UNDP Report Highlights Private Sector's Role in Afghanistan's Economy Amid Challenges

The United Nations Development Programme (UNDP) in Afghanistan has highlighted the private sector's key role in the country's economic growth in a new report.

The report notes that the sector faces significant challenges, including bureaucracy, limited access to formal financial resources, high transportation costs, and weak infrastructure, particularly in the energy sector. It states that only 6 percent of Afghanistan's population has a bank account, with most financial transactions occurring through informal systems. Both domestic and foreign investors are affected by administrative complexities, unclear guidelines for issuing licenses, tax payments, and arbitrary implementation of laws, which have discouraged investment.

Abdul Basir Taraki, an economic analyst, said: “We are facing many challenges in the banking sector, and because of this, we are forced to transfer money from one country to another. At present, we transfer money through TT, which is very problematic for us.”

Qutbuddin Yaqoubi, another economic analyst, said: “The lack of strong infrastructure for long-term stability, the absence of an organized banking system, and the presence of economic sanctions have caused the private sector to be unable to carry out its activities effectively, and as a result, this sector faces problems in trade and transactions.”

Economic experts believe that greater facilitation for investors could enable the private sector to reduce unemployment and strengthen the economy.

Abdul Latif Nazari, Professional Deputy Minister of Economy, said: “Currently, the necessary facilities and the creation of a secure environment to strengthen the private sector have been considered, and therefore the role of the private sector in attracting investment is also very important.” He added that the Islamic Emirate’s policy supports the private sector, with efforts underway to expand its activities.

The UNDP representative in Afghanistan described the private sector as a lifeline for millions of Afghans, stressing that with proper investment, targeted incentives, and an inclusive environment including women, it could drive economic resilience, job creation, and long-term stability.