New MRRD Programme to promote entrepreneurship in Afghanistan

September - 05 - 2007 (Herat)

Mohammad Ehsan Zia, Minister of Rural Rehabilitation and Development of the Islamic Republic of Afghanistan gave a presentation about a new MRRD initiative at a seminar on the review of economic situation in the western provinces of the country - instigated by the National Economy Commission of the National Assembly of Afghanistan.[1]

Afghanistan Rural Enterprise Development Programme (AREDP) is intended to jumpstart private sector growth in rural Afghanistan by closing the gap over a 10 year time period. By focusing on selected “Champion Products” in the strategic sub-sectors of the economy, and the country’s comparative advantage, the programme aims to reduce reliance on imports of mass consumption goods at the same time as supporting the value-added to export items.

The aim of the programme is to harness the potential of the private sector for inclusive economic growth, sustainable rural employment and income generation, said MRRD Minister. “[the] Government’s intervention in these sectors will be to strengthen the private sector through top-down (induced) and bottom-up (demand-driven) approaches. The main programme components include: Enterprise-facilitation; policy-based lending to communities and enterprises; providing support, incubation, and hand-holding services to businesses.” 

The Afghanistan Rural Enterprise Development Programme (AREDP) will build on the experiences of MRRD’s current 5 key national development programmes and in particular on the success of the National Area Based Development Programme (NABDP) and the National Solidarity Programme (NSP) by reinforcing the sub-national governance structures that have been introduced through these two programmes. The Community Development Councils (CDCs) will be used as a point of community entry and a source for the identification of potential income generation activity-focused common interest groups. As the programme progresses, a cadre of business development consultants will be positioned within the umbrella of the District Development Assemblies (DDAs) for the provision of long term community-based business support.

The projected programme costs over the 10-year period come to a total of $568 million.

In return, by conservative estimates the programme outputs at the end of the 10-year period will consist of close to 1 million newly created enterprises in the private sector providing sustainable employment for more than 2 million people in rural areas of Afghanistan, and contributing a net 2 billion Dollars in total returns to the national economy. Alongside these direct outcomes, at the end of this period the programme will have built-up financial structures that are currently lacking in the rural areas of Afghanistan, reduced reliance on foreign imports and poppy cultivation, and connected rural areas to national, regional and global markets, thereby contributing to the creation of a stable, prosperous and entrepreneurial society in Afghanistan.