, mechanized extraction; and two, pricing coal in line with regional and global markets.”

Abdul Ghaffar Nizami, an economic expert, stated: “The only benefit of coal exports is generating revenue for the government. However, if coal is used domestically, it can provide significant benefits, particularly to the economy.”

According to the Ministry of Mines and Petroleum, Afghanistan has a coal reserve belt that stretches 700 kilometers in length and 35 to 40 kilometers in width, starting in Badakhshan and ending in Herat.

Over $2.8 Billion Invested in Afghanistan's Telecom Sector

Officials from the ATRA (Afghanistan Telecom Regulatory Authority) said that more than $2.8 billion has been invested in Afghanistan’s telecommunications sector.

At a ceremony introducing a new internet package by the Roshan telecommunications company, Atta Mohammad Yari, the technical deputy of this authority, stated that 25.9 million people in Afghanistan use telecommunications services, and this sector has created job opportunities for about 118,000 people.

“More than $2.8 billion has been invested in the telecommunications sector, and in the past year alone, $187 million has been invested. We are gradually witnessing the expansion of investments in this sector,” he said.

Yari also mentioned that 33.9 million SIM cards have been distributed to citizens across the country so far.

Regarding the expansion of fiber optics in Afghanistan, he said: “Fiber optics is an infrastructure that is highly effective for land-based communications and economic development in many countries. Currently, Afghanistan has been connected to 9,138 kilometers of fiber optic cables, and this service is available in major cities.”

Meanwhile, Roshan Telecommunications Company introduced a new internet package called Alpha Prime.

This package will be offered to customers with new features.

Abdul Aziz Niazi, Senior Deputy of Communications and Marketing at Roshan, spoke about the features of this package: “This package includes unlimited minutes to the Roshan network, minutes to other networks, and most importantly, unlimited WhatsApp a feature that no other company has offered so far.”

ATRA also called on all telecommunications companies in the country to provide better and higher-quality services to citizens through healthy competition.

Afghanistan, Turkmenistan Agree on Accelerating TAPI Project

Amir Khan Muttaqi, the acting Minister of Foreign Affairs, traveled to the shared border between Afghanistan and Turkmenistan to assess the progress of the TAPI project.

Zia Ahmad Takal, deputy spokesman for the Ministry of Foreign Affairs, stated that Amir Khan Muttaqi and the Turkmenistan Foreign Minister inspected the progress of the TAPI project and discussed various issues, particularly the development of the railway, fiber optics, and transportation.

The deputy spokesman for the Ministry of Foreign Affairs said: “Both sides agreed to accelerate the TAPI project, develop the railway, electricity, transportation facilities, streamline the visa issuance process, and enhance economic cooperation. Technical teams will continue their meetings in Kabul and Ashgabat.”

This comes as work on the TAPI project in Afghanistan has recently begun.

Meanwhile, some experts call the TAPI project one of the most important regional projects and emphasize the timely completion of its work within Afghanistan.

Mohammad Nabi Afghan, an economic affairs expert, told: “Economically, Afghanistan will become ready for investment and will show the world that we are now prepared for implementing global projects and that conditions have been facilitated. For planning and implementing such major projects, necessary steps must be observed domestically.”

Abdul Ghaffar Nizami, another economic expert, said: “The government needs to use all the resources at its disposal to implement this project. Additionally, the challenges facing the TAPI project must be resolved wisely, considering all aspects, so the project is not hindered.”

With the implementation of the TAPI project, Turkmenistan’s gas will be transported through Afghanistan to Pakistan and then to India.

According to statistics, this gas pipeline will transfer 33 billion cubic meters of Turkmenistan’s gas annually to Pakistan and subsequently to India.

$8.363 Billion in Trade with Regional Countries in 8 Months: Ministry

The Ministry of Industry and Commerce reported that in the first eight months of the current solar year, Afghanistan’s trade with regional countries amounted to $8.363 billion.

The ministry’s spokesperson emphasized that out of this total, $1.172 billion were exports.

During this period, Afghanistan’s primary export destinations included Pakistan, India, Iran, the United Arab Emirates, Uzbekistan, Kazakhstan, China, Turkey, Iraq, and Tajikistan.

Abdul Salam Jawad, the spokesperson for the Ministry of Industry and Commerce, stated: “Afghanistan’s trade during the first eight months of 1403 (solar year) reached approximately $8.363 billion, including $1.172 billion in exports and $7.191 billion in imports.”

Meanwhile, the Chamber of Commerce and Investment considers Central Asian countries a suitable market for Afghanistan’s agricultural products. It emphasizes the need for more trade and transit agreements to boost exports.

