Foodstuff and plastic ware are no longer on the list of imports. Domestic production grew by 3 percent in 2016.
Afghanistan has become self sufficient in between 16 and 21 items including detergents and pipes, according to a Killid investigation. The Chamber of Commerce & Industries says some 1,200 companies are in manufacturing.
Central Statistics Organisation figures reveal that compared to the first nine months of the 2015 solar year, domestic production grew 3 to 4 percent in 1395 (2016).
Musafer Quqandi, the spokesperson for the Ministry of Commerce and Industries, is optimistic. “An amount of 1.7 billion USD investment took place in 2016 and is showing one and a half times increase over the previous year.”
The rise in domestic production, particularly of agricultural products, reflects in the increase in annual export figures. According to Quqandi, exports have been “between 20 and 30 percent every year since 2012”. Farm produce from Afghanistan is being sold to markets in Pakistan and India.
Biscuits, seasonal fruits and vegetables, fizzy drinks, juices, plastic shoes, detergents and pipes are no longer on the list of imports. But self-sufficiency is still only at 13 percent of the country’s needs, says Abdul Jabar Sapai, deputy head of the industrialists union.
The commerce ministry thinks the government’s efforts at public-private partnerships have paid off. Moreover, high taxes on exports have also benefited local produce and goods. To boost domestic manufacture, tax on raw materials was brought down from 8 to 1 percent. According to Quqandi, the spokesperson for the ministry, since it joined the World Trade Organisation, Afghanistan has had to provide facilities to investors and support the investment, which has paid off with growth in trade in 2016.
What are industry’s problems?
Sapai from the industrialists union told Killid that President Ashraf Ghani has failed to keep his poll pledge of land and electricity for industry. Also, the government has failed to ensure security. “The government should encourage traders so that local products develop and the external products are replaced by local products,” Sapai says.
Najibullah, sales manager in Pamir Cola, which makes soft drinks among other things, identifies lack of security and corruption in government offices as serious obstacles to economic growth. “When we submit an application even for a small project to a government office, they make illegal demands. The government is also not able to stop smuggling of goods that compete with ours in the market,” he says.
However, spokesperson Quqandi insists the government is helping the private sector. “We have created many facilities for manufacturing companies in the country. We have given them land in some areas; we have solved their electricity problem to some extent; we have lowered the tax on raw materials that are coming to Afghanistan from 8 to 1 percent. All of this has helped domestic companies develop more,” he says.
Omed Bahar has a fruit-processing unit that has a capacity to produce one million cans of juice daily. The machines were imported from China, and with abundant freshly grown fruit in the country including apples, pomegranates, apricots and peaches, business was good until countries importing from Afghanistan raised custom duties.
“Earlier we used to export the juice to neighbouring countries but now they have raised tariffs and we cannot export our juice,” Bahar told Killid. He urges the government to assist entrepreneurs like him who face obstacles of land, water and electricity shortages.
A shopkeeper in Kabul’s Mandawi area who sells local products including juices says the quality here is far superior to the imports. “Customers are very happy,” he says.
