Economic Governance and Private Sector Development

Economic Governance and Private Sector Development

Creating the conditions in which a dynamic and competitive private sector can flourish, is key to
promoting economic growth, employment creation and poverty reduction. Kandahar is both an
agricultural and an industrial province. The majority of commercial activity in Kandahar is related to
trade and services, and agricultural and livestock products.
Agriculture is a major source of revenue for 28% of households in Kandahar province, including 38%
of rural households and 8% of households in the urban area. Thirty two percent of rural households and
1% of urban households own or manage agricultural land or garden plots in the province. However, just
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under half of households in the urban area (43%) and a little more than one quarter of households in
rural areas (29%) derive some income from trade and services. More than a third of households in rural
areas (37%) and more than one quarter of households in urban areas (27%) earn income through nonfarm
related labour. Livestock also accounts for income for less than one tenth of rural households (8%).


In 2005 there were 109 Agricultural cooperatives active in Kandahar involving 4700 members. This
was five times more people than in 2003 when the figure was only 942 members. In 2005 agricultural
cooperatives controlled a total of 37015 Ha of land and achieved a surplus of products for sale of
45,000 tons. As a result of this, each member held a share in the capital of the cooperative to the value
of 2,640,700Afs.
The major industrial crops grown in Kandahar are tobacco produced in 82 villages, cotton in 59
villages, and sugar extracts in 24 villages. Maiwand District is the major producer of all these products
particularly cotton and tobacco. Spin Boldak, Kandahar, and Panjwayee produce Tobacco. Sugar
extracts are concentrated in Zherai and Maiwand.
The sector of small industries is almost absent in the province. Three villages in Zherai District produce
honey and karakul and sugar candy is produced in Panjwayee. Handicrafts is not a well-developed
sector either. Jewellery and rugs are mentioned in this regard. Out of 61 villages producing jewellery,
forty one are in Zherai District and out of 10 villages producing rugs, three are in Zherai and three
others are in Maiwand Districts.
In 2005, 33% of households in Kandahar reported taking out loans. Of these households, a small
percentage used these loans to invest in economic activity such as business investment (6%),
agricultural inputs (5%) and buying land (1%).