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Kabul Experiences Fuel Price Increases

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(Last Updated On: December 28, 2019)

Kabul residents report that fuel prices are 20% to 25% higher this year. Some residents have called for the government to address the fuel price issue.

According to the Afghanistan Chamber of Commerce and Investment (ACCI), high demand for fuel drives the increase in fuel prices.

“We have invited the [fuel] sellers to ACCI and encouraged them to keep the prices as low as possible because of the low economy of our people,” said Jan Agha Noori the ACCI spokesperson. He added that this problem is temporary and will be solved soon.

Every year, during the winter months, the price of fuel in Kabul rises.

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IMF, Afghanistan reach preliminary agreement over Extended Credit Facility

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(Last Updated On: August 15, 2020)

The International Monetary Fund (IMF) and the Afghanistan authorities have reached a preliminary agreement on an economic reform program to be supported by a new three-and-half year US$364 million Extended Credit Facility (ECF).

This announcement comes just three months before the United Nations’ donor pledging conference for Afghanistan gets underway. 

In a statement issued by the IMF on Friday, the fund said the ECF will help mitigate the economic impact of the Covid-19 pandemic, maintain macroeconomic stability, and underpin reforms for economic resilience and good governance.

The fund also stated that continued financial assistance from international partners is critical to support objectives of Afghanistan’s National Peace and Development Framework for 2021-25, including inclusive growth, poverty reduction, and self-reliance.

Leading the IMF’s team was Azim Sadikov, and virtual discussions were held with Afghan officials through July and August on the country’s economic reform program. 

Sadikov said however that the agreement is subject to the approval of the IMF’s Executive Board, which would possibly consider the agreement in October after preliminary conditions have been met by Afghan authorities, including the improvement of accountability and transparency in procurement processes. 

“The new ECF arrangement will support authorities’ reform program to maintain macroeconomic stability and lay the ground for a sustained post-pandemic economic recovery while continuing to advance structural reforms,” Sadikov said. 

He said the reform program aims to gradually reverse the fiscal decline due to the pandemic and instead create space for development sending while increasing self-reliance. 

He stated improvements in customs collections and revenue administration need to be improved and the planned Value Added Tax (VAT) process needs to be implemented in 2022. 

“Monetary policy will continue to focus on maintaining price stability and a flexible exchange rate regime, while fostering confidence in the Afghani,” Sadikov said.

 He also said that reforms, in accordance with the new ECF arrangement, will focus on addressing issues that hamper economic growth and resilience. 

“To that end, the program will aim to improve fiscal governance, strengthen the anti-corruption regime, and bolster the financial sector,” he said. 

“Bolstering the financial sector, including by completing the reform of state-owned banks, will also be important to boost its capacity to contribute to growth.

 “Coming before the November pledging conference, the ECF arrangement is expected to catalyze donor financing, which is critical to support Afghanistan’s reform and development objectives under the multi-year National Peace and Development Framework,” he said. 

 The pledging conference is organized every four years and was last held in 2016 in Brussels. 

This year, Finland will host the conference, which will be organized by both the UN and Afghanistan. 

Previous international financial commitments largely end by December of this year.

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China’s Tencent profit beats estimates on strong games demand

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(Last Updated On: August 12, 2020)

Chinese gaming and social media giant Tencent Holdings Ltd said second-quarter net profit rose 37%, beating market estimates, on higher demand for its video games as coronavirus put a dent in other entertainment options.

Revenue from online games, which accounts for one-third of total sales, jumped 40% in the quarter, primarily driven by smartphone games including Peacekeeper Elite and Honour of Kings. That offset a continued decline in desktop games.

Social networks, fintech and business services, and social advertising revenues all grew by nearly 30%.

Media advertising revenues fell by 25% however, “as a result of weak brand advertising demand amid the challenging macro environment”, and delayed content production and releases.

The world’s largest gaming firm by revenue booked a 33.1 billion yuan ($4.8 billion) profit for the three months through June. That was ahead of an average analysts’ estimate of 27.56 billion yuan, according to data from Refinitiv.

Revenue rose 29% to 114.88 billion yuan, versus market expectations of 112.76 billion yuan.

The results come a few days after the United States said it would ban WeChat-related transactions in the country.

Tencent, which owns the Chinese messaging app, is under pressure to address concerns about the impact of the ban and outline its plans to mitigate any fallout.

Source: Reuters

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Private sector welcomes peace move which could bring enormous investment opportunities

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(Last Updated On: August 11, 2020)

Peace in Afghanistan would provide enormous opportunities for local and international businesses to invest in the country, in turn boosting the economy and aiding in its overall development. 

Afghan business owners and leaders in the private sector have said the war has created major obstacles for investors in the country over the past 19 years. 

Following President Ashraf Ghani’s decree, issued on Monday afternoon, to release the remaining 400 prisoners so as to pave the way for peace talks, the Afghanistan Chamber of Commerce and Investment (ACCI) urged all warring parties to seize the opportunity to bring about peace so as to improve the country’s dismal economic climate.

“We welcome the Loya Jirga’s decision to release Taliban prisoners, which could have a positive impact on the country’s economic growth,” said Khanjan Alokozai, an ACCI member said. 

Officials at the Afghanistan Chamber of Mines and Industries seconded this and said peace in Afghanistan would not only increase investment opportunities but also create much-needed jobs. 

“With the release of the prisoners, our hope is that dialogue between Afghans will begin, as this will increase investment in the country,” said Sakhi Ahmad Paiman, deputy director of the Chamber of Mines and Industries.

Ghani’s decree comes a day after the consultative Loya Jirga voted in favor of releasing the hardcore Taliban insurgents, as per the Doha agreement between the US and Taliban in February – which was one condition that needed to be fulfilled before intra-Afghan peace talks could start.

Meanwhile, economic experts are also optimistic about the opportunity for peace and for what is hoped will be the resultant economic growth in the country.

Hakimullah Siddiqui, an economist, said: “Both sides of the war must seize the opportunity to stabilize and grow the country economically, in order to increase economic opportunities.”

Other economists said peace would open up vast opportunities for investments in all sectors, including mining, agriculture, services, energy, and manufacturing. 

Talks are expected to officially begin on Sunday, in Doha, Qatar, between government and the Taliban.

The Afghan government’s negotiating team is expected to leave Kabul on Wednesday.

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