Why invest in Afghanistan?
Three good reasons:
- 1. Afghanistan is an emerging market of strategic importance close to some of the largest and fastest-growing markets in the world.
Afghanistan is strategically located between the energy-rich republics of Central Asia and the major seaports in South Asia providing a key transit route for Central Asian oil and gas to markets in South Asia as well as overseas. Also Afghanistan has natural access to markets of neighboring countries including China, India and Pakistan.
- 2. Afghanistan offers a pro-business minded environment with legislation favorable to private investments.
The principles of a market economy are incorporated in the Constitution of Afghanistan. Considering the National Development Strategy, the growth of the private sector is a cornerstone of Afghan politics. Consequently President Hamid Karzai as well as the government has focused intensely on removing obstacles to private sector development.
- 3. Afghanistan is rich in natural resources.
In Afghanistan there are currently more than 1.400 identified mineral deposits. These include energy minerals such as oil, gas and coal as well as iron and copper deposits of world quality. Furthermore, the country has been blessed with a great variety of precious and semi-precious stones, including emerald, jade, amethyst, alabaster, berylo, lapsis, lazuli, tourmaline, ruby, quartz and sapphire. Following the national privatization programme most of the major state-owned enterprises have been slated for international tender, which has made the entry into all these sectors easier.
Afghanistan Investment Priority Sectors
- 1. 1. Agriculture
Agriculture remains fundamental to the livelihood in Afghanistan, generating one third of the country’s GDP and supporting nearly 80 per cent of its people. The climate of Afghanistan is well suited for the cultivation of horticultural crops. That’s why, the country is the origin of many high-end crops like raisins, pomegranates, pistachios and almonds. One industry related to the agricultural sector is packaging, which provides great opportunities for investors. Although demand for Afghan agricultural goods is high, current packaging procedures are outdated and prevent trade and commerce. Processing is another great investment opportunity. Due to the growing markets for fruits and vegetables, the potential for processed agricultural products is enormous, including snack foods, fruit concentrates as well as fresh fruit jams.
- 1. 2. Construction Materials
Creating a competitive national construction industry is a prerequisite for the reconstruction of Afghanistan. Currently, the sector is one of the fastest growing in the country. That’s why, the demand for construction materials is rising rapidly in Afghanistan, making the market more attractive for foreign investors. For example, urban planners and government officials develop a new urban area in the north of Kabul which will be home to estimated 1.5 million people.
1. 3. Telecommunication
Core telecommunication service providers supply the Afghan market already in a sufficient manner with increased competition and price pressures. While there are still opportunities for mobile service providers, the other supply and service areas of the telecommunication sector represent a far more virgin market. Examples are: Data processing, basic business-processing operations, information and communication technologies, data transfer, process control and call centers.
- 4. Transport and Logistics
Afghanistan shares borders with six neighbors – Iran, Turkmenistan, Uzbekistan, Tajikistan, China and Pakistan – and is considered as a land bridge connecting emerging markets in Middle East, Central and Southern Asia. The country’s large and growing market for transportation and logistics services presents a ground floor opportunity for new providers. Early investors report modest start-up costs and low overheads, and even smaller operators are moving large volumes of freight. Investments in the transportation and logistics sector are vital to the overall economic development, as it will enable the transportation and distribution of products throughout the country and to overseas destinations.
source: www.acci.org.af