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Economic Growth
ECONOMIC GROWTH SNAPSHOT
110 provincial staff received
training on administrative
and fiscal responsibilities
and 38 financial officers
were hired.
More than 45 training seminars
administered for over
830 Ministry of Finance employees
$428.8 million generated in
2005 surpassing the IMF
domestic revenue generation
goal
Reorganized five provincial
deed offices and registered
three million deeds.
35 provincial branches of
the Da Afghanistan bank
modernized, improving account
management, communications,
and automated
payment.
Economic Growth
Profile
(pdf - 125k)
CONTACTS
Mission Director
Robin Phillips
USAID/Kabul
6180 Kabul Place
Dulles, VA 20189-6180
Tel: 873-762-311955
Desk Officer
Caroline Brearley
Tel: (202) 712-0324
Email: cbrearley@usaid.gov
www.usaid.gov/afghanistan
Background
Afghanistan ranks 173 out of 178 countries on the UNDP Human Development
Index. Poverty is widespread and deeply entrenched after decades
of war and under-investment. As many as 90 percent of the
population is poor in some provinces. The average yearly income for Afghans
is $300 per person. Sustained economic growth is critical to address
not only poverty but also security and reconstruction.
Program Overview
USAID’s economic growth program assists the Government of Afghanistan
to develop sound economic governance and work with the private
sector to stimulate investment and business opportunities. The goal is for
Afghans to generate, maintain and administer public finances in transparent
and predictable ways. USAID aims to strengthen economic governance
in the public sector, establishing an environment that enables
the private sector to expand and produce jobs and income.
Fiscal Reform
USAID is supporting the Ministry of Finance (MoF) to create effective
administrative systems and taxation policies. These administrative reforms
are necessary to generate revenue for the Government of Afghanistan
helping the country move toward self reliance instead of
dependence on foreign aid. USAID administered 45 different training
seminars to 833 MoF staff and 110 provincial staff under the Mustofiat,
title deeds and tax collection office program. Programs aim to reform
provincial revenue offices and customs clearance procedures. As a result,
six customs houses including the Sher Khan Bandar site have been
completed and equipped. The development of a new customs code enabled
operations to generate $428.8 million from March 2005 to March
2006, helping surpass the International Monetary Fund’s revenue generation
goal for the country. Fiscal reforms aim to protect against misuse
of funds and stem corruption.
Central Bank Reform
USAID is supporting Da Afghanistan Bank (DAB) to build a sound financial
system. Developing the licensing process and new Banking Law has
allowed 13 private banks to be established, and promoted the restructuring
and eventual privatization of three state owned banks. USAID assisted
the bank to fulfill MoF requirements by consolidating government
accounts across all DAB provincial branches. This was accomplished
through regular transfers of government revenue to a single Treasury
account. USAID assisted 35 DAB provincial branches modernize, automate
payment, manage accounts, and develop communication systems
to improve branch operations.
Land Titliing
Property rights are a complex and challenging issue to address for all
Afghans including the 3.5 million refugees who returned after decades of
conflict. USAID is helping to resolve the matter of land rights to ensure
clear transfer and documentation of ownership for Afghan citizens in informal
settlements around Kabul. The program has completed aerial
mapping for two pilot districts in Kabul and renovated and reorganized
the land records in 16 registry offices throughout the country, representing
3.8 million, or 85% of all property records in Afghanistan.
Privatization of State-Owned Enterprises (SOE)
USAID supports privatization of state-owned companies to create a viable
market economy. This includes a rapid transfer of state-owned assets
to the private sector and the development of partnerships and
practices that serve as the foundation for a transparent, market-based
economy. Achievements include drafting changes to existing State
Owned Enterprise laws approved by the Government of Afghanistan as
well as the approval of liquidation and corporatization procedures by the
State Owned Enterprise Evaluation Committee that will expedite the divestiture
of enterprises from state ownership. Four SOEs have been
privatized, including Baghlan Sugar in May 2005 which sold at a sale
price of $18.8 million. There are16 SOEs slated to begin the restructuring,
privatization or liquidation process in 2006.
Strengthening Business Associations
USAID is strengthening business association networks and was instrumental
in supporting the newly formed Afghan International Chamber of
Commerce (AICC), while promoting provincial and local business associations,
and other civil society groups. These organizations foster discussions,
investment, and economic development. The program has
opened AICC branch offices in Kandahar, Mazar-e Sharif, Herat, and
Jalalabad. Within three months AICC will have branches in Konduz,
Bamiyan, and Khost. Support to the Afghan Women’s Business Federation
has consolidated 34 women-run business associations. Such associations
provide training and business development services increasing
opportunities and skills for women entrepreneurs.
Developing the Private Sector
USAID is stimulating the economy by creating access to capital activity
that will provide farmer credit, microfinance loans, small and medium
enterprise (SME) loans, and establish an investment fund. A separate
loan guarantee program, the First Loss Reserve Fund, offers participating
banks a $20,000 loan guarantee for each ex-combatant hired. The
Afghanistan Renewal Fund, the first venture capital fund in Afghanistan,
began operations in March 2006. This fund specifically targets small to
medium-sized enterprises with $500 to $5 million investments. A new
SME development activity will provide technical assistance in business
plan development, market research analysis, and market entry for new
businesses. Targeted assistance is being provided to help improve the
competitiveness of carpets, marble, dried fruits, and nuts to help these
emerging markets. These will be complemented by a significant access
to capital program to provide entrepreneurs, farmers and women with
capital for new and existing businesses of all sizes.
Implementing Partners
More Information
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