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Afghan banks to finance Herat–Mazar railway project

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Afghanistan’s central bank has announced that commercial banks will participate in financing the planned Herat–Mazar-e-Sharif railway project, a major infrastructure initiative estimated to cost nearly 55 billion afghanis ($780 million).

The announcement came during a joint meeting between officials from Da Afghanistan Bank, the Ministry of Finance and representatives of commercial banks, chaired by First Deputy Governor of Da Afghanistan Bank, Sediqullah Khalid.

According to the central bank, a financing mechanism for national development projects has recently been finalized in coordination with the Economic Deputy Office of the Prime Minister and the Ministry of Finance, creating a framework for commercial banks to invest directly in large-scale infrastructure projects.

Khalid said the banking sector could play a significant role in strengthening the national economy and accelerating the implementation of development projects through domestic investment.

He noted that discussions during the meeting focused on the Herat–Mazar-e-Sharif railway project, which is expected to stretch 657 kilometers across Afghanistan. The project is intended to boost economic growth, expand trade links and improve regional connectivity.

Khalid also said improved security conditions in the country have created a favorable environment for implementing major infrastructure projects, adding that the central bank would provide the necessary support and facilities to encourage private-sector participation.

Representatives of commercial banks expressed readiness to invest in the railway project, describing participation in national development initiatives as both an opportunity and a responsibility to contribute to Afghanistan’s economic growth.

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Mango growers suffer heavy losses as exports fall and climate takes its toll

Last year, Pakistan exported about 109,600 tonnes of mangoes, with Afghanistan accounting for 22,500 tonnes, or more than 20% of total exports.

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Pakistan’s mango industry is facing one of its toughest seasons, with farmers suffering heavy financial losses due to declining exports and worsening climate conditions.

A major factor has been the sharp fall in exports caused by geopolitical tensions, particularly the prolonged closure of the Pakistan-Afghanistan frontier. Afghanistan has traditionally been one of Pakistan’s largest markets for fresh produce because of its proximity, minimal sanitary requirements and role as a gateway to Central Asia.

Last year, Pakistan exported about 109,600 tonnes of mangoes, with Afghanistan accounting for 22,500 tonnes, or more than 20% of total exports. The previous season, exports to Afghanistan reached 28,700 tonnes. This year, however, Pakistan has exported no mangoes to Afghanistan despite shipping fruit to markets around the world.

The conflict in Iran has also disrupted exports to Gulf countries by affecting shipping routes, reducing vessel availability and increasing freight costs. As a result, exports to the United Arab Emirates—Pakistan’s largest mango market—have fallen sharply. Although shipments to Iran and Oman have risen, they have not offset losses elsewhere. By July 6, Pakistan had exported just 42,343 tonnes of mangoes, compared with 55,684 tonnes during the same period last year.

Climate change has further compounded growers’ problems. Erratic rainfall, prolonged heatwaves, rising temperatures and damaging windstorms during flowering and fruit development have reduced yields and fruit quality.

The changing climate has also increased pest and disease outbreaks. Mango malformation disease caused widespread damage in Sindh, while growers spent heavily on pesticides and fungicides with limited success. As a result, lower-quality B- and C-grade fruit make up a much larger share of this year’s crop than premium A-grade mangoes.

Some experts estimate climate-related stresses have cut production by 20 to 30 percent this season. Farmers now face lower yields, poorer quality fruit, rising production costs and weak market demand.

Growers in Sindh say low export volumes and falling prices have left many unable to recover even their production costs, raising concerns about the long-term viability of mango farming.

Domestic demand has also weakened as rising inflation and falling purchasing power make premium fruits increasingly unaffordable for many households.

The decline is reflected in the shrinking area under fruit cultivation, which fell from 0.80 million hectares in FY2013 to 0.69 million hectares in FY2024. Many farmers are replacing long-term orchards with annual crops that provide quicker and more reliable returns.

Experts say Pakistan must invest in climate-resilient fruit varieties, modern orchard management, value-added processing and diversified export markets if its horticulture sector is to remain competitive in the face of climate change and shifting global trade conditions.

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IEA announces 50% tax cut across four tax categories

During the meeting, officials of the Islamic Emirate also announced that new investors will be exempt from paying taxes for five years.

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The Islamic Emirate of Afghanistan (IEA) has announced a 50 percent reduction in taxes for eligible taxpayers under a decree issued by the Supreme Leader, with the measure applying to four categories of taxes.

Speaking at a conference in Kabul on Sunday, Administrative Deputy Prime Minister Abdul Salam Hanafi said the reduction is intended to ease the burden on taxpayers. He also instructed tax collection officials to treat taxpayers in accordance with Islamic principles and uphold appropriate conduct throughout the tax collection process.

Hanafi said the tax reduction applies to legal entities, natural persons, property transfers and petroleum products, with taxes in these categories reduced by 50 percent.

Meanwhile, Finance Minister Mohammad Naser Akhund said the government would address the concerns and challenges facing taxpayers. He stressed that tax revenues would be used to support the country’s economic development and finance public programmes.

At the same event, Minister of Commerce and Industry Nooruddin Azizi said the objective of the tax reduction is to strengthen the national economy. He urged taxpayers to conduct their economic activities transparently and added that, following the suspension of trade with Pakistan, licenses had been issued to 100 pharmaceutical and medical equipment manufacturing companies.

Officials from the Afghanistan Chamber of Commerce and Investment (ACCI) also said the tax reduction would ease the financial burden on economic actors and create conditions for increased investment. The chamber’s head, Sayed Karim Hashemi, said the measure would not only support investors but also contribute to the country’s economic growth and recovery.

During the meeting, officials of the Islamic Emirate also announced that new investors will be exempt from paying taxes for five years. They added that Afghanistan has now achieved self-sufficiency in the production of 300 different goods.

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Afghanistan and China sign trade cooperation agreement

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The Afghanistan Chamber of Commerce and Investment (ACCI) and the Qingdao International Exhibition Center of China have signed a memorandum of understanding (MoU) to expand trade cooperation and organize joint exhibitions and business meetings.

The MoU was signed on the sidelines of the International Manufacturing Machinery Exhibition in the presence of officials from the Afghanistan Chamber of Commerce and Investment and a number of Afghan traders.

Under the agreement, Chinese manufacturers and traders, particularly producers of industrial machinery, will participate in the Fifth National and International Imam Abu Hanifa Exhibition, where they will showcase their latest machinery and equipment to promote their products and expand economic cooperation with Afghanistan.

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