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Presidential Initiative for Enterprise Development in
Afghanistan
Afghanistan Rural
Enterprise Development Program
:: AREDP ::
In order to achieve long-term stability
and prosperity in Afghanistan, it is important that the successes of
the past five years on the political and institution-building fronts
are matched on the economic front with poverty reduction and
sustainable job creation. This is especially true for rural
Afghanistan, where most of Afghanistan’s population lives and where
the problems of poverty and unemployment are particularly severe.
Whereas the Afghan economy
as a whole has registered robust growth rates in recent
years, these figures largely reflect booming
construction and trade-related activities in urban areas
and the steep rise in narcotics. There has been little
growth of enterprise-related activities in rural areas
of Afghanistan, and most people still live on
subsistence farming. Even where Afghanistan could be
self-sufficient in agriculture-related products, the
country imports vast quantities of food and other
easily-manufactured daily use items, while the exports
sector remains small and undiversified.
The two major obstacles to
private sector enterprise growth (micro-enterprises and
SMEs) in rural Afghanistan are shortage of business
planning, management, and marketing know-how and
shortage of access to formal credit. There is a strong
need for a government-led initiative that targets rural
areas for the specific purpose of providing easy access
to credit and business support and hand-holding.
Afghanistan Rural
Enterprise Development Program (AREDP) is intended to
jumpstart private sector growth in rural Afghanistan by
closing this gap over a 10-year time period. By focusing
on selected “Champion Products” in strategic sub-sectors
of the economy and the country’s comparative advantage,
the program aims to reduce reliance on imports of mass
consumption goods at the same time as supporting value
addition to export items.
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 program components
are:
·
Enterprise-facilitation in rural communities;
·
Policy-based lending to communities and enterprises;
·
Providing
support, incubation, hand-holding services to
businesses.
For its implementation, the
program will utilize Public Private Partnerships (PPP)
that have proven successful in achieving similar targets
elsewhere in the world. Projected program costs over the
10-year period come to a total of $568 million.
In return, by conservative
estimates the program 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 to 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
program 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.
www.president.gov.af/english/news/171007_preapprovesmajorproject.mspx
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