Businessmen have said the current state of “confusion” is deterring investors.
‘Complex’ Peace Talks Impacting Economy: ACCI
The Afghanistan Chamber of Commerce and Industries (ACCI) and businessmen on Sunday said that the complexities around the peace negotiation process has already had a negative impact on Afghanistan’s economic growth and investment arena.
“In view of the current situation, investors are not interested in investing,” said Mohammad Younus Momand, deputy head of ACCI.
Sayed Sultan Hussain, a car dealer in Kabul, who started his business ten years ago, said his business did well until recently. He said very few people are now buying cars.
“People are now in a state of confusion, because no one is willing to invest. They can’t import cars from abroad. Major investors and wealthy people have left and have invested abroad,” he said.
“The investors look very concerned, they don’t know what the situation in Afghanistan will be. There is no assurance for the people from government’s side nor the US about what will happen. People have invested and now they are very concerned,” said Momand.
According to some investors, they were hoping over $1 billion would be invested in Afghanistan annually, but last year, only $400 million was invested in the country.
“The current situation is very confusing, there is no hope that things will improve in one month or in one year,” said Ghulam Hussain, a Kabul resident.
Last year, the World Bank said in a report that Afghanistan’s economic recovery was slow and put it down to continued insecurity.
In addition, agricultural growth has been constrained by unfavorable weather conditions and while the fiscal position has remained strong, driven by improvements in revenue performance, the government remains heavily reliant on donor grants.
Poverty also increased amid the slow growth and services were disrupted due to security problems.
Economic experts say that uncertainty around the political and economic future of the country and the fragile security situation have discouraged foreign investors.