Connect with us

Business

IMF, Afghanistan reach preliminary agreement over Extended Credit Facility

Published

on

The International Monetary Fund (IMF) and the Afghanistan authorities have reached a preliminary agreement on an economic reform program to be supported by a new three-and-half year US$364 million Extended Credit Facility (ECF).

This announcement comes just three months before the United Nations’ donor pledging conference for Afghanistan gets underway.  

In a statement issued by the IMF on Friday, the fund said the ECF will help mitigate the economic impact of the Covid-19 pandemic, maintain macroeconomic stability, and underpin reforms for economic resilience and good governance.

The fund also stated that continued financial assistance from international partners is critical to support objectives of Afghanistan’s National Peace and Development Framework for 2021-25, including inclusive growth, poverty reduction, and self-reliance.

Leading the IMF’s team was Azim Sadikov, and virtual discussions were held with Afghan officials through July and August on the country’s economic reform program. 

Sadikov said however that the agreement is subject to the approval of the IMF’s Executive Board, which would possibly consider the agreement in October after preliminary conditions have been met by Afghan authorities, including the improvement of accountability and transparency in procurement processes. 

“The new ECF arrangement will support authorities’ reform program to maintain macroeconomic stability and lay the ground for a sustained post-pandemic economic recovery while continuing to advance structural reforms,” Sadikov said. 

He said the reform program aims to gradually reverse the fiscal decline due to the pandemic and instead create space for development sending while increasing self-reliance. 

He stated improvements in customs collections and revenue administration need to be improved and the planned Value Added Tax (VAT) process needs to be implemented in 2022. 

“Monetary policy will continue to focus on maintaining price stability and a flexible exchange rate regime, while fostering confidence in the Afghani,” Sadikov said.

 He also said that reforms, in accordance with the new ECF arrangement, will focus on addressing issues that hamper economic growth and resilience. 

“To that end, the program will aim to improve fiscal governance, strengthen the anti-corruption regime, and bolster the financial sector,” he said. 

“Bolstering the financial sector, including by completing the reform of state-owned banks, will also be important to boost its capacity to contribute to growth.

 “Coming before the November pledging conference, the ECF arrangement is expected to catalyze donor financing, which is critical to support Afghanistan’s reform and development objectives under the multi-year National Peace and Development Framework,” he said. 

 The pledging conference is organized every four years and was last held in 2016 in Brussels. 

This year, Finland will host the conference, which will be organized by both the UN and Afghanistan. 

Previous international financial commitments largely end by December of this year.

Business

Russia almost doubles LPG exports to Central Asia, Afghanistan this year

Published

on

Russia has almost doubled exports of liquefied petroleum gas in the January – November period to ex-Soviet republics in Central Asia and Afghanistan to 1.016 million metric tons, Reuters reported citing sources on Friday.

Moscow has had to divert supplies of LPG, or propane and butane, from Europe, which introduced restrictions on LPG imports from Russia in December 2024 over the war in Ukraine.

Traders said supplies to Afghanistan, as well as to Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan now account for around 36% of Russia’s total LPG exports, up from 19% in 2024.

Afghanistan is Russia’s largest buyer of LPG in that region. In July, Russia accepted the credentials of a new ambassador of Afghanistan, making it the first nation to recognise the country’s Islamic Emirate government.

According to the sources, supplies of Russia’s LPG to the country, including from Kazrosgaz, a joint venture with Kazakhstan, have jumped 1.5 times in the first 11 months of the year to 418,000 tons.

Traders said that Russia’s LPG supplies to Afghanistan have increased partially at the expense of declining supplies from Iran, which has been sanctioned by the United States.

Continue Reading

Business

Major power projects launched in Herat

Baradar urged contracting companies and technical teams to complete the projects with high quality and within the specified timeframe.

Published

on

Mullah Abdul Ghani Baradar, Deputy Prime Minister for Economic Affairs, on Thursday announced the launch of four major electricity projects and the inauguration of five others in Herat province, with a total investment valued at 3.98 billion afghanis.

Speaking at an official ceremony, Baradar described the projects as vital for Afghanistan’s industrial and economic development. He said that once completed, the projects will provide 24/7 electricity to all industrial parks in Herat, as well as to commercial centers, rural areas, and residential neighborhoods, ensuring stable and reliable power supply.

Baradar also pledged incentives for investors in cold storage facilities, announcing a five-year tax exemption and guaranteeing uninterrupted electricity supply by Afghanistan’s power utility. He encouraged both domestic and foreign investors to take advantage of these opportunities.

Emphasizing the Islamic Emirate’s balanced foreign policy, Baradar said the government’s main focus remains economic growth, security stability, and good governance, urging the international community to pursue engagement with Afghanistan instead of restrictive policies.

Among the projects inaugurated is a 130-kilometer-long 220-kilovolt power transmission line from Turkmenistan, along with the construction of four substations in the districts of Karukh, Pashtun Zarghun, Obey, and Chesht-e-Sharif, which will supply electricity to around 40,000 households.

Newly launched projects include the construction of the Pul-e-Hashemi substation, expansion of the 24 Hoot Martyrs substation, creation of a second line at the Noor-ul-Jihad substation, and the extension of power transmission lines linking the Pul-e-Hashemi, Noor-ul-Jihad, and 24 Hoot Martyrs substations.

Baradar urged contracting companies and technical teams to complete the projects with high quality and within the specified timeframe.

Continue Reading

Business

Sharp drop in exports to Afghanistan drives Pakistan’s trade deficit surge

Meanwhile, Afghanistan is actively seeking alternative trade routes and partnerships to reduce future reliance on Pakistan’s commercial channels and strengthen its economic independence.

Published

on

Pakistan trade

Recent data from Pakistan’s central bank reveals that a sharp decline in exports to Afghanistan has become a key factor behind the country’s growing trade deficit, challenging previous claims by Pakistani officials that halting trade with Afghanistan would not harm their economy.

According to the State Bank of Pakistan, the trade deficit with nine neighboring countries increased by more than 39 percent in the first five months of the 2025–2026 fiscal year, rising from $4.4 billion to $6.2 billion. The report highlights that reduced exports to countries such as China and Afghanistan played a central role in this increase.

Exports from Pakistan to Afghanistan fell dramatically by over 94 percent during this period, dropping from $408 million last year to approximately $210 million. Economic analysts note that Afghanistan has historically been one of Pakistan’s key export markets, particularly for food items, cement, medicine, and daily-use goods—products that cannot be easily replaced.

The steep decline follows the complete suspension of trade between the two countries in October 2025. Despite previous statements by Pakistani officials asserting that reduced or halted trade with Afghanistan would not negatively impact Pakistan’s economy, the latest figures suggest otherwise.

Meanwhile, Afghanistan is actively seeking alternative trade routes and partnerships to reduce future reliance on Pakistan’s commercial channels and strengthen its economic independence.

Continue Reading
Advertisement
Advertisement
Advertisement
Advertisement

Trending

Copyright © 2025 Ariana News. All rights reserved!