Afghanistan Economic Outlook

March 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.

Landmark CASA-1000 Project Implementation Signed

Officials in the Islamic Emirate announced the signing of the implementation of the CASA-1000 project between Kyrgyzstan, Uzbekistan, Afghanistan, and Pakistan.

The de facto government spokesperson, informed medias that the practical execution of this project is slated to start in late April. He highlighted that this project would substantially mitigate Afghanistan’s electricity shortfall while generating significant transit revenue for the country.

The Afghanistan Chamber of Commerce and Investment (ACCI) regards the CASA-1000 project’s realization as highly advantageous for the national economy.

Experts also deem the CASA-1000 project crucial for Afghanistan and its Central and South Asian neighbors. They argue that the project’s commencement will elevate Afghanistan’s standing among nations and spur job creation for numerous citizens.

Amanullah Ghalib, former head of Breshna Company, shared with media: “About 35 to 40 percent of the project is already underway, with 60 to 70 percent of the work pending in Afghanistan. Both previously contracted companies are prepared to resume their contributions. This venture will not only foster job creation but also bolster Afghanistan’s regional stature.”

Officials confirm that with the resumption of the remaining CASA-1000 project tasks, completion is anticipated within two years, marking a significant step towards energy independence and economic revitalization.

Afghan Traders Call Expo in Ashgabat 'Beneficial', Large Sales Reported

After the conclusion of the Afghan-Turkmen exhibition, Nooruddin Azizi, the acting Minister of Industry and Commerce (MOIC), stated that a significant amount of the country’s products showcased at the three-day exhibition in Ashgabat were sold.

The economic delegation of the Islamic Emirate led by the acting Minister of Industry and Commerce, including over 300 businesspeople and industrialists, returned to Kabul after a six-day trip to Turkmenistan.

Nooruddin Azizi said that besides participation in the Afghanistan-Turkmenistan exhibition, they also attended the Afghanistan-Turkmenistan trade business connection meeting and some more meetings like this, and that the meetings were beneficial.

Several participants in the Afghan-Turkmen exhibition indicated that some contracts have also been signed.

Fifteen female traders and industrialists from the country also participated in the exhibition. They said that women’s products also had good sales at the exhibition.

“Women participated in various sectors in the exhibition, and fortunately, they could have contracts with Turkmenistan in the handicrafts, precious stones, and carpet sectors,” said Fariba Noori, the head of the board of directors of the Chamber of Commerce and Industries for Women.

Chinese investors in Kabul for talks with IEA

The acting Minister of Mines and Petroleum Shahabuddin Delawar met with a number of Chinese investors on Sunday in his office in Kabul to discuss investment opportunities.

The Ministry of Mines and Petroleum said in a post on X, that in this meeting, Chinese investors expressed their satisfaction with the favorable environment for investment, and said they were specifically interested in investing in marble mines.

Afghanistan: 10 cold storage facilities built in Paktia, farmers seek more support

In the eastern province of Paktia, at least 10 cold storage facilities have been constructed in the Samkanai district, although farmers are calling for additional support to preserve their produce, enhance their fields, and obtain fertilizers.

Local Taliban officials reported that the project was completed at a cost of 5 million Afghanis.

While some cold storage units previously existed in the area, they were not operational until this project was initiated.

Samkanai is recognized as one of Paktia’s most significant districts, with a large portion of its population involved in agriculture.

Farmers in the district have expressed a desire to expand the number of cold storage facilities to better store their products.

The scarcity of cold storage has been a longstanding challenge for the region’s farmers, leading to spoilage of fruits and vegetables or sales at reduced prices.

Women in Afghanistan sell handicrafts abroad via online stores

A company in Kabul helps women sell their handmade crafts internationally through online stores. Many female artisans can now reach customers outside Afghanistan with their products.

The authentic company, operating in the sectors of introducing Afghan handicrafts and domestic production abroad, says it has created online stores for dozens of talented women artisans to sell their products.

Samira Gohari, the media manager of this company, says they have created a special section to introduce and support Afghan handicrafts, with a majority of women actively participating in that section.

She further stated, “We have online stores to showcase handicrafts where female artisans sell their products such as traditional Afghan clothing, jewellery, engraving, and paintings.”

