Afghanistan consistently ranks low across a range of indices measuring the investment climate and business environment. To help address the underlying causes and promote investment, growth and jobs, USAID supports activities with the International Finance Corporation/World Bank Group (IFC/WBG).
USAID is launching a new Investment Climate Reform Program. The $13.3 million program, which runs from March 2015 to March 2019, aims to improve Afghanistan’s investment climate at the national and sub-national levels by stimulating growth to make the country more competitive. The WBG Trade & Competitiveness Global Practice will execute the program. It will support a number of IFC activities such as Afghanistan Licensing Reform, Afghanistan Construction Permitting Reform, Subnational Doing Business, Special Industrial Licensing, and Afghanistan Doing Business Indicator Based Reforms.
This program continues and builds upon $2.5 million of existing USAID-funded activities that launched in 2011 with the IFC/WBG that support construction permitting reform in Kabul and regulatory reform within the context of the WBG’s “Doing Business” indicators.
- Conduct a subnational “Doing Business” study on business regulations from the perspective of a small to medium size domestic firm across five cities in Afghanistan: Kabul, Herat, Jalalabad, Kandahar and Mazar-i-Sharif. The study will provide benchmarks for four regulatory areas: (1) starting a business, (2) dealing with construction permits, (3) getting electricity, and (4) registering property. The study will provide reform recommendations to Afghan government and local governmental bodies.
- Re-engineer the process of issuing construction permits for commercial and residential buildings for Kabul municipality to stimulate investment, improve building safety, and reduce illegal construction.
- Develop a construction permit automation system and build the ability to operate this system by training municipal staff.
- Roll out the reformed 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 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 access to credit.
- Reduced average time to obtain residential and construction permits from eight to five months thereby improving market efficiencies and promoting transparency.
Last updated: November 04, 2015