Afghanistan Economic Outlook

March 2025

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.

India Backs Kazakhstan’s Role in Afghan Reconstruction

Ambassador Ashok Sajjanhar, the president of the Institute of Global Studies, stated at a conference in Kazakhstan that New Delhi supports Astana’s active participation in Afghanistan’s economic and infrastructure reconstruction.

Speaking at a conference organized by the Kazakhstan Institute for Strategic Studies (KazISS), the president of the Indian Institute of Global Studies emphasized the necessity of cooperation between the two countries in developing the Trans-Afghan project and the Chabahar port.

The KazISS wrote: “Sajjanhar specifically mentioned Kazakhstan’s active participation in and support for Afghanistan’s economic and infrastructural reconstruction efforts. The parties expressed confidence in the necessity of both countries’ participation in the development of the Trans-Afghan Corridor.”

Meanwhile, Afghanistan’s Ministry of Economy also spoke about increasing economic ties with India and Kazakhstan. The ministry’s spokesperson described the completion of the Trans-Afghan project and the expansion of the Chabahar port as vital for strengthening Afghanistan’s trade relations with regional and global countries.

Abdul Rahman Habib, a spokesperson for the Ministry of Economy, told TOLOnews: “Chabahar port not only connects Afghanistan with Iran and India, but our country also benefits from becoming a transit route between Central Asian countries and India.”

Abdul Nasir Reshtia, an economic affairs expert, commented on the value of connecting to the regional railway network: “Afghanistan is a landlocked country, and once we are connected to the regional railway network, we can find new markets to sell our goods.”

Kazakhstan was the first country to remove the Islamic Emirate from its blacklist and has maintained good economic relations with the interim Afghan government over the past three years.

Afghanistan Exports 1,100 Tons of Black Pine Nuts

The Ministry of Industry and Commerce said that in the first eleven months of the current solar year, more than 1,100 tons of Afghanistan’s black pine nuts have been exported to various countries.

According to the ministry, the value of this amount of pine nuts exceeds 14 million dollars, with the main export destinations being China, Pakistan, the United Arab Emirates, the United States, Jordan, Austria, Italy, the United Kingdom, France, Germany, Australia, and Turkey.

However, statistics indicate that the export of black pine nuts has decreased this year compared to the same period last year.

“During 11 months of the year 1403, around 1,100 tons of pine nuts worth more than 14 million dollars have been exported to various countries,” said Akhundzada Abdul Salam Jawad, the spokesperson for the Ministry of Industry and Commerce.

Some economic experts believe that increasing efforts for global marketing of this product could generate significant revenue for Afghanistan.

“Black pine nuts are a highly valuable product with many buyers in global markets. The more we focus on their export, not only will national revenue increase, but new job opportunities will also be created,” said Abdul Nasir Reshtia, an economic expert.

“Afghanistan’s dried fruits have a high reputation globally. If we can invest in the packaging and processing of these products, we can maintain and strengthen Afghanistan’s position in international markets,” said economic expert Mohammad Nabi Afghan.

Despite Afghanistan’s high potential for dried fruit exports, challenges such as banking restrictions, the lack of standard processing factories, reduced air transportation, and business visa issues remain major obstacles to the development of this industry.

Afghan Women Entrepreneurs Seek Support to Expand Businesses

Abdul Rahman Habib, the spokesperson for the Ministry of Economy, emphasized the crucial role of women in Afghanistan’s economic growth.

Speaking to TOLOnews, the ministry’s spokesperson stated that currently 26,000 women are employed in the public sector, while another 250,000 women are engaged informally in various economic activities across the country.

Habib said: “At present, around 26,000 women are working in different public sector offices. Additionally, licenses have been issued to 10,000 women entrepreneurs, and nearly 250,000 women are involved in small businesses, handicrafts, and production on an informal basis.”

Akhundzada Abdul Salam Jawad, the spokesperson for the Ministry of Industry and Commerce, also affirmed: “The Ministry of Industry and Commerce has always supported women entrepreneurs and continues to do so in all aspects of industry and trade.”

Shirin, one of the women entrepreneurs, established a sewing workshop to support herself financially and create job opportunities for other girls. She told TOLOnews that she started her business with a small amount of money, and now her capital has grown to over 300,000 afghani.