Meanwhile, Laura Fashion, a women-led clothing brand in Kabul, says they are active in designing and sewing Afghan clothes, with most of their customers being Afghan citizens living abroad.

Tahira Omari, another female entrepreneur in Kabul, who sells her products through an authentic company, has been involved in tailoring and embroidery for about a decade, with approximately 40 women now working in her workshop.

It is worth noting that in the past two years, more women have turned to handicrafts, with some contributing to their family’s income through these means.

Tahmina, a seamstress, says she has been working in tailoring and embroidery for two years now, supporting her family through these means.

Afghan handicrafts, including traditional Afghan clothing, have recently gained attention internationally, with this product primarily prepared and sent abroad by Afghan women.

Various Infrastructure Projects Initiated in Past Solar Year 1402

The commencement of the second phase of the Qosh Tepa canal, the completion of 114 projects worth 13 billion afghani, holding trade exhibitions, and awarding various contracts to domestic and foreign companies were among the most significant economic issues this year.

The Ministry of Economy has reported that this year, 114 out of 177 projects, worth 13 billion afghanis, were implemented, and efforts are ongoing to reduce poverty in the country through the initiation of infrastructure projects.

This year, more than 180 projects worth over 60 billion afghani were approved by the National Procurement Commission. The initiation of more than 110 projects by the Ministry of Public Works and approximately $8 billion in investments in various mining sectors in the country are counted among other activities of the Islamic Emirate.

Several joint exhibitions were held in Afghanistan and other countries with the aim of developing and expanding Afghanistan’s trade relations with regional and global countries.

An exhibition was held in Kazakhstan in the month of Asad (July 2023), and another exhibition in Turkmenistan in the month of Hoot (March 2024).

Similarly, joint Afghanistan-Uzbekistan and Afghanistan-Iran exhibitions were also held in Kabul.

Besides exhibitions, officials of the de facto government, including the Deputy PM for Economic Affairs, the acting Ministers of Foreign Affairs, Industry and Trade, Transport and Civil Aviation, Energy and Water, and the Director of the Railway Authority, traveled to countries such as Turkey, China, Iran, Russia, Kazakhstan, Uzbekistan, Turkmenistan, and Pakistan which aimed at increasing economic growth and developing Afghanistan’s trade.

The Minister of Economy and Trade of Kyrgyzstan, Daniyar Amanaliev, left for Kabul leading a high-ranked delegation in the month of (January 2024). Daniyar Amanaliev at that time stated the purpose of the visit to Afghanistan was to develop trade, transit, and address the existing challenges between the two countries.

The Ministry of Transport and Civil Aviation this year announced efforts to standardize the country’s airports. Officials of this ministry added that currently 27 airports are active in the country, and international flights are conducted from five airports.

Although the assets of Afghanistan, frozen by the United States and European countries, were not released after the return of the Islamic Emirate to power, the afghani enjoyed good stability this year.

Central Bank statistics show that the value of the afghani increased by more than 17% in 1402 compared to the previous year.

Despite these advancements, Afghanistan remains among the countries where millions of people are in need of humanitarian aid.

Afghanistan Trust Fund Reports $204 Million Profit

Shah Mohammad Mehrabi, Central Bank supreme council member and board member of the Afghan Trust Fund in Switzerland, told TOLOnews that since its establishment until December 2023, the fund has made a profit of $204 million dollars.

According to Mehrabi, it is expected that the profit of this trust fund will reach $250 million dollars by the end of this month.

Shah Mohammad Mehrabi said: “The Afghanistan Trust Fund has made significant progress in the area of asset protection since its establishment. Initially, the assets of this fund were deposited in the Bank for International Settlements to benefit from its advantages. Following that, this fund has secured its privileges and immunities from the Swiss government, which legally protects its assets.”

Meanwhile, the Afghanistan Chamber of Industries and Mines said that the provisions of the trust fund should be spent on the economic growth of Afghanistan.

Shirbaz Kaminzada, head of the Afghanistan Chamber of Industry and Mines said: “We hope that the amount deposited in the trust fund will be used for the development of the country and its industry.”

At the same time, the Ministry of Economy once again asked the international community to unconditionally release all of Afghanistan’s assets.

