PESHAWAR: Because of the limited banking system, factories in various provinces of Afghanistan began to shut-down after the Taliban takeover on 15 August.
This has not only led to the relocation of investors from Afghanistan and will further increase unemployment in the war-riddled country. Afghan industrialists said that the closures of banking system, lack of remittances, declining demand and Taliban occupation have also led to the closure of factories in the country.
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Traders in Afghanistan face severe difficulties in importing raw materials due to limited banking system, which is also one of the reasons behind the closure of factories. Thus, sources said, about 100 factories in the western province of Herat have closed down since the Taliban takeover in middle of August. Herat is one of the industrial cities of the country where 300 to 350 factories were operating but now there are less than 50 factories operating in Herat Industrial Estate. The industrialists said that due to the current crises, investors are waiting for banks to transfer their capital abroad.
The industrialists who have invested billions of dollars over the past 20 years are now moving to safer countries. The sources said that if this situation continues, the country will face severe shortage of goods and unemployment.
According to traders who have invested more than $6 million in a food processing factory in Herat Industrial Park, their factory has been out of order for the past several weeks. The factory had 240 employees but due to lack of raw materials and unfavorable conditions, the factory has stopped and the employees have been sent on unpaid leaves.
The owner of another factory in Herat city said that his factory had stopped production a month ago due to non-availability of raw materials. The owners informed that banks are not allowing factories to transfer funds for raw materials. He said that they are not allowed to access their bank assets to resume the factories operation. The factory owner said that he has no hope therefore; he has shut-down his factory.
Meanwhile, despite the Taliban government’s tax cuts, investors are not ready to take the risk of investing. Afghan businessmen demanded that the Taliban government immediately to activate the banking system for industrialists so that they can import raw materials to resumes the factories operation. They warned that if the trend continues, the rest of the factories will close soon.