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Delay in government formation threatening the Afghan economy

in Afghan Business

Delay in government formation threatening the Afghan economy

The Afghan business community leaders have criticized the government for delay in forming the government.

President Ashraf Ghani assumed power exactly four months ago and still has not been able to complete the formation of his government.

He fired countless number of officials all over the country with no replacements.

He and his CEO announced their cabinet nominees after a long impasse, which caused outrage among the public, after almost three months since inauguration of the new government. After long bickering, the parliament only approved eight ministers, less than a third of the total.

Given the current political situation of Afghanistan, economic growth could be zero in 2015. The handover of security from foreign forces to Afghanistan has also impacted the economic growth with business confidence and investment levels declining.

“The business community needs a strong government, legislation, the power of the rule of law,” BBC News quotes Aarakhsh Hafizi, head of the international relations committee of the Afghan Chamber of Commerce. “Without that, the market economy will not work.”

Afghanistan’s fragile economy recently became the nation’s top concern, according to a Gallup poll, where two in three Afghans cited local economic conditions getting worse.

Afghanistan’s economy shrank to 3.7% in 2013 and further declined to 1.5% last year, compared to an annual GDP growth of about 9% on average from 2003 to 2012.

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