KABUL (SW) – Officials from the Afghanistan Chamber of Commerce and Investment state that despite the abundant investment opportunities in the country, international sanctions remain a significant obstacle to both domestic and foreign investments.
Khan Jan Alokozai, a board member of the chamber under the Islamic Emirate noted that alongside the sanctions, other challenges, such as a lack of energy resources have also made it increasingly difficult for domestic investors to retain their capital within Afghanistan.
This is despite the fact that lately, the head of the Iranian Chamber of Commerce and Industries has declared the strong interest of Afghan investors in investing in Iran.
“In the mining sector, many domestic investors are eager to invest in Afghanistan. There have even been commitments worth billions of afghanis in the electricity, railway, mining, and agriculture sectors and there are opportunities available. Foreign investors also come; however, the main problem lies in the political situation, international relations, and issues with the central bank. The insurance conditions for traders need to be improved, and we face energy shortages,” Mr. Alokozai stated.
He further mentioned that, the Islamic Emirate has taken several steps over the past three years to support domestic investment, such as reducing taxes by 50% for investors, increasing tariffs on imported goods, and ensuring security for businesses.
“Over the past three years, domestic and foreign investors have committed nearly $2 billion in various sectors, especially mining. Hundreds of companies have committed to investing in lead, iron, and cement,” Alokozai explained.
However, despite these efforts, much of the enthusiasm for investment has remained limited to mere commitments. Many investors have not yet taken significant action beyond expressing interest.
For some Afghan investors, the main barrier to investment is the ongoing challenges facing trade, which have led to a lack of motivation to invest in Afghanistan and a shift in focus toward other countries.
Qasem Elyasi, an investor who has committed over 3 million afghanis to a carpet manufacturing factory in Kabul, said: “We produce our own yarn and wool, but the main challenge is that the Torkham border has been closed for the recent months, preventing us from exporting our carpets. When goods cannot reach customers, it creates financial problems for us. There are no facilities for processing here. If production could take place locally, it would be much more beneficial for us. All of this contributes to our discouragement.”
Economic experts argue that to address the declining interest in investment, a special commission is needed to investigate and resolve the challenges facing investment in Afghanistan.
They said the government needs to establish a commission to invite investors and eliminate the obstacles hindering trade that would encourage more foreign investment in Afghanistan. According to them, developing investment laws and simplifying the investment process would greatly boost investments.
There are at least 20 foreign investment applications, mostly from Afghan investors, currently under review.
