The World Bank has reported that Afghanistan’s exports from January 1 to September 1, 2024, decreased by 14% compared to the same period last year. The report attributes this decline to changes in Pakistan’s trade policies and an increase in taxes on Afghanistan’s fresh fruits and agricultural products. According to the World Bank, Afghanistan’s exports reached over $920 million by September 1, 2024. The report also highlights that Afghanistan continues to face significant challenges, including weak human capital, high unemployment, widespread poverty, and food insecurity. Additionally, it points out that demand does not align with supply. Despite these challenges, Pakistan remains Afghanistan’s largest export market, followed by India as the second-largest market, and Iran remains the largest source of imports. However, economic experts note that except for fresh and dried fruits and natural plants, Afghanistan’s other industrial products lack competitive power. Their prices are also higher than regional costs due to high electricity prices and inadequate infrastructure. According to these experts, most of Afghanistan’s exports consist of raw minerals, a sector that has declined due to changing regional market needs.
The World Bank’s report also indicates that Afghanistan’s economy showed some signs of recovery in 2023–2024 after two consecutive years of severe contraction. However, the country still faces major challenges, including weak human capital, high unemployment, widespread poverty, and food insecurity. The World Bank warns that these issues could harm the country’s economy and social structure in the long run. The report also highlights that restrictions on women’s education and their socio-economic inclusion, including the Taliban’s “Ministry for the Propagation of Virtue and Prevention of Vice” law, pose serious barriers to future progress.
The report notes that in August 2024, the Consumer Price Index (CPI) decreased by 6.7% compared to the same period last year, a similar drop to the previous month. This decline is primarily due to an 11.5% drop in food prices and a 1.8% decrease in the prices of non-food goods.
According to the report, the prices of food items like bread, vegetables, sugar, and sweets saw significant reductions, attributed to improvements in supply chains, though demand has not aligned with these changes. The report also states that non-food items, such as clothing and household goods, have become cheaper, contributing to the continued decrease in inflation.
The World Bank notes that trade barriers, including increased tariffs by Pakistan, border closures, and anti-smuggling measures, have disrupted Afghanistan’s exports, resulting in an oversupply and a sharp drop in local food prices. Additionally, the decline in global food and energy prices also contributed to this price reduction. Core inflation, which excludes volatile food and energy prices, decreased by 1.4% compared to last year, indicating that demand still does not match supply.
The World Bank reports that from January to August 2024, Afghanistan’s total exports sharply dropped to $920.5 million, reflecting a 14% decrease compared to the same period in 2023. The report explains that the Pakistani government switched its coal power plants to use domestic coal and removed customs exemptions for Afghanistan’s fresh and dried fruits. Frequent border tensions have contributed to this situation.
According to the report, the Temporary Admission Document (TAD), created in March, has increased traders’ frustrations and led to trade sanctions. As a result, Afghanistan’s coal exports fell by 71%, from $209 million to $61 million, mainly due to a 23% drop in exports to Pakistan, which accounts for 30% of Afghanistan’s food exports. Exports to India, which accounts for 45% of Afghanistan’s food exports, also decreased by 6%.
The report further notes that despite the decline in food and coal exports, these products still account for 70% of Afghanistan’s total exports, down from 80% in the same period in 2023.
The World Bank also reports that Pakistan remains Afghanistan’s largest export market, accounting for 46% of total exports, followed by India with 28%. The report states that since last September, Iran, Kazakhstan, and Uzbekistan have each become growing markets for Afghanistan’s exports, each holding about 4% of the share, as trade routes have shifted due to frequent border closures with Pakistan, though the overall decline in exports persists.
The report states that from January to August 2024, Afghanistan’s imports reached $6.5 billion, an increase of 28% compared to the same period in 2023. Mineral imports, which constitute 21% of total imports, rose by 29%, reaching $1.4 billion. Food imports, accounting for 19% of total imports, increased by 18%, reaching $1.2 billion. In contrast, textile imports, which represent 7% of total imports, dropped by 12%, reaching $452 million.
The report indicates that imports of transportation-related goods increased by 80%, chemical products by 46%, and machinery and equipment by 45% compared to last year. This trend suggests that Afghanistan’s manufacturing sector is growing, which could potentially lead to industrial growth in the future.
The World Bank further states that Iran has become Afghanistan’s largest source of imports, accounting for 30% of total imports, and 79% of the annual increase in imports during the first eight months of 2024. This increase is largely due to Afghanistan redirecting its trade routes through Iran after Pakistan imposed border restrictions. Other key import sources include the United Arab Emirates (21%), Pakistan (15%), and China (7%).
Meanwhile, Naqibullah Safi, the executive director of the Pakistan-Afghanistan Joint Chamber of Commerce & Industry (PAJCCI), says the World Bank report might reflect discrepancies between the Gregorian and Solar Hijri years, as, according to him, the Taliban regime follows the Solar Hijri calendar while the World Bank uses the Gregorian calendar. This difference could lead to discrepancies in data and reports.
Mr. Safi adds that Pakistan closed the Torkham border for two months this year, contributing to the reduction in exports. He explains that the closure halted shipments of fresh fruits and vegetables, but Afghanistan’s exports to Central Asian countries and those near Central Asia have increased. He further notes that although exports have declined compared to last year, this decrease is not a major concern. He emphasizes that the reduction in exports is not solely due to Pakistan’s restrictions, as exports to India, which also pass through the Torkham border, have also been negatively affected by these closures.
Azarakhsh Hafezi, a board member of the Afghanistan Chamber of Commerce and Investment (ACCI) and a member of the board of the Federation of Chambers of Commerce, Industry, Mines, and Agriculture of Afghanistan, told the Hasht-e Subh Daily that the World Bank report aligns with the documents from the ACCI’s export department. He states that the decrease in exports is due to Afghanistan’s raw minerals being based on preferential production and lacking competitiveness in export markets. He emphasizes that real exports are based on added value created within the country during production, which is then sold in regional and global markets with competitive prices and quality. However, Afghanistan’s products do not meet the required standards for quality, price, and competitive strength.
Mr. Hafezi adds that, except for Afghanistan’s fresh and dried fruits and natural plants, other industrial products lack high competitive power. Their prices are higher than regional prices due to high electricity costs and inadequate infrastructure. He stresses that for exports to increase and improve, Afghanistan needs mass production, preferential production, and competitive exports, which it currently lacks. He explains that the high level of exports in previous years was due to the strong demand for Afghanistan’s coal, which is now supplied by Pakistan via sea routes from Australia and other countries due to the lack of proper roads, resulting in the decline in exports.
Meanwhile, the Taliban’s Statistics and Information Department has reported that in the month of Miizan of the current Solar year, Afghanistan conducted trade worth $1.4 billion with various countries, of which $234 million was from Afghanistan’s exports.
You can read the Persian version of this daily report here:
گزارش بانک جهانی؛ بیکاری و فقر گسترده همچنان افغانستان را تهدید میکند | روزنامه ۸صبح
