Wednesday, 12 December 2018

Afghan ministry unveils strategy for agricultural development

Afghanistan - First export shipment set for Lapis Lazuli route

Afghanistan got ready to export the first shipment of products through the Lapis Lazuli Transit, Trade and Transport Route. Cotton, dried fruit and sesame are among the products which will be exported through the route and 50 percent of the shipping cost will be provided by the government. Meanwhile, officials of Afghanistan Chamber of Commerce and Industries (ACCI) have called on the Afghan government to consider more facilities for the business community to export their products through such routes. The Afghan products are expected to be sent through Turkmenistan, Azerbaijan and Georgia to Turkey and onwards to European markets. “We expect this will not only be symbolic, but on a permanent basis. We should have the opportunity to export our fruit and minerals through the route to overcome our dependency on others,” said Khan Jan Alokozay, deputy head of ACCI. Based on statistics, the first shipment will include more than 175 tons of cotton, dried fruit and sesame, which will be exported through the route within the frame of TIR Carnet. The Lapis Lazuli Route agreement was signed in October last year between Afghanistan, Turkey, Turkmenistan, Azerbaijan and Georgia and once implemented will become a key international trade and transport corridor to connect Afghanistan with Europe directly. The Lapis Lazuli Route will begin in Afghanistan’s northern Aqina port in Faryab province and Torghandi in western Herat province and will run through to Turkmenbashi in Turkmenistan. From there it will cross the Caspian Sea and will link the Azerbaijani capital Baku to Tbilisi and Georgia’s Black Sea ports of Batumi and Poti. It will then connect with Kars in eastern Turkey before linking to Istanbul and Europe. The Lapis Lazuli Route agreement was finalized after three years of talks and was signed during the 7th Regional Economic Cooperation Conference on Afghanistan (RECCA VII) in Ashgabat, Turkmenistan.

Friday, 7 December 2018

Afghanistan has vast potential for its own textile industry say analysts, yet clothing and fabrics are imported annually to the value of over USD 500 million

Officials from the Afghan Chamber of Commerce and Industries (ACCI) said that Afghanistan imports over USD 500 million worth of textiles/clothing on an annual basis. It's imported from China, Iran, Turkey, Korea, India and Pakistan. Meanwhile a number of economic commentators say the government should invest in rebuilding Afghanistan’s textile factories to curb the country's reliance on others for fabrics.
Analysts say Afghanistan has vast potential for fabrics and cloth. “Currently we do not have production in Afghanistan, there are some factories in the country, but material is imported from abroad, this is an important industry which has been concentrated,” said deputy head of ACCI Khan Jan Alokozai. “There is no production in Afghanistan's clothing sector, all of it is imported from abroad, but shoes are produced inside the country,” said fabrics importer Obaidullah. Meanwhile residents have said that imported textiles and clothing is sold at higher prices at local markets. “Businesses are not in good condition compared to the past, because people’s economic condition is not good,” said Yaser, a textile seller in Kabul. “We need to undertake infrastructural work on this sector, the government should accept its responsibility. Government should work in this sector and use the cotton and raw materials which we have, so that textile factories are reconstructed,” said a shopper in Kabul, Nazir Ahmad Rahimi.

