Governance Structures for Business Environment Reforms in Afghanistan
A high-level delegation of officials from Afghanistan, comprising key members of the Private Sector Development Secretariat (PRISEC), visited Morocco on April 7-11, 2019. The knowledge exchange was intended to complement a World Bank Group advisory services project, the Afghanistan Business Enabling Environment, which supports the Islamic Republic of Afghanistan (GoIRA) in improving Afghanistan’s business and investment climate to promote private sector development and economic growth.
The exchange aimed at supporting the following objectives:
- Strengthen the capacity of officials from Afghanistan’s Inter– Ministerial Committee on Private Sector Development (PRISEC) on how to design an investment climate reform program supported by reform strategies and reform road maps.
- Help PRISEC in setting up or strengthening the necessary institutional structures to coordinate regulatory reforms that span across multiple agencies and ministries.
- Help to increase the capacity of PRISEC in implementing reforms and addressing implementation gaps on the ground.
- Support the development of GoIRA’s capacity to collect feedback and inputs from private sector stakeholders and engage with them more meaningfully in the reform process.
- Strengthen the capacity of PRISEC and relevant agencies to measure results and reform progress through reporting and accountability mechanisms.
To help address Afghanistan’s development challenges, GoIRA has undertaken several interventions to improve the business environment and support private sector-led growth. In April 2017, the Ministerial Committee on Private Sector Development (PRISEC) was established to lead the business environment reforms. PRISEC is co-chaired by the Ministry of Commerce and Industries (MoCI), the Office of the Chief Executive and the World Bank Group. The PRISEC committee includes key public and private stakeholders. The knowledge exchange aimed at strengthening PRISEC’s institutional capacity to design, coordinate, implement and monitor a successful business environment reform program aimed at fostering private sector development in Afghanistan.
During the knowledge exchange visit, the Afghan delegation interacted with key representatives from Moroccan institutions taking the lead in improving the business and investment climate in Morocco. Morocco has continued to improve its ranking in terms of doing business since implementing a series of reforms and ranked 60th globally in the World Bank Business Index, 2019. The Afghan delegation participated in learning sessions, meetings and discussions facilitated by:
National Committee for Business Environment (CNEA)- CNEA has been successful at implementing numerous business reforms since its creation in 2013, which have positively impacted Morocco’s position in the World Bank Doing Business rankings. CNEA facilitated a learning session on designing, implementing and monitoring an investment climate reform program through the development of action plans and effective reform strategies; inclusive approaches to stakeholder and regional engagements; techniques and approaches for establishing sector specific dialogue frameworks and the role of academia.
Secrétariat Général du Gouvernement – Discussions were held on the reforms to improve the regulatory environment for entrepreneurs and the process for devising laws.
Department of Commerce and Customs – Presentations and discussions took place focusing on the Moroccan export process, the PortNet digital portal and the reformed process for licensing exporters.
Municipality of Casablanca – Presentations and discussions on recent reforms to streamline the construction permitting system.
Regional Center for Investment of Casablanca (CRI de Casablanca) - Presentations on the one-stop-shop approach for company registration and discussions on CRI’s initiatives to improve regional competitiveness. CRI has developed resources to support investors such as the Investor guidebook, sector specific booklets and a multi-lingual website.
Confédération Générale des Entreprises du Maroc (CGEM, Morocco’s leading business association) - Facilitated a learning session on innovative approaches leading to effective private-public dialogue; how CGEM secured eight seats at the Senate enabling it to strategically lobby for reforms and influence policy making; the role and participation of women in corporate and state-owned enterprises (SOE) boards; how CGEM collects feedback and contributes to building the capacity of the private sector; how CGEM prioritizes reforms in light of the development road map stipulated in political campaign pledges; modalities of how CGEM engages with the international business community, multinational corporations (MNCs), small and medium size enterprises (SMEs) and trade unions.
Morocco Economic Development Zones (MEDZ) Agribusiness Park in Meknes: Presentation and discussions on the MEDZ institutional set up; financing and role in establishing industrial, agricultural, offshore and touristic parks across twelve territories in Morocco
At the end of the knowledge exchange, a half-day session was held at the IFC offices in Rabat to reflect on the key lessons and their application back in Afghanistan.
Each morning before setting off to the day’s activities, the delegation met for a short debrief of the previous days’ experiences and key take-aways. This was a great opportunity to hear feedback directly from participants. The daily debriefs helped the World Bank team listen to and anticipate likely discussion topics for the half day reflection session which took place on the final day.
By creating two separate groups on WhatsApp, the World Bank team was able to effectively communicate with all participants as well as coordinate real-time logistics before and during the knowledge exchange visit. WhatsApp proved a very useful platform for participants to interact with each other and with the Bank team, share their views and memorable photos.