Khanjan Alokozay, a member of the board of directors of the Chamber of Commerce and Investment, said: “We have exports, but they are limited in other countries. A trade route to Moscow must be established. Efforts are underway to make the Moscow market more accessible and closer by addressing transport and transit issues that involve crossing through three or four countries, which could be resolved through a multilateral agreement.”

On the other hand, the Chamber of Agriculture and Livestock believes that supporting farmers and providing more facilities to traders would increase domestic production and create additional opportunities for exports.

Mirwais Haji Zada, the deputy head of the Chamber of Agriculture and Livestock, stated: “Exports to foreign countries like India, and especially China, should increase.

Russia and Kazakhstan are also excellent markets. We have been exporting through Uzbekistan, but this route occasionally faces logistical challenges. Exports should also be facilitated via waterways, with proper coordination with road transport.”

According to data from the Ministry of Industry and Commerce, Afghanistan’s top exports during these eight months included fresh and dried fruits, cotton, heng, and coal. Its major imports consisted of petroleum products, flour, rice, vehicle spare parts, machinery, textiles, liquefied gas, and cement.

Afghanistan’s Pomegranate Exports Hit $33 Million, But Challenges Persist

The Ministry of Industry and Commerce reported that in the first eight months of the current solar year (1403), Afghanistan exported over $33 million worth of pomegranates.

Abdul Salam Jawad, spokesperson for the Ministry of Industry and Commerce, stated that most pomegranate exports were sent to Pakistan, India, Tajikistan, Uzbekistan, Turkmenistan, Kazakhstan, and the United Arab Emirates.

The spokesperson said: “Afghanistan exported approximately 63,000 tons of pomegranates over eight months in 1403, valued at $33.3 million. The exports were made to countries including India, Pakistan, Tajikistan, Turkmenistan, Iraq, the UAE, Kazakhstan, and Uzbekistan.”

Some orchard owners who traveled to Kabul from provinces to sell their pomegranate produce said that while pomegranate yields increased this year, the market for selling the fruit remained sluggish.

Zia-ul-Haq, an orchard owner from Farah province, stated: “This year, our yields were high, but the problem is that there’s no proper market for selling.”

Mohammad Zarif, another orchard owner from Farah, said: “We paid 70,000 afghani in rent. The municipality charges 300 afghani per ton, there are seven to eight checkpoints along the way that collect 700 to 800 afghani, and transport costs us 1,000 afghani.”

Meanwhile, some traders highlighted that due to trade challenges with Pakistan, pomegranate exports decreased this year. They urged the defacto government officials to establish alternative trade routes and activate air corridors to boost exports.

Mohammad Agha Sadat, a trader, told: “We can’t even cover our expenses. One major issue is the low value of the Pakistani rupee, with 1,000 rupees equaling 240 afghani. Additionally, they tax us 76 rupees per kilogram. This year, we had no exports—our exports were zero.”

At the same time, the Ministry of Agriculture, Irrigation, and Livestock reported that pomegranate yields had increased this year compared to the previous year.

Misbahuddin Mustaeen, spokesperson for the Ministry of Agriculture, Irrigation, and Livestock, said: “The ministry is always working to provide greater facilities for the production and harvesting of agricultural products and supports farmers and orchard owners in selling their produce.”

Afghanistan, an agricultural country, relies heavily on this sector, with over 80% of its citizens engaged in agriculture for their livelihoods.

Taliban sign cement production deal in Logar province with private firm

KABUL, Afghanistan — The Taliban-led Ministry of Mines and Petroleum signed a 30-year agreement on Tuesday with the private company SAKO Afghan to establish a cement production facility in the Altamor area of Logar Province.

Hedayatullah Badri, the Taliban’s minister of mines, said during the signing ceremony in Kabul that the project would involve an investment of $145 million by SAKO Afghan. The facility is expected to produce 2,500 tons of cement daily, meeting a significant portion of Afghanistan’s domestic demand.

“This project will play a crucial role in the country’s reconstruction and economic development,” Badri said, adding that it would create hundreds of job opportunities.

Wu Zeidan, the president of SAKO Afghan, assured attendees that the project would be completed on schedule and in compliance with the contract’s terms, adhering to international standards.

The Taliban have said that, to date, they have signed contracts for four major cement production projects valued at a total of $623 million with both domestic and foreign investors, with work on these projects reportedly progressing.

However, the Taliban’s management of Afghanistan’s mining revenues has faced widespread criticism, with experts and observers raising concerns over a lack of transparency in how funds are allocated.

Travel Prices Lower Since Start of Kabul-Doha Direct Flights

Direct flights from Kabul to Doha and vice versa have been launched by Kam Air. During the inauguration ceremony, the officials of this airline said that this initiative has facilitated travel for passengers on both sides.

According to Kam Air officials, the airline will conduct three weekly flights between Kabul and Doha.

