More work and income in northern Afghanistan

Project description

Title: Sustainable economic development and employment promotion in Afghanistan (SEDEP)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Afghanistan
Lead executing agency: Ministry of Commerce and Industry (MoCI)
Overall term: 2014 to 2017

Context

With the end of the International Security Assistance Force (ISAF) mission and the start of the transition period, which looks likely to continue until 2024, Afghanistan is in a crucial phase of its political, economic and social development.

Around half the Afghan population is underemployed or unemployed, with women being particularly hard hit. The economy is unable to absorb the 500,000 or so young men and women entering the labour market every year. Given the volatile security situation and political uncertainty following the withdrawal of international troops, businesses are reluctant to invest. Furthermore, the agricultural sector, which currently accounts for around 60 per cent of jobs in the country, is characterised by high levels of subsistence farming and low productivity. Production surpluses are mostly exported as raw produce. Poor quality, but also the high production costs make it difficult to produce processed, regionally competitive commodities that can substitute imports or can serve the export market.

Stakeholders in the agriculture sector are unaware of the possibilities available to them for developing domestic value chains and therefore fail to take advantage of this potential. In addition, cooperation along the value chains is limited, which impedes smooth interaction between production, procurement, marketing and advocacy. As a consequence, the private sector in northern Afghanistan (farms included) is unable to generate sufficient income and employment opportunities for the population.

Objective

Sustainable productive employment and income opportunities have been created for economically active men and women in the six northern provinces of Badakhshan, Baghlan, Balkh, Kunduz, Samangan and Takhar. The economic participation of the different ethnic groups is a key stabilising factor in the peace process.

Approach

The project pursues a value chain approach for poultry products, milk, wheat and vegetables, as well as for walnuts, almonds and pistachios, which are produced on a large scale in Afghanistan. It sets out to improve the technical, organisational and business skills of employees and managers in enterprises along the entire value chain and link them up via networks. Public and private service providers and interest groups receive training to enable them in future to tailor their services to demand. The largely small enterprises benefit from improved management skills and from support in implementing business development plans and investment grants. Together with its partners, the project team is also rehabilitating or setting up rural micro-infrastructure such as irrigation and storage systems. Where necessary, the people and the municipal authorities are taught how to operate these facilities themselves.

The project promotes the stepping up of dialogue between public and private sector decision-makers with a view to overcoming obstacles in developing individual value chains. The ensuing enhanced communication increases the visibility and legitimacy of the Afghan state and strengthens the trust between individual members of the value chains. In all activities, there is a particular focus on the specific needs of women.

The consulting firm GFA Consulting Group GmbH supports the implementation of the project.

Results

Between 2015 and 2016, almost 19,000 enterprises and smallholder farms benefited from the training activities carried out under the project. According to the participants, their income increased by approximately one third. The survey results also show that over the same period almost 13,000 new jobs were created, of which roughly 7,000 were permanent and around 6,000 seasonal. Accounting for over 20 per cent of the new jobs, women also share in this growth – a considerable success in a cultural environment in which it is once again becoming more difficult for women to find and accept employment. Almost half the respondents stated that the knowledge acquired in the training courses had helped them increase their income.

One example of the project’s work is its support for the Pakiza dairy in Mazar-e Sharif. SEDEP helped in devising a business plan and training staff members. Milk supply groups were organised and farmers trained in how to increase milk yields and to improve the health of their cows. The project conducted hygiene training for milk collectors and developed innovative products and marketing ideas together with workshop participants. In the Pakiza dairy alone, 20 new jobs were generated.

Since the project began, 44 micro-infrastructure projects have been completed with SEDEP support, including irrigation systems, solar-powered hatcheries for poultry production, milk collection centres, warehouses for products from the value chains, and greenhouses. All construction activities are designed to improve production and marketing conditions along the value chains. Around 34,000 people in the six northern provinces benefit directly from these small-scale construction measures.

The government’s decision in 2017 to procure poultry products for the Afghan army locally can be seen as a major positive outcome of the project’s efforts to foster dialogue between the administration and private sector. The armed forces employ over half a million people. Now at least 23 per cent of their supplies must comprise local produce, which helps create jobs and improve income in poultry farming.