Shirin Arwin shared her experience: “I started this class with just 500 afghani. Today, we have more than 300,000 to 400,000 afghani in capital. Initially, we set up this class at home, and later expanded it outside to other locations.”

Another woman entrepreneur, Sediqa, highlighted the importance of women in economic development: “Women are half of society. Those who engage in business not only support their families but also contribute to the national economy.”

Several other women entrepreneurs running small businesses have called for more support from the Islamic Emirate.

Najiba, a businesswoman, stated: “The more positive impact my work has on my family and friends, the greater the effect on the government and society. This, in turn, helps reduce poverty.”

Since the Islamic Emirate’s return to power, many women and girls have launched small businesses in different sectors to sustain their livelihoods.

8 KM of TAPI Pipeline Installed in Afghanistan: Ministry

Homayoon Afghan, the spokesperson for the Ministry of Mines and Petroleum, said that the construction of the TAPI project in Afghanistan has progressed by eight kilometers.

The ministry’s spokesperson said that with the improvement of weather conditions, the construction process of this project will accelerate.

TAPI (Turkmenistan-Afghanistan-Pakistan-India) is intended to transport Turkmenistan’s gas to Pakistan and India, generating an annual revenue of $400 million for Afghanistan through transit fees.

“So far, about 17.4 kilometers of the pipeline route survey for the TAPI project have been completed. Additionally, 10.2 kilometers of pipe have been transported to the site, 9.2 kilometers of land have been leveled for its extension, and eight kilometers of pipeline have been welded and installed,” stated Homayoon Afghan.

The spokesperson for the Ministry of Mines and Petroleum also emphasized that there are currently no challenges hindering the implementation of the TAPI project in Afghanistan, and the countries involved in this project are committed to completing it within the designated timeframe.

Some economic experts say that the implementation of the TAPI project is extremely important for Afghanistan.

“This project not only brings financial benefits to Afghanistan but will also lower gas prices, allowing people to benefit from it,” said Abdul Shakoor Hadawal, an economic affairs expert.

“Moreover, the TAPI project includes the development of fiber optics and a railway line, which, once completed, will introduce modern technology to the country and create more job opportunities,” Stated Mohammad Asif Stanikzai, another economic affairs expert.

It is worth mentioning that the TAPI project is not a standalone initiative; several other projects are integrated with it, including a 500-kilovolt power transmission line from Turkmenistan that will supply electricity to Pakistan via Afghanistan, as well as fiber optic cable installation and railway construction along the gas pipeline route.

Herat-Khaf Railway: Boosting Afghanistan’s Regional, Global Trade

Local officials in Herat state that the Herat-Khaf railway plays a key role in facilitating exports and imports between Afghanistan and regional countries.

In recent months, trade between Afghanistan and some neighboring and regional countries via this railway has increased, the officials said.

Mohammad Yousuf Saeedi, the spokesperson for the governor of Herat, said: “A commercial shipment has arrived at Rozanak station via the Herat-Khaf railway. This shipment consisted of 26 wagons, 20 of which contained sugar from the United Arab Emirates, while the remaining 6 carried cement and reached Rozanak station in Herat province.”

The transportation of goods via the Herat-Khaf railway between Afghanistan, Iran, and some regional countries has played a significant role in boosting trade within Afghanistan.

According to the Herat Chamber of Commerce and Investment, the flow of exports and imports via this railway has increased in recent months.

Mohammad Yousuf Amin, the executive director of the Herat Chamber of Commerce and Investment, said: “Transfers via the Herat-Khaf railway have seen good growth. As far as we have observed, shipments of construction materials and transit goods from the United Arab Emirates, Iran, Turkey, and India have arrived in Afghanistan. This railway accelerates transportation since road transport alone cannot address the challenges faced by our traders.”

Economic experts believe that the Herat-Khaf railway has connected Afghanistan to major global markets.

Gulabuddin Miri, an economic analyst, stated: “The Herat-Khaf railway contributes to the development of economic infrastructure and increases investment. It is also highly beneficial in facilitating exports and imports and reducing transportation costs. Strategically, it holds great importance as it connects Afghanistan to global markets.”

The Herat-Khaf railway links Afghanistan to Turkey and European markets via Iran. The final phases of construction on this railway, which extends to the Herat industrial park, are still underway.

