Business
World Bank survey finds Afghan firms still face ‘daunting challenges’
The World Bank said Monday many businesses in Afghanistan are adjusting to the new business environment but most still face daunting challenges.
The World Bank’s second private sector survey, published Monday, was conducted in May and June 2022.
The Private Sector Rapid Survey (PSRS) Round 2 assessed the status, constraints, and investment outlook of businesses, and the impacts of the ongoing economic challenges faced by private sector firms in Afghanistan.
“Afghanistan continues to face enormous social and economic challenges that are impacting heavily 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,” said Melinda Good, World Bank Country Director for Afghanistan.
“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,” she said.
More than three-fourths of firms surveyed in Round 2 are operational, compared to two-thirds in Round 1, conducted in October and November last year.
However, most are operating significantly below their full capacity and are only considered partially open, the World Bank stated. Consumer demand appears to have slightly improved in past months but remains considerably lower than before August 2021.
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 on women’s mobility, resulting in disproportionate revenue and job losses, World Bank stated.
Female employment remains 62 percent lower than before August 2021, while it was 75 percent lower in November 2021.
In addition to this, the World Bank found that 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.
“Firms are resorting to the use of informal money transfer systems for domestic payments,” the bank stated.
Despite some businesses hiring employees, the majority of respondents have coped with these challenges by laying off employees, shifting to cash and informal payment channels, shrinking investments, and lowering staff salaries, World Bank reported.
“Action is required by the authorities to unlock possibilities for much-needed international economic integration and domestic opportunities for Afghanistan’s private sector,” said Good.
“This includes increased transparency in public finances and reestablishing central bank independence. With measures like these and continued resilience of businesses, a sustainable private sector-led recovery is possible.”
Business
‘Made in Afghanistan’ expo opens in Tashkent
The Afghanistan Chamber of Commerce and Investment has announced that a major exhibition of Afghan products titled “Made in Afghanistan” is opening today (Wednesday) in Uzbekistan’s capital Tashkent.
According to the chamber, the expo—supported financially by the United Nations Development Programme—will run until Friday and aims to showcase Afghanistan’s production and export potential.
More than 60 booths have been set up by Afghan traders, featuring a wide range of products including carpets, dried and fresh fruits, saffron, pine nuts, cotton, precious and semi-precious stones, as well as beverages.
Officials from the chamber expressed hope that the expo will help expand trade relations between Afghanistan and countries in the region, particularly Uzbekistan.
Business
Afghani strengthens nearly 10% against US dollar amid banking sector reforms
The bank said it has expanded oversight of financial institutions and private lenders, improving transparency and promoting more consistent standards across the sector.
Afghanistan’s central bank, Da Afghanistan Bank, says the national currency has appreciated by 9.93% against the US dollar during the year 1404, citing steady progress in the country’s financial and banking systems.
Officials attributed the gains to cautious monetary policies that have helped stabilise the Afghani against major global currencies while also boosting its value against the dollar.
The bank said it has expanded oversight of financial institutions and private lenders, improving transparency and promoting more consistent standards across the sector.
As part of efforts to better manage liquidity, authorities also collected and destroyed worn-out banknotes in circulation. At the same time, officials reported growth in electronic banking, with digital payment usage rising in recent months.
Central bank spokesperson Haseebullah Noori said initiatives are underway to broaden access to banking services nationwide, including the wider rollout of Islamic banking options.
Analysts welcomed the stabilisation efforts but stressed the need to address ongoing challenges facing domestic banks, including the impact of international financial sanctions on Afghanistan.
They added that expanding Islamic banking could help draw more savings into the formal financial system, noting that a significant share of personal wealth remains outside banks. Bringing those funds into the sector, they said, could inject billions of Afghanis into the economy and further support financial stability.
Business
Uzbekistan delivers over 290 tons of aid to Afghanistan
The assistance, provided ahead of Eid al-Fitr, is intended to support vulnerable communities while reinforcing ties between the neighboring countries.
Uzbekistan has delivered more than 290 tons of humanitarian aid to Afghanistan, according to the country’s Ministry of Foreign Affairs.
The assistance, provided ahead of Eid al-Fitr, is intended to support vulnerable communities while reinforcing ties between the neighboring countries.
The shipment includes essential food supplies such as flour, rice, wheat, vegetable oil, instant meals, pasta, and confectionery. An official handover ceremony was held in the border town of Hairatan.
Local officials, including Balkh province representatives and authorities from Hairatan, expressed appreciation for the continued support, acknowledging Uzbekistan’s efforts to assist the Afghan people.
Among those present at the ceremony were Uzbekistan’s Ambassador to Afghanistan, Oybek Usmanov, and Surkhandarya regional governor Ulugbek Kosimov.
The aid delivery underscores Uzbekistan’s ongoing humanitarian engagement and its broader efforts to promote regional cooperation and stability.
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