The 7th Report of the Afghanistan EITI released on 19th June 2021 – the report is part of efforts of an in-house production by the multi-stakeholder group (MSG) of the Afghanistan Extractive Industries Transparency Initiative (AEITI) based on cash accounting covering the fiscal years 1397 and 1398 (21 December 2017 – 20 December 2019). Following the endorsement of the AEITI MSG in its meeting held on July 4, 2020, AEITI joined EITI pilot, which is an alternative approach to EITI reporting. This approach makes increased use of direct online disclosures, which reduces the costs of annual AEITI reporting but also increases the demands on stakeholders’ time. The report transparently discloses the data required under the 2019 EITI Standard.
The report is primarily based on the government’s unilateral publication of data. Apart from disclosing data, the report also makes recommendations to strengthen both government and companies’ systematic disclosures of EITI data by identifying and addressing gaps in such disclosures. Data collection for the 7th AEITI Report was carried out by the AEITI National Secretariat, located in Kabul.
While the report mainly covers fiscal years 1397 and 1398 (21 December 2017 – 20 December 2019), it also documents the impact of the COVID-19 crisis on Afghanistan’s extractive sector.
As per the report, the government’s revenues from the extractive industries totaled four billion eight hundred thirty four million nine hundred nine thousand nine hundred and forty seven point eighty one AFN (4,834,909,947.81 AFN) equaling sixty seven million seventy six thousand nine hundred and ninety seven point six USD ($ 67,076,997.06) in 1397 and four billion two hundred eighty eight million one hundred forty four thousand seven hundred and fifty three point five six AFN (4,288,144,753.56 AFN) fifty five million one hundred sixty thousand and eighty one point seven three USD ($ 55,160,081.73) in 1398. The revenues in 1397 were 75% higher than the thirty eight million one hundred seventy two thousand five hundred and ninety six USD (USD 38,172,596.74) in revenues in 1396, because the MSG decided to include companies that did not hold mining, oil or gas licenses but engaged in exports of mineral commodities in the scope of the 7th AEITI Report. This is an effort to build a more complete picture of the government’s revenues from the extractive industries, given the importance of customs fees and taxes levied on exports.
Following average of 2.3% annual economic growth in 2014-2019, Afghanistan’s economic (GDP) growth reached 3.9% in 2019 (1398), as the country recovered from the drought in 2018. The industrial sector, which includes mining and extractives, grew by only 2% in 2019.
The government’s domestic revenue collection has deteriorated sharply in 2020, particularly from Q2 onwards. In total, domestic revenue collection in the first half of 2020 was AFN 74.7 billion, 20% lower than the MoF’s target of AFN 94 billion.
This report is meant to provide a diagnostic, a clear picture of the extractive industries in 1397-1398 (2018-2019) – and where possible, 1399 (2020) – and a basis for informed discussions to inform policy making and public debate.
For more details on the results of the 7th AEITI reporting cycle, download a copy of the 7th EITI Afghanistan Report below: