Investment Climate Reform Program

  • Duration: March 2015 – March 2019
  • Value: $13.3 million

OVERVIEW

The United States Agency for International Development’s (USAID) Investment Climate Reform program supports the Afghan Government’s efforts to improve Afghanistan’s investment climate by implementing business enabling reforms that will make the country economically competitive, both regionally and globally. The program, implemented by the International Finance Corporation/World Bank Group (IFC/WBG), provides help in a number of reforms, such as special industrial licensing, construction permitting, and other areas associated with the World Bank’s “Doing Business” indicators in Afghanistan.

This program complements and builds upon a $2.5 million existing USAID-funded activity launched in 2011 with the IFC/WBG that supports construction permitting reform in Kabul Municipality and other regulatory reforms within the context of the Doing Business indicators.

ACTIVITIES

  • Conduct a subnational “Doing Business” study on commercial regulations from the perspective of small-to medium-size domestic enterprises across five cities in Afghanistan: Kabul, Herat, Jalalabad, Kandahar and Mazar-i-Sharif.
  • Develop, based on the study, recommendations to the central and local government authorities on improving public processes in four regulatory areas: starting a business, dealing with construction permits, getting electricity, and registering property.
  • Improve the process of issuing construction permits for commercial and residential buildings for Kabul Municipality to stimulate investment, promote transparency, improve building safety, and reduce illegal construction.
  • Develop an automated system for construction permits, and to train municipal staff on how to manage the system.
  • Roll out an improved system of construction permitting and the automated system in four provincial areas.
  • Promote increased and improved dialogue between public and private sector stakeholders in the construction sector.

ACCOMPLISHMENTS UNDER EXISTING ACTIVITIES

  • Facilitated introduction of a new fee schedule for small- and medium-sized enterprises by the Afghan Investment Support Agency, enabling these enterprises to better forecast and manage their budgets.
  • Supported implementation of an electronic collateral registry to enable entrepreneurs and small business owners to leverage their assets and strengthen their capacities to access credit.
  • Reduced average time to obtain residential and construction permits from eight to five months in Kabul municipality thereby improving market efficiencies and promoting transparency.

Last updated: December 15, 2015

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