Afghanistan Conducts $295M in Trade via Air Corridors in 1403

The Ministry of Industry and Commerce stated that in the current solar year of 1403, Afghanistan conducted trade worth $295 million with global markets through its air corridors.

According to Akhundzada Abdul Salam Jawad, the ministry’s spokesperson, exports accounted for $128 million of this total.

He noted that Afghanistan’s key export items during this period included dried fruits, saffron, jujube, black pine nuts, new clothing, and handicrafts.

The spokesperson said: “Afghanistan’s exports have been transported through Kabul, Kandahar, and Balkh airports to Austria, Jordan, Spain, the United Arab Emirates, Indonesia, the United Kingdom, the United States, South Africa, Germany, China, India, and other countries, with a total value reaching $295 million.”

The Chamber of Commerce and Investment, emphasizing the importance of air corridor transportation, calls for cost reductions to boost Afghanistan’s exports.

Mirzaman Popal, the chamber’s acting financial and administrative director, stated: “A percentage of subsidies should be allocated for traders and their goods. Negotiations should be held with airline companies to collaborate on reducing airport taxes and transportation costs.”

“Since Afghanistan lacks access to maritime trade routes, utilizing air corridors—especially through neighboring countries that facilitate Afghanistan’s international trade—is the best alternative,” said Asif Stanikzai, an economic analyst.

As a landlocked country, Afghanistan often faces trade restrictions from neighboring nations. Thus, air corridors serve as a vital solution for transporting commercial goods and connecting Afghanistan to global markets.

Afghanistan-Kazakhstan Trade Surpasses $430M in 1403: Ministry

The Ministry of Industry and Commerce reported that in the eleven months of the year 1403 (solar calendar), trade between Afghanistan and Kazakhstan exceeded $430 million.

Akhundzada Abdul Salam Jawad, the spokesperson for the ministry, stated that $45 million of this amount was from exports.

The spokesperson added: “Afghanistan’s trade with Kazakhstan in the 11 months of 1403 amounted to $430 million, of which $45 million were exports and $385 million were imports.”

Kazakhstan, recognized as one of the strongest economies in Central Asia, has expanded its trade and economic relations with Afghanistan since the return of the Islamic Emirate.

Meanwhile, the Chamber of Commerce and Investment considers Central Asian countries, particularly Kazakhstan, as a good market for Afghan goods and emphasizes increasing exports to the country.

Khanjan Alokozay, a board member of the Chamber of Commerce and Investment, told TOLOnews: “Our trade is increasing day by day. Most of our flour consumption is entirely imported from Kazakhstan, along with wheat, oil, and other goods. In total, our trade with Central Asia exceeds $800 million, of which $400 million is with Kazakhstan.”

“Visa facilitation for Afghan traders, the ability to transfer money between Afghan banks and Kazakhstan, and strengthening transportation infrastructure—which can ease the transfer of goods—are factors that can help improve trade relations between Afghanistan and Kazakhstan,” said Qutbuddin Yaqubi, an economic analyst.

According to the ministry, Afghanistan’s main exports to Kazakhstan include fruit juices, non-alcoholic beverages, raisins, vegetables, licorice, onions, pressure cookers, and grapes. The key imports from Kazakhstan include flour, sheet metal, flax, wheat, raw materials for industrial factories, chemical fertilizers, and petroleum products.

Kandahar's $447 Million Export Boom in Current Year

This year, 421,000 tons of export goods, valued at more than $447 million, have been exported from Kandahar to Pakistan, India, China, the United States, the United Arab Emirates, Sweden, Iran, Turkey, and Germany.

Officials from the Kandahar Chamber of Commerce and Investment say that, in addition to fresh and dried fruits, the exported goods also include legumes, minerals, vegetables, and animal products.

According to local officials in Kandahar, despite road closures, the volume of exports has not decreased compared to last year.

Abdul Baqi Bina, Deputy of the Kandahar Chamber of Commerce and Investment, said: “Over the past eleven months, we have had good exports from Kandahar. The total volume of exports is 421,758 tons, with a total value of $447,163,000, the majority of which consists of dried fruits.”

On the other hand, several dried fruit exporters in Kandahar have called for expanding trade relations with other countries instead of relying on Pakistan.

