Islamic Emirate at a Glance

(Part 13)

Summary of the Most Significant Accomplishments of the Islamic Emirate

(2022 – 2023)

By: H.N

Qosh Tepa; Afghanistan’s Largest Irrigation Canal

The Islamic Emirate of Afghanistan inaugurated the country’s largest irrigation canal in April, 2022, as a pivotal step towards economic advancement. Over the past year, work commenced on the construction of the first phase of the Qosh Tepa canal, Afghanistan’s largest irrigation conduit, culminating in its successful completion due to the steadfast efforts and unwavering commitment of responsible authorities.

The Qosh Tepa canal, drawing water from the Amu River, starts from Kaldar district in Balkh province. After passing through the deserts of Hairatan and Dawlatabad districts in Balkh, it reaches Jawzjan province and ultimately connects to Andkhoy district in Faryab province. This project is designed to irrigate 850,000 hectares of agricultural land and recharge underground water resources.

The Qosh Tepa canal spans 285 kilometers in length, with a width of 152 meters and a depth of 8.5 meters. Its water level stands at 6.5 meters, boasting a flow capacity of 668.4 cubic meters per second. Structured in three phases, the first phase covers a span of 108 kilometers, linking Kaldar district to Dawlatabad district in Balkh.

The second phase extends over 177 kilometers, originating from Dawlatabad district, passing through Aqcha district in Jawzjan, and concluding in Andkhoy district, Faryab. The third phase of the Qush Tepa canal encompasses auxiliary canal reconstruction and land allocation. Additionally, plans include the establishment of two industrial and agricultural parks for processing and commercializing agricultural yields.

Construction of Kamal Khan Dam Canals

The Kamal Khan Dam, recognized as one of the nation’s most significant infrastructure endeavors, encompasses the development of two pivotal canals. Over the past year, the excavation works for these canals were entrusted to the National Development Corporation. The construction of Kamal Khan dam canals will facilitate irrigation across a vast expanse totaling 50,000 hectares of agricultural land.

Monetary Policy

The Afghanistan Bank, in recent years, has adeptly safeguarded the Afghan currency’s value against foreign exchange fluctuations through judicious monetary policies, thereby effectively controlling inflation rates. This notable achievement is attributed to the steadfast efforts of authorities in combatting corruption, curbing dollar smuggling, promoting transactions in Afghan currency, regulating currency markets, and bolstering the nation’s export activities.

Statistics indicate that over the past year, the Afghan currency has appreciated by 4.45% against the US dollar, while the inflation rate has decreased by 6%. These tangible outcomes have garnered commendation and acclaim from both domestic and international entities.

According to the World Bank’s report, the Afghan currency has exhibited heightened stability in the fiscal period. Noteworthy increments include a 3.8% appreciation against the US dollar, 2% against the Euro, 0.5% against the Indian Rupee, 20.6% against the Pakistani Rupee, 41.2% against the Iranian Rial, and 0.7% against the Chinese Yuan.

Islamic Banking

Considering the global upward trend of Islamic banking and its adherence to Sharia principles, ensuring both comprehensive security and ethical compliance, the Islamic Emirate is committed to fostering further growth and advancement of Islamic banking in Afghanistan. Over the past year, concerted and effective efforts have been undertaken through the Afghanistan Central Bank, as outlined below:

• Establishment of an Islamic Banking Committee within the Afghanistan Central Bank.

• Formation of an Islamic Banking Committee for conventional banks.

• Initiation of proposals for converting conventional banks into Islamic institutions, with thorough evaluation of submitted proposals.

• Review and enhancement of regulations, operational procedures, and policies governing commercial banks.

• Facilitation of Murabaha Capital Notes.

• Issuance of comprehensive guidelines for Mudaraba investment products.

• Implementation of guidelines for Musharaka partnership contracts.

• Development and implementation of guidelines for leasing products.

• Establishment of internal management protocols for effective administration of Sukuk and Takaful instruments.

• Signing of a MoU with AAOIFI to promote Islamic banking practices and leverage the experiences of Islamic nations.

Non-Banking Sector

The non-banking sector holds a significant position alongside the banking sector and encompasses entities such as currency exchange providers, money service providers, electronic money institutions, leasing companies, and payment institutions.

Efforts have been made to organize and develop a mechanized plan for the operations of currency exchange and money service companies, resulting in the issuance of over 97 licenses for such entities and more than 109 agency licenses nationwide. This brings the total number of licenses to 973, reflecting the sector’s robust activity.

Furthermore, the timing of the licensing system, establishment of a joint committee among relevant authorities to halt illegal currency exchange and money service activities, are other initiatives undertaken during the past year.

In addition, measures such as streamlining the licensing process and establishing a joint committee among relevant authorities to combat illegal currency exchange and money service activities have been implemented over the past year.

Execution of Cash and Non-Cash Transactions

Managing liquidity at both central and provincial levels is a complex endeavor; however, due to the diligent efforts and effective management of Da Afghanistan Bank, in conjunction with relevant institutions, the financial requirements of central and provincial entities have been successfully addressed.

Over the past year, notable strides have been taken in the printing of new banknotes. Through ensuring liquidity availability nationwide, there has been a heightened promotion of the Afghan currency compared to the past. Furthermore, surplus banknotes from private commercial banks have been seamlessly transferred to the treasury of Da Afghanistan Bank.

Enhancement of Payment Systems and Information Technology

Da Afghanistan Bank upholds a strong belief in information technology and is committed to advancing technological systems. As per available data, the volume of electronic payments has exceeded 12 billion Afghanis and over 90 million US dollars.

Moreover, several electronic money institutions have been integrated into the Afghanistan payment system, facilitating essential infrastructure for the expansion of digital services and products offered by Da Afghanistan Bank. Additionally, the ICPSS/ACSS systems, previously suspended by contracted companies following political upheaval in the country, have been reinstated.

Continued…

 

Reference: IEA’s Accomplishments