World bank survey highlights challenges for Afghan business

43

The World Bank said its second private survey finds that many firms in Afghanistan are adjusting to the new business environment but most still face daunting challenges.

Melinda Good, World Bank Country Director for Afghanistan, said that Afghanistan continues to face enormous social and economic challenges that have a heavy impact on the welfare of its people, especially women, girls, and minorities.

“The new survey confirms the resilience of Afghanistan’s private sector, which can play a key role in the economic recovery of the country and improving the lives of all Afghans,” she said. “It also shows that firms continue to suffer from impacts of political uncertainty and policy fragmentation, Afghanistan’s isolation from the international financial sector, and reductions in international assistance.”

The Islamic Emirate said that the suspension of international aid and the freezing of the Afghan Central Bank’s assets had a negative impact on the Afghan economic condition.

“We call on the international community to separate the matters of humanitarian crisis from political issues,” said Abdul Latif Nazari, deputy economy minister.

The report said “more than three-fourths of firms surveyed in Round 2 are operational, compared to two-thirds in Round 1 of the survey.”

Regarding employment and women-owned businesses: “Employment remained around 50 percent lower, on average, than before August 2021, compared to 61 percent lower in Round 1 of the survey. Women-owned businesses are most affected by restrictions…”.

The report said the international banking factors have affected the situation: “Businesses continue to be negatively impacted by the loss of international banking relationships, which has disrupted international payments and limited access to bank accounts and formal banking,” and “imports are costlier due to border closures and non-availability in the local markets; domestic inputs remain a challenge, owing mainly to price inflation and the closures of suppliers’ businesses.”

The surveys indicated that the majority of businesses are dealing with problems by laying off workers.

According to the World Bank, corruption is generally down but recently there has been an uptick: “Overall levels of corruption with respect to paying taxes and clearing goods through customs are significantly down compared to one year ago, but there are signs of an uptick in the past six months.”

The head of the Afghanistan Chamber of Commerce and Investment (ACCI) said that the imports significantly dropped after the fall of the former government.

“During the time of the republic government, we had imports of between $8 to $9 billion but the imports dropped to $5 billion. Our imports are currently only food materials,” said Khanjan Alokozai, a member of the ACCI.

“The banks have a special role in economic enhancement,” said Seyar Qureshi, an economist.

Previous articleTourism industry and economic sustainability in Afghanistan
Next articleLack of intl engagement caused economic challenges: Haqqani