Afghanistan is a Top improver with record reforms to improve business climate

Afghanistan carried out a record number of business reforms in the past year, earning the country a spot in this year’s top 10 global improvers.
With five reforms in the past year, Afghanistan advanced to 167th place in the global ease of doing business rankings. On the measure of absolute progress towards best practice, Afghanistan significantly improved its Doing Business score by more than 10 points to 47.77.
The latest reforms were in the Doing Business areas of Starting a Business, Getting Credit, Protecting Minority Investors, Paying Taxes, and Resolving Insolvency.
“Improving the business environment is essential for Afghanistan to stimulate domestic investment and create jobs. Given the exceptional challenges of conflict and violence in the country, the government’s resolve to improve the business climate for private enterprise is doubly commendable,” said Shubham Chaudhuri, World Bank Country Director for Afghanistan. “We look forward to continuing to record Afghanistan’s successes in years to come.”
During the past year, Afghanistan made Starting a Business less costly by reducing the fees for business incorporation. As a result, the cost for an entrepreneur to start business in the country has significantly been reduced from 82.3 percent of the income per capita to only 6.4 percent.
Afghanistan focused on enhancing the legal framework for businesses. Minority investor protections were strengthened substantially, making Afghanistan one of the economies advancing the most in this area. A new law on limited liability companies made noteworthy progress toward mitigating the risks of prejudicial conflicts of interest in companies and strengthening corporate governance structures. In addition, the Commercial Procedure Code was amended to grant greater powers to shareholders to challenge related-party transactions. Protecting Minority Investors is an area of strength for Afghanistan. The country scores 9 out of 10 in this indic LEARN MOator’s three indexes, which measure access to evidence and allocation of legal expenses in shareholder litigation, shareholders’ rights and role in major corporate decisions and governance safeguards protecting shareholders from undue board control and entrenchment. Afghanistan has a global ranking of 26 in the area of Protecting Minority Investors.
Afghanistan also adopted a new insolvency framework in 2018. Secured creditors are now given absolute priority over other claims in insolvency proceedings. Afghanistan also made resolving insolvency easier by improving the continuation of the debtor’s business during insolvency proceedings and granting creditors greater participation in the proceedings.
Paying taxes was made easier with the adoption of a new tax administration and law with clear rules and guidelines on tax audit, and by automating the submission of tax returns. The time spent by businesses to pay their taxes in 2017 was reduced by 5 hours, to 270 hours, less than the South Asia regional average of 275 hours. Moreover, the time to comply with a corporate income tax audit has been halved from 207.5 hours to 111 hours,
Afghanistan performs well in the area of Starting a Business with a global rank of 49. However, it lags in areas such as Registering Property (with a global rank of 186), Dealing with Construction Permits (184) and Enforcing Contracts (181).

Monday, 29 October 2018

Afghanistan - Fuel costs increase by eight percent in four months

The cost of fuel, petrol and diesel, has increased by eight percent in the last four months which has raised concerns among motorists across the country. Fuel sellers said the increase in price on international markets and also the decrease in value of the Afghani against the US dollar are the main reasons for the price increase. Statistics show four months ago; one liter of petrol cost 46 AFN and one liter of diesel cost 43 AFN. But now, one liter of petrol costs 59 AFN and one liter of diesel costs 55 AFN. “When the cost of fuel increases on global markets and when there are changes in the value of foreign currencies, these all affect the cost of fuel on the local market,” Saleh, a manager of a fuel distributing company said. In the meantime, Fuel and Gas Enterprise officials said a number of people who have an influence on the fuel market may increase the cost to earn more money. Mustafa Khalazai, deputy head of the Fuel and Gas Enterprise, said those people who deliberately increase fuel prices or misuse the conditions will be treated based on the law. “So far, the changes in fuel prices on the Afghan market is because of changes on the international markets. We do not reject that some people may misuse such opportunities for earning more money,” said Khalazai. Meanwhile, a number of Kabul residents and motorists have complained about the increase in the price of fuel and urged government to control the market and to help curtail rising prices. “It has created problems for both drivers and people. If the drivers do not charge more money for passengers, then they cannot cover their costs, but if they charge more money, then it is difficult for people,” Ajmal, a Kabul resident said. “It is very difficult for drivers who transfer passengers in the city to make a living. Because the cost of fuel has gone up and also there is heavy traffic in the city,” Ferozuddin, a driver said. According to the statistics of Fuel and Gas Importers Union, Afghanistan imports 2.7 million tons of fuel and gas a year which costs at least $2.5 billion. However, this figure does not include the gas and fuel being smuggled in to the country illegally. A number of economic affairs analysts meanwhile say government should invest in the sector and in mines in order to enable the country to use its own oil and gas.