Abdul Mateen, a dried fruit exporter, said: “If an alternative route to Pakistan is not found, this issue will not be resolved, as Pakistan always creates obstacles for us in the export sector.”

Mohammad Yaqoob, another dried fruit exporter, stated: “First, the export challenges with Pakistan must be resolved. If these problems persist, agreements should be made with other countries to ensure a secure and stable export and import process.”

Sayed Mohammad Agha, a dried fruit exporter, said: “Our largest market for dried fruits is India, but we export through Pakistan. However, Pakistan constantly blocks our trade routes. Meanwhile, our agricultural production is increasing day by day.”

Officials from the Kandahar Chamber of Commerce and Investment state that, at present, in addition to Pakistan, trade relations with several Central Asian countries are also expanding.

1403 Review: Economic Situation of Afghanistan Amid Reduced Aid

Despite the implementation of economic projects in 1403, poverty and unemployment remained major challenges in Afghanistan.

Additionally, international economic sanctions against Afghanistan and the halt in foreign aid, including reductions in humanitarian assistance from global donors, further worsened the country’s economic struggles.

Migration and natural disasters, such as floods, also negatively impacted the economy.

“Every day we come to the square, but we cannot find work. We face many difficulties. We live in a rented house, and we ask wealthy individuals to help those in need,” said Kazem, a Kabul resident.

Impact of US Aid Reduction

With the new US administration under Donald Trump, an 83% suspension and eventual halt of US aid, including to Afghanistan, has raised global concerns.

In early Hoot, 1403 (February 19-March 20, 2025), UN Secretary-General António Guterres warned about the severe consequences of the US aid reduction, stating that more than 9 million Afghans would lose access to health and support services.

On Hoot 11, 1403 (March 1, 2025), Guterres said: “The consequences will be especially devastating for vulnerable people around the world. In Afghanistan, more than nine million people could lose access to health and protection services, as hundreds of mobile health teams and other critical programmes face suspension.”

Islamic Emirate’s Ministry of Economy criticized the politicization of humanitarian aid.

On Hoot 21, 1403 (March 11, 2025), ministry spokesperson Abdul Rahman Habib said: “Humanitarian aid aims to assist people in emergencies and must be provided impartially, according to humanitarian and ethical principles. These aids should not be used for political purposes.”

Banking restrictions, including limitations on money transfers and frozen Afghan assets, remain major obstacles to Afghanistan’s economic progress. These challenges have further exacerbated poverty and unemployment.

Recently, UNAMA chief Roza Otunbayeva expressed concerns at a UN Security Council meeting, revealing that in 2025, 23 million Afghans will require humanitarian assistance.

Similarly, the World Bank, in its latest 2024 report, warned of a serious food security crisis in Afghanistan. It stated that 11.6 million people (25% of the population) are facing severe food insecurity.

China, Iran, Turkey, and Uzbekistan Lead Mining Investments in Afghanistan

The Ministry of Mines and Petroleum says that the largest investments in Afghanistan’s mining sector have been made by companies from Uzbekistan, China, Turkey, and Iran.

Hayatullah Afghan, spokesperson for the Ministry of Mines and Petroleum, stated that the total value of these investments is estimated at eight billion dollars.

These companies have invested in Afghanistan’s copper, gold, iron, cement, and oil and gas mines.

Emphasizing that numerous facilities are now available for both domestic and foreign investors, Afghan said: “The biggest investors in Afghanistan’s mining sector are companies from Uzbekistan, Turkey, China, and Iran, which have invested in oil and gas, cement projects, and copper, gold, and iron mines.”

The Ministry of Economy believes that foreign investments in various sectors of the country play a vital role in economic growth.

Abdul Rahman Habib, spokesperson for the Ministry of Economy, said: “Our country has considerable economic potential, especially in mining, agriculture, energy production, and other sectors. At present, the necessary opportunities and facilities for attracting foreign investment are available.”

Ahmad Firdaws Behgozin, an economic analyst, said: “Foreign investors can be effective inside Afghanistan, especially since they have access to advanced machinery. Mining is a very delicate and sensitive sector.”

This comes as, following the return of the Islamic Emirate to power and the improvement in security, some foreign companies have shown interest in investing in Afghanistan.