Jahed Azimi, the CEO of Kam Air, told: “An agreement was signed, and based on that, we launched the first flight. These flights provide ease for our passengers and Afghan citizens working in Qatar, as traveling to Afghanistan was previously challenging for them.”

Passengers also consider the launch of direct Kabul-Doha flights significant for saving time. They say that they used to travel via Dubai to reach Doha, which not only consumed time but also cost between $800 and $900 per ticket. However, the direct flights from Kabul to Doha have now eased the process for them.

Muzaffar Babakarkhil, a businessman, told: “Previously, we faced many challenges. We used to travel either through Dubai or Kuwait to reach Doha. Now we are happy that we don’t waste time and can travel directly to Doha.”

Shukrullah Helmandi, another passenger, said: “Previously, we used to travel through foreign airlines via Dubai, and the ticket cost $900. Now we are happy to fly with an Afghan airline for $425.”

After the first Kam Air flight landed at Doha Airport, a brief inauguration program for the direct flights was held with the participation of officials from the airports of both countries, the Ministry of Transport and Civil Aviation of Afghanistan, and officials from the Afghan embassy in Qatar.

Mohammad Naeem, acting head of the Afghanistan embassy in Qatar, said regarding these flights: “We hope this will be effective in the realm of trade. This [launch of direct flights] is a significant development and good news for our people.”

According to the Ministry of Transport and Civil Aviation, Afghanistan currently has direct flights to ten neighboring and regional countries. The launch of direct and transit flights to Qatar is expected to provide further ease for travelers.

Afghan Companies Shine at the International Halal Expo in Istanbul

In this expo, 30 Afghan companies showcased various Afghan products, including mineral stones, carpets, and dried fruits.

On the sidelines of the expo, the acting Minister of Industry and Commerce met with members of Turkey’s Foreign Economic Relations Board to discuss increasing trade volume between the two countries, as well as investment in sectors such as energy, technology, oil and gas, construction, logistics, mining, and textiles.

Afghan participants said the expo is beneficial for introducing and marketing domestic products, and they emphasized the need for organizing more international exhibitions.

Azmuddin Khanjani, an Afghan businessman, said: “This expo was of great importance. Representatives from 120 countries participated and showcased various export products. They showed significant interest in Afghanistan’s high-quality goods and fruits.”

Saber, another Afghan businessman, said: “We talked with American businessmen at this expo and held meetings with Turkish traders. We discussed the export of carpets, and they requested direct carpet exports from Afghanistan, suggesting that other processes be carried out in Turkey.”

The Afghan-Turk Business Association based in Istanbul also said the expo is instrumental in marketing Afghan products and enhancing relations between Kabul and Ankara.
The association’s president stressed that facilitating trade and industry would foster economic growth and expand Afghanistan’s trade with other countries.

Ezatullah Sadat, the president of the Afghan-Turk Business Association, said: “Cooperation with traders should increase, and more programs, conferences, and expos should be organized to help Afghanistan’s trade grow.”

Meanwhile, the Ministry of Industry and Commerce announced that the acting minister visited the most modern and historic state printing facility in Turkey on the sidelines of the Halal Expo.

Officials from this facility presented a coin minted in honor of Mawlana Jalaluddin Mohammad Balkhi to Nooruddin Azizi and the Islamic Emirate’s Consul General in Turkey.

First Rail Shipment From China Reaches Afghanistan Via Iran

Mohammad Ashraf Haqshenas, spokesperson for the Ministry of Public Works, told TOLOnews that the first rail transit shipment from China reached Afghanistan through Iran.

Haqshenas said that this shipment, which includes 1,000 tons of iron coils, arrived via Iran’s railway to Rozanak station in Herat province.

The spokesperson for the Ministry of Public Works stated: “With the completion of the Khaf-Herat railway project, new opportunities for Afghanistan’s economy will be created, and a suitable foundation for expanding trade and transit in the region will be established. The Ministry of Public Works of Afghanistan is striving to construct railway infrastructure to provide more facilities for the expansion of trade, transit, and increased transportation in Afghanistan.”

Some economic experts consider transportation through railways a significant step in enhancing Afghanistan’s transit connections with regional countries and emphasized the need for further investment in this sector.

“Since Afghanistan is a landlocked country and lacks access to open waters, it has always faced various challenges in trade. Whenever Afghanistan is connected to the global rail network, we will witness significant growth in the country’s trade,” said Abdul Nasir Reshtia, an economic expert.

“The first advantage of railways is that large volumes of goods can be transported from one country to another. Second, for Afghan traders, rail transit is far cheaper compared to air and road transportation,” said Abdul Shakoor Hadawal, an economic expert.

Earlier, a large shipment of Afghan commercial goods, in 55 cars, arrived directly from China to Afghanistan’s Hairatan port after 20 days of transit through Kazakhstan and Uzbekistan.