Business
Afghanistan’s GDP to expand by 3% in 2021: ADB
The Asian Development Bank (ADB) forecasts that Afghanistan’s gross domestic product GDP growth will increase by 3% in 2021 and 4% in 2022 after the normalization of business activity and market sentiment.
In its Asian Development Outlook (ADO) 2021 released on Wednesday, the ADB stated that Afghanistan’s economic growth is expected to recover this year and accelerate next year after a sharp decline in 2020 from the coronavirus disease (COVID-19) pandemic and continued violence and instability.
“Afghanistan’s economy experienced unprecedented disruption in 2020 due to COVID-19 pandemic, political instability and continued violence, which cut remittances, trade, and revenue,” said ADB Country Director for Afghanistan Narendra Singru.
“With a successful COVID-19 vaccine rollout and post-pandemic recovery, the country should be on track to achieve economic growth this year and in 2022 as business activity and market sentiment normalize,” Singru said.
According to the report, inflation more than doubled from 2.3% in 2019 to 5.6% in 2020 driven by higher food prices. Food price inflation in 2020 was estimated at 10% with the highest spike recorded in April when border closure and panic buying propelled it to 16.6%. Inflation is projected to moderate to 5.0% in 2021 and 4.0% in 2022 as food supplies improve.
However, risks remain, including implementing vaccinations in remote and insecure areas, conflict, criminality, corruption, political instability, and broader social fragility. If unaddressed, these could weigh heavily on the economy and impede recovery.
“Supporting the recovery of micro, small, and medium-sized enterprises (MSMEs) hard hit by the pandemic is pivotal to safeguarding workers’ incomes and livelihoods, according to the report. Before the pandemic, MSMEs were estimated to provide nearly 1.6 million service and industry jobs. The government approved a 2-year support package worth $295 million in October 2020 to improve business conditions and implemented countercyclical measures that include support for MSMEs,” the report read.
The ADB suggests that Afghanistan should facilitate MSME access to markets by developing infrastructure, improving security, combating corruption, simplifying regulation, strengthening property rights and contract enforcement, and promoting innovation and better labor skills in order to improve the business environment.
“Increasing access to credit and further expanding the formal bank sector is also crucial,” the organization said.
“ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region,” the report concluded.
State-owned corporation Spinzar has dispatched 150 tons of dried tomatoes in the first such consignment to Europe, officials announced Sunday.
“This is a great achievement of the Islamic Emirate which exports vegetables from Afghanistan to European countries,” Abdul Hamid Akhundzada, head of the company said as quoted in a statement issued by the Ministry of Finance.
Spinzar company resumed operations around a year ago after decades of closure.
It also produces and processes cotton, cottonseed oil, sesame and tissue paper.
A bilateral meeting between members of the private sectors of Afghanistan and Kazakhstan was held in cooperation with the Ministry of Industry and Trade on Tuesday with the aim of attracting more investment in the country.
At the meeting, representatives of the private sector of the two countries discussed investments in various sectors including the non-alcoholic beverages sector, gemstones stones and minerals, chemical fertilizers, car batteries, clothing and textiles, petroleum products, flour and wheat, the ministry said.
They also discussed tourism, investment in restaurant businesses and food, the ministry added.
Furthermore, the businessmen and investors of Kazakhstan thanked the Afghans for their hospitality and described Afghanistan as a safe place and a suitable environment for business and investment.
Representatives of the private sector of Kazakhstan spoke about holding exhibitions in Kabul, Balkh and Kandahar provinces, adding that in the near future they plan to hold exhibitions of Afghan manufacturing industries in Kazakhstan and an exhibition of Kazakh products in Afghanistan.
A number of female entrepreneurs at the special women’s market in Kabul say their businesses are improving day-by-day and that they have also set up online shopping opportunities for women.
These women say they are happy to have their own market where they can sell their own goods.
“Our clothes are Afghani Gand (traditional dress). Our sellers and buyers are both women. We are happy that such a market has been established in Kabul,” said Ferozah Qasimi, a woman entrepreneur.
“The good thing about this market for women and girls is that they can easily and calmly use the green space here, relax their minds and buy the things they need from one place,” said another woman entrepreneur.
“My request to government and foreign institutions is to join hands with us, to cooperate with us so that we can make further progress in our work,” said another businesswoman.
Meanwhile, the Women’s Chamber of Commerce says there is no limit to women entrepreneurs.
“We are seeing very good developments in this chamber which is creating markets and creating expos,” said Salma Yousafzai, head of the Women’s Chamber of Commerce.
The Ministry of Industry and Commerce (MoIC) spokesperson Abdulsalam Jawad Akhundzada stated that the ministry supports businesswomen.
“The Ministry of Industry and Commerce has always supported women entrepreneurs and has always supported them in all aspects of trade and industry,” said Akhundzada.
“Thousands of women in 34 provinces of Afghanistan are actually working in various sectors of industry and investment,” he added.
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