By Abdul Zuhoor Qayomi-KABUL: Insecurity, frequent political turbulences, withdrawal of foreign security forces, disappointing attitude of the government are counted as major factors for slow economic growth in the country. A government which is mostly run by donations has only one option to free itself from foreign influence and that sole option is to strengthen economy. To do so the government would have to facilitate the businesspersons and investors.
However, situation in the country is quite different and depressing as businessmen and women in a trade fair held in the last week of February in Kabul expressed serious concerns over policies of the National Unity Government.
Chairperson of the Sheren Qahraman Handicrafts Company, Nelofar Ebrahemia who displayed the company’s made handicrafts in the expo, said that she started business in 2001 with satisfactory growth in the past decade. She said that she showcased the products in different trade fairs but the last two years were very disappointing from business point of view.
Talking to Afghanistan Times, she lamented over inattention of the government towards Small and Medium Enterprises (SMEs) and the facilities required by Afghan businesspeople are not provided by the authorities. She also acknowledged that buying-capacity of citizens has declined in the past two years that she termed a setback for her budding company.
“We will be satisfied be don’t run in loss. At this critical juncture, what matters most is survival not profit. Our business is dependent on purchasing power of ordinary citizens. People don’t have the economic capacity to buy an embroidered suit for at least Afs6,000,” she underlined the unfortunate reality while referring to poor national economic growth.
Responding to a question, she said that her company’s made products are sold abroad especially in Asian markets because the foreigners do have the capability of purchasing their products.
Male and female suits, jewelry, embroidered suits, cross-stitches and different kinds of handicrafts were the major products showcased by Ms Qahraman in the expo. She went on saying that the government could provide ground for business improvement but if facilities were given to the entrepreneurs.
Another businesswoman Nafisa Hashemi said that her company is her hope to have a bright future. She is owner of the Nafisa Handicrafts Company. Her major problem is high amount given to the government as income tax because the company is in survival mode. “I pay around 12 percent income tax, but the revenue is less than that,” said Ms Hashemi while asking the government to lower the income tax rate. Her company produces different kinds of handicrafts including carpets and rugs, decoration pieces made of lapis lazuli and precious stones.
She suggested that taxpayers should be categorized based on their investment. In simple words, those who made more investment should give more income tax as compared to the companies with low investment.
Criticizing the government she said the marketing facilities should be provided by the relevant authorities because the businesspersons find it difficult to export products. “The government shall train the weavers as our designs are too old. People want something new and modern,” she maintained.
Businessmen in the country are supported by the Afghanistan Chamber of Commerce and Industries (ACCI) and some NGOs. They provide facilities for holding such exhibitions. High transportation charges is another problem faced by Afghan exporters.
“I cannot export goods due to high transportation cost,” said Head of Amiri Carpets and Jewelry House (ACJH). Farhad Amiri said that he is charged $45 per kilogram when exporting carpets.
The sky-rocketing postage cost has also affected the retail market. Export agents or companies do not accept cargo that is less than 70 kg. Foreigners find it hard to import Afghan-made products. Transportation charges for a small carpet that costs Afs5,000 is Afs10,000.
“Afghan carpets were sent to the United States and Germany through Pakistan while having made-in-Pakistan tags. However, this is no more practiced,” he said.
He urged the government to provide exports facilities to the businesspersons through the state-owned cargo companies with affordable rates. He also sought carpet processing machines in Kabul because Afghan rugs are processed in Pakistan in these days.
High power tariff and custom taxes over raw materials are also counted as major challenges by the entrepreneurs.
Chairman of the PayghamAzizi Handicrafts, Food Stuff and Saffron Company, Nisar Ahmad Paygham, said that this year for not promising for the company. He said the number of contracts and donations shrunken this year. He said that due to political turmoil in 2014, most of the contractors ended their business with Afghan companies.
“Instead of helping the investors, the government has increase custom duty on raw materials. I am paying 20 percent as custom duty when importing raw materials. Moreover, high power tariff has also affected our business because I pay Afs10 for per kilowatt electricity. Most of the time we try to shut down machines and avoid overloaded electricity bills,” he lamented.
Chief of the Maza Food Industry, Zakia Roshan, said that her company produces chocolates and make less profit because she has to pay unbearable custom tax and electricity bills.
Lambasting the government for not taking the businesspersons problems seriously, she said the relevant authorities should take appropriate measures to support and encourage local products. She said that import of foreign products should be banned. Ms Roshan also suggested that the government should provide electricity to the companies on subsidized rates.
Spokesman for the Ministry of Commerce and Industries, Mosafir Qoqandi, in an interview with Afghanistan Times rejected that allegations regarding inattention of the government towards problems faced by the Afghan business community. He said the government has tried to facilitate the businesspersons in different areas such as transit trade.
In the past 13 years the government tried its best while using the available resources to support the local companies, the spokesman added. However, he acknowledged that the government is not providing soft loans to the industrialists. “The government lacks the required financial resources to do so,” he said.
He asked the local companies to find raw materials in the country if available instead of rushing to foreign lands. Responding to a query he said the government has already increased custom duty on 16 different products that are imported.