A rapid desk study: Afghanistan – current status and future prospects for the construction sector

Abstract

The construction sector in Afghanistan has been one of the main beneficiaries of the huge investment made on civilian and military projects in the last decade by the international community. During this period, many military bases were constructed, thousands of kilometres of roads have been constructed and rehabilitated, numbers of schools and health facilities have increased significantly and improvements have been made to all other infrastructures such water, power, irrigation schemes etc. The GDP of the country has quadrupled since 2002. Currently, Afghanistan is in transition. Presence of foreign troops and international NGOs is decreasing. The decrease in foreign military presence and the transfer of responsibility for the security of the country to the Government is creating significant uncertainties in all sectors of the Afghan economy. This is true in the construction sector which is facing serious problems as demand decreases resulting in significant layoffs and a downward decline of unit rates. To mitigate the situation, the construction sector has to shift from donor financed projects to more sustainable market based initiatives. The purpose of this paper is to identify and propose market based sustainable schemes to lessen the impact of reduced demand for the sector. The proposed actions should also enable broad based and inclusive participation of the different parts of the society and creation of significant job opportunities. This report has been produced for Evidence on Demand with the assistance of the UK Department for International Development (DFID) contracted through the Climate, Environment, Infrastructure and Livelihoods Professional Evidence and Applied Knowledge Services (CEIL PEAKS) programme, jointly managed by DAI (which incorporates HTSPE Limited) and IMC Worldwide Limited