Reform Plans 2020-2021

For PriSEC, private sector reforms are defined as significant changes in the systems, mechanisms, regulations, laws and processes that improve, standardize, facilitate and ease the way of doing business or investing in Afghanistan.

 

In August 2020, PriSEC technical team (Secretariat) made an inventory of 179 reforms/key actions from Private Sector Development National Priority Program (PSD-NPP), World Bank’s Doing Business Reform Memo (DBRM), recommendations of Public-Private Dialogues (PPDs) conducted in 2018-2019; and national documents such as National Financial Inclusion Strategy (NFIS), National Export Strategy (NES), Agriculture Business Charter (ABC). These reforms were further enhanced by consultation meetings conducted by H.E. First Vice President with traders and investors from economic zones (East, South, and Central); and by consultations meetings conducted by the technical team with chambers (ACCI, AWCCI, ACIM, ICC, ACSC, ACALP), Afghanistan Chambers Federation (ACF) and business unions such as Fresh Fruit and Dry Fruit Union, Bankers Association, Builders Association and other unions of key sectors.

 

Each Working Group (WG) in consultation with its co-chairs and permanent members prioritized 4 short-term (3-6 months) and 4 medium-term (6-9 months) reforms, making up a total of 40 reforms/key actions to work on with government lead agencies and close collaboration of private sector and international development partners.

 

Below is an update of progress on each WG’s reforms.

PriSEC Working 1 (Financial Development Sector) - Technical Sheet

No

Reform

Progress (%)

1 Reduce banks’ security costs (20% of all security contract) to allow financial institutions expand their branches and reduce service charges. 60%
2 Transfer Citizen Charter (CC) bank accounts from DAB to commercial banks 40%
3 Compulsorily adoption of fire insurance on 3 sectors (telecom, finance, and health) in Kabul city. 32%
4 Support financial institutions in providing banking services (leasing) for MSME in primary sectors such as agriculture, industry, and housing. 0%
5 Expand PCR coverage by integrating data from utility companies including, Telecom Companies, DABS, MFI and similar other institutions. 20%
6 Establish a One-Stop Shop for recovering banks’ default loans 44%
7 Develop Banks’ Resolution Framework 50%
8 Develop Appraisal Industry (to improve property pricing and valuations) 10%
Overall Progress 32%

PriSEC Working 2 (Agribusiness and Export Development) - Technical Sheet

No

Reform

Progress (%)

1 Finalization of new export procedure, temporary export of gold procecdure and precious and semi-precious stone procedure 56%
2 Implementation of 6% subsidies for exporting carpet endorsed by HEC 63%
3 Simplification of air cargo export process including improve and streamline security check for air corridor at Kabul airport 28%
4 Privatization of organizing Agro-fair in Badam Bagh by private sector 0%
5 Initiate the implementation process  of national single window (Electronic Import/Export Process) 4%
6 Equipping the quarantine labs (Animal & Plant) in portal provinces 0%
7 Initiate the establishment of modern cold storage in portal provinces 0%
8 Establishment of commercial horticulture and standardized processing centers 0%

Overall Progress

19%

PriSEC Working 3 (Investment Facilitation and Promotion) - Technical Sheet

No

Reforms

Progress (%)

1 Modify multiple tax identification number (TIN) distribution processes fo individuals and Companies 80%
2 Public Awareness of Electronic Tax Payment (Afghanistan Payment System) 18%
3 Upgrade the “Effective Use of Government Land and Property” procedure to regulation, to improve the ate sector’s access to land 45%
4 Facilitate the General Directorate of Passports’ access to information (database) of the ACBR and ARD (RMIS) to facilitate the process of obtaining/renewing a business passport and revoking a business license 59%
5 Draft of the new Investment Law 80%
6 Activate the “Invest in Afghanistan” Brand 0%
7 Amend the municipal laws and regulations to simplify and reduce the cost of sectorial licenses related to Kabul Municipality 0%
8 Simplify the sectoral license acquisition procedures 10%
9 Amend the Regulation on Environmental and Social Impact Assessment to accelerate the process of obtaining environmental permits for manufacturing companies and industries 35%

Overall Progress

40%

PriSEC Working 4 (Trade Facilitation and Industrial Development) - Technical Sheet

No

Reforms

Progress (%)

1 Establish Ombudstman to inspect private sector complaints under the OFVP 2%
2 Establish and activate a preliminary analysis committee for applicants that requests access to land in industrial parks in all economic zones of the country 50%
3 Develop a mechanism to facilitate the private sector access to waste materials of the public entities for recycling and to ban the exportation of waste materials such as metals, used batteries, plastics, cotton yarns and etc that can be used as raw materials in domestic industries 0%
4 Develop a roadmap for implementation of National Trade Policy 30%
5 Develop a roadmap for implementation of “productive Afghanistan” strategy 0%
6 Draft and Endorse the National Industry Development Strategy 1%
7 Setup  surveillance cameras on key customs activities in all customs/ports 54%
8 Simplify the process of obtaining electricity (meters) and electricity for manufacturing, commercial and service companies 50%
9 Improve the Afghanistan-Pakistan trade and transit regulations framework  including 1) Reducing the steps for goods inspection, 2) Specifying the mechanism for customs valuation, pricing and abolitioning seasonal tariffs, and 3)  Setting the main principles of goods transit 2%

Overall Progress

21%

PriSEC Working 5 (Legal) - Technical Sheet

No

Reforms

Progress (%)

1 Amendment and approval of the arbitration law to address the gaps in the existing law (e.g arbitrators Licence) 20%
2 Draft of the Islamic banking law 28%
3 Process of the Regulation for rental of Municipal Properties 33%
4 Amendment of the regulation on environmental and social impact assessment 14%
5 Review and get endorsed Anti- Subsidy law and Anti – Dumping law to protect domestic industries and use benefit of WTO 100%
6 Process and Get Endorsed the new Insurance law 40%
7 Process and Get Endorsed the Islamic Insurance Law (Takaful) 20%
8 Process and Endorsement of the Private Investment Law in order to identify and grant incentives (benefits) for investors 17%

Overall Progress

34%