Abdul Latif Nazari, Deputy Minister of Economy said: “The frozen funds and assets of the Afghan people should be released as soon as possible; the principal of this money and its contents should be made available to the Central Bank of Afghanistan, this is the right of the Afghan people.”

More than $9 billion of Afghanistan’s assets in foreign banks were frozen after the return of the Islamic Emirate, of which $7 billion are held in banks in the United States, and Washington created the Afghanistan Trust Fund on September 15, 2023, to hold half of these assets in Switzerland.

Afghanistan, Uzbekistan Aim to Strengthen Economic Ties and Enhance Trade

The acting Minister of Industry and Commerce Nooruddin Azizi, participated in a bilateral meeting to strengthen the economic relations between Afghanistan and Uzbekistan in Hairatan port.

During this meeting, discussions were held on increasing working hours at the customs of both countries, developing and expanding bilateral and multilateral cooperation in the field of international transport, organizing exhibitions of Afghan products in Uzbekistan, and Uzbek investments in the agriculture, cement, and thermal power generation from coal sectors.

Akhundzada Abdul Salam Jawad, the spokesman for the Ministry of Industry and Commerce, said: “Holding a business communication conference and an exhibition of Afghan products and productions in Uzbekistan, installation of scanners for the check and review of perishable goods in Uzbek soil, facilitation of visa issuance for the private sector of the country, increasing working hours at the customs of both countries, and the development and expansion of bilateral and multilateral cooperation in the field of international transport were discussed.”

The Chamber of Commerce and Investment said that developing trade relations with Central Asian countries can play a significant role in increasing the exports and transit of Afghan goods through this route to European countries, China, and Russia.

Meanwhile, some traders said that despite frequent meetings between Uzbek officials and the authorities of the de facto government, traders face challenges in trading with Tashkent.

Last week, a 30-member delegation led by the Foreign Minister of Uzbekistan came to Afghanistan and met with high-ranking officials of the de facto government to discuss bilateral political and economic relations.

Economic, Electricity Projects Worth 4 billion Afs Signed: Official

Agreements for four projects worth 4 billion Afghanis were signed between the officials of the Islamic Emirate and the private sector.

The head of Facilitation and Investment of the Administrative Office of the de facto government, Ahmad Zia Khalid, said that these projects include the production of 23 megawatts of solar power in the Sarobi district of Kabul, the construction of two substations in Herat, the extension of a 220-kilovolt power line in this province, the construction of a commercial market in the Kot-e- Sangi area of Kabul city, and the establishment of a commercial center and residential apartments in Helmand province.

“The second project in Helmand province, in the city of Lashkar Gah, in first district, is the Luqman Hakim commercial market, a public-private partnership,” said Ahmadzia Khalid.

Similarly, the acting Minister of Energy and Water, Abdul Latif Mansoor said that with the transparency provided by the officials of the Islamic Emirate in the investment sector, the interest of domestic and foreign investors in the country has increased.

Afghanistan: $50 million investment marks second phase inauguration of Milat Steel Factory

KABUL, Afghanistan — The Milat Steel factory, specializing in iron smelting, launched its second phase with a $50 million investment during a ceremony in Kabul on Sunday.

Company officials announced that construction for the third phase is underway, with plans to commence operations within six months.

Naqibullah Nazari, the factory’s head, highlighted that the expansion has created employment opportunities for over 2,000 individuals. The facility currently produces Grade 60 reinforcement rebar, a critical component in construction.

“During the upcoming third phase, we aim to start manufacturing railroad materials,” Nazari stated, emphasizing that half of the iron processing is conducted domestically.

He also appealed to the Taliban government to lower the export tariffs on rebar to facilitate international trade. Nazari revealed an export agreement for 100 tons of rebar with Uzbekistani companies, indicating a significant step towards international business relations.

With the initiation of the third phase, company representatives anticipate a further increase in job opportunities at the factory.

Abdul Ghani Baradar, the Taliban’s Deputy Prime Minister for the Economy, attended the ceremony and declared an increase in import tariffs to bolster domestic manufacturing.

Established in 2022, Milat Steel is emerging as a key player in Afghanistan’s industrial sector, contributing to both the local economy and employment.