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SIGAR issues pessimistic economic forecast for Afghanistan

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Afghanistan’s economy suffered severe contraction in 2021, with the UN Development Programme (UNDP) and IMF estimating up to a 20–30 percent drop, the US Special Inspector General for Afghanistan Reconstruction (SIGAR) reported.

According to SIGAR’s latest report, annual per capita income is estimated to have fallen from $650 in 2012, to $500 in 2020, and is expected to drop to $350 by 2022.

SIGAR stated that male unemployment in Afghanistan may nearly double from 15.2 percent in 2019 to 29 percent by 2022.

“In the worst-case scenario modeled by the Asian Development Bank, unemployment could increase by more than 40 percent in the short run and household consumption could contract by 44 percent,” read the report.

The devaluation of the afghani has also impacted the Afghan economy and further diminished Afghan households’ ability to purchase food and
other necessary items, because much foreign trade was settled in US dollars.

Since August last year, the afghani has depreciated against the US dollar, from approximately 77 afghani to the dollar to around 105 as of January
2, 2022.

SIGAR also reported that adding to the pressure on the country’s limited cash reserves, Afghanistan lacks the technical capabilities to print its own currency.
According to SIGAR, the IEA has not yet secured or developed a domestic printing source for afghani banknotes.

SIGAR reported that Afghanistan’s largely cash-based economy has continued to struggle with an acute cash shortage since November, which has limited day-to-day economic activities.

“Banks are at the center of a liquidity crisis, with lost access to international financing and depositors attempting to recover their funds,” read the report.

According to a UNDP report, Afghanistan’s banking system is in “existential crisis.” Total deposits had fallen to the equivalent of $2 billion as of
September 2021 from $2.8 billion the month.

As the Afghan economy has struggled to find areas of sustainable economic growth in recent years, the country has increasingly relied on remittances from Afghans working abroad, especially in neighboring Iran.

By 2019, remittances accounted for the equivalent of 4.3 percent of Afghanistan’s annual GDP, an increase from 1.2 percent in 2014, according to World Bank data.

However, officials from the UN’s International Organization for Migration estimate this figure could have been as high as 15–20 percent, given that many remittances are sent through the informal hawala money-transfer system.

According to officials at Médecins Sans Frontières, with the absence of a functioning banking sector, many NGOs have also been forced to rely on
hawalas to pay expenses within Afghanistan.

In November 2021, the IEA announced a complete ban on the use of foreign currency in Afghanistan, interfering with remittance activities and
worsening the country’s liquidity crisis.

However, SIGAR reported that indicators suggest that the currency ban is not being actively enforced against the US dollar, which continues to be widely used in Afghan markets.

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Afghanistan, Uzbekistan sign $400 million trade deals in push to deepen ties

The agreements span multiple sectors, including textiles, raw materials, pharmaceuticals and other key industries.

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Afghanistan and Uzbekistan have signed 20 commercial agreements worth more than $400 million, marking a significant step toward expanding economic cooperation between the two neighboring countries.

The deals were finalized during a high-level business meeting in Uzbekistan’s Fergana Province, where Afghan and Uzbek private sector representatives gathered as part of an official Afghan trade delegation visit.

The agreements span multiple sectors, including textiles, raw materials, pharmaceuticals and other key industries.

The Afghan delegation was led by Zalgai Azimi, deputy for investment at the Afghan Chamber of Commerce, and included senior business figures such as Abdullah Rahimi, Syed Ahmad Noorzad, Ubaidullah Hotak, and Deputy Chief Executive Mirzaman Popal. Participants from both sides highlighted the importance of strengthening cross-border trade and building long-term commercial partnerships.

As part of the visit, Afghan delegates toured major industrial facilities in Fergana Valley to assess Uzbekistan’s manufacturing capacity and explore opportunities for future collaboration.

The agreements come as Afghanistan seeks to boost regional connectivity and revive its economy following years of conflict, isolation and economic disruption.

Trade with Central Asian neighbors—particularly Uzbekistan—has become increasingly important, with both sides investing in transport links, energy cooperation and cross-border markets.

Uzbekistan has positioned itself as a key economic partner for Afghanistan in recent years, supporting infrastructure projects and promoting trade corridors that connect South and Central Asia.

Analysts say deals of this scale could help generate jobs, increase exports and gradually integrate Afghanistan more deeply into regional supply chains.

The latest agreements signal growing momentum in bilateral relations, as both countries look to translate geographic proximity into stronger economic interdependence.

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Afghanistan, Kyrgyzstan aim to boost trade to $1 billion

Both sides welcomed the steady growth in trade between the two countries in recent years and agreed on the strategic goal of increasing bilateral trade to reach $1 billion.

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Afghanistan’s Minister of Industry and Commerce, Nooruddin Azizi, met with Kairat Tursunkulov, Deputy Foreign Minister of Kyrgyzstan, in Kabul this week to discuss ways to strengthen economic and trade ties between the two countries.

The meeting was also attended by Turdakun Sadykov, Kyrgyzstan’s ambassador to Afghanistan.

Azizi expressed appreciation for Kyrgyzstan’s participation in the recent Afghanistan–Central Asia consultative meeting and underlined the importance of expanding bilateral trade and economic cooperation.

Tursunkulov described Afghanistan and Kyrgyzstan as “brotherly nations” with strong cultural connections. He extended an invitation for Azizi to visit Kyrgyzstan to further enhance collaboration.

Both sides welcomed the steady growth in trade between the two countries in recent years and agreed on the strategic goal of increasing bilateral trade to reach $1 billion.

In addition, Azizi highlighted ongoing construction projects in Kyrgyzstan and suggested that Afghan construction companies and skilled workers could contribute their expertise to support development efforts in the country.

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Kazakhstan eyes rare metals mining projects in Afghanistan and Rwanda

As Kazakhstan looks to expand its global mining footprint, the exploration of rare metals in Afghanistan and Rwanda marks a significant step towards diversifying its mining interests.

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Kazakhstan is actively exploring mining opportunities in Afghanistan and Rwanda, focusing on rare metals, as part of a broader strategy to expand its resource development portfolio. According to a report by Kazinform, Tau-Ken Samruk, Kazakhstan’s national mining company, is conducting laboratory studies on mineral samples obtained from both countries.

The announcement was made by Iran Sharkhan, Kazakhstan’s Vice Minister of Industry and Construction, during the Geoscience & Exploration Central Asia 2026 event. Sharkhan emphasized the substantial resource potential in Afghanistan and Rwanda, noting that current efforts are directed towards evaluating the legal and regulatory frameworks in these countries, as well as verifying the geological prospects before proceeding with potential mining operations.

The laboratory testing, which is taking place at Tau-Ken Samruk’s facilities and additional labs in Kazakhstan’s Karaganda region, involves comprehensive analysis of base metals, rare metals, and rare earth elements from the two countries. These tests will determine the viability of large-scale mining operations in the future.

Sharkhan further indicated that if the laboratory results confirm promising geological findings, more detailed plans for mining projects will be disclosed in the coming months.

The report also highlighted that Kazakhstan’s major mining companies have already invested nearly 150 billion tenge into scientific research in the country’s mining sector, reinforcing the nation’s commitment to advancing its mining industry on both the local and international stages.

As Kazakhstan looks to expand its global mining footprint, the exploration of rare metals in Afghanistan and Rwanda marks a significant step towards diversifying its mining interests.

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