The knowledge exchange benefited from the support of IFC staff based in Rabat, Morocco. The team provided guidance and support in setting up meetings with leading institutions. Their local knowledge and relationships with the Moroccan institutions resulted in a warm reception and fruitful discussions with the Afghan delegation. The delegation was impressed by the generosity, professionalism and candor with which the Moroccan institutions shared their knowledge, experiences and innovative approaches.
Beneficiaries / Participants
The Afghanistan delegation comprising thirteen high-level officials was led by Mr. Shafiq Ahmad Qarizada, Senior Advisor to H.E. Chief Executive, Government of the Islamic Republic of Afghanistan - GoIRA.
- Senior Advisor, Office of H.E. Chief Executive, GoIRA
- Deputy Minister, Ministry of Economy
- Secretary General, Afghanistan International Chamber of Commerce
- Senior Economic Advisor to Minister, Ministry of Economy
- Director General-Coordination, monitoring and reporting, Ministry of Finance
- Director General, Ministry of Justice
- Deputy CEO, Afghanistan Chamber of Commerce and Industry
- DG-Planning & Policy Coordination, Ministry of Agriculture, Irrigation and Livestock
- Director General- Financial Inclusion, Da Afghanistan Bank (Central Bank)
- Director for Trade, Policy Analysis & Trade Promotion, Ministry of Industry and Commerce
- Senior Advisor to PRISEC, Afghanistan Center for Excellence
- Head of Secretariat, PRISEC
- Policy Advisor, PRISEC
World Bank Contribution
The design, planning and implementation of this knowledge exchange was a collaborative effort between teams from the World Bank and IFC to support ongoing IFC Advisory services to the Government of the Islamic Republic of Afghanistan (GoIRA). These groups were from Macroeconomics Trade and Investment (MTI) Global Practice, Finance Competitiveness & Innovation (FCI) Global Practice, Governance Global Practice and Development Economics (DEC) Vice Presidency Unit. Funding was provided through a South-South Facility grant. The IFC Advisory Services project provided co-financing to support the knowledge exchange as well as complementary follow-up activities to disseminate and adopt the key lessons learned.
A presentation of the knowledge exchange, experiences, good practices, and next steps for the executive committee of PRISEC was scheduled by end of fiscal year 2019. The team representative from the Ministry of Industry and Commerce committed to prepare updates on the proposed e-governance law and circulate to the rest of the delegation and the World Bank team within a month after the exchange visit.
New knowledge: The Afghan delegation gained knowledge on how to design and implement a business improvement reform process. They also benefitted from candid conversations with CNEA about the institutional and political challenges Morocco encountered during the reform process. CNEA shared good practices and examples of how some of these challenges were overcome. The delegation was exposed to the efficiencies and transparency of a one-stop-shop (PortNet) e-platform and zero-paper processes for registration, issuance of licenses and permits. It is hoped that once the e-governance law is passed in Afghanistan, it will help to expedite the digitization process. Developing resources such as investor guidebooks and a multi-lingual website were noted as value additions to supporting the private sector.
Morocco provided examples of good practice in supporting high-level female participation in business through leadership roles and inclusion of women in both corporate and SOE boards.
Insights gained: At the end of the visit, a facilitated half-day session took place during which the Afghan delegation and World Bank teams set aside time to reflect, share experiences and important lessons from the knowledge exchange. The main themes discussed included:
- A clear understanding of a well-defined reform process.
- Improved approaches to defining roles and responsibilities for institutions leading a reform process.
- The value of communicating government decisions, proposals and reforms using local languages to increase awareness among citizens living in various regions of the country.
- Ways to establish more ownership and accountability in the line ministries responsible for various aspects of the reform
- Though PRISEC has been engaging with private sector, they were introduced to more inclusive approaches that could strengthen the public-private dialogue in Afghanistan. The delegation agreed to explore ways to enhance private sector representation in the executive structure and formalize private sector participation in policy discourse.
- Key decisions, actions and next steps were discussed with roles and follow up timelines assigned.
Enhanced coordination: Learning from CNEA’s efficient and multi-layered management approach, PRISEC representatives discussed the possibility of reducing the existing structure of the coordination and policy units to enhance efficiency and high-level political support.
Improved actions: Following the approval of The Afghan Women Chamber of Commerce and Industry (AWCCI) by the High Economic Council, the delegation identified and will propose some practical ways to help increase women representation and participation as board members in Afghanistan.
Due to the limited data and baselines, it remains difficult to make decisions and measure investment related targets in Afghanistan. The delegation nominated two officials to lead the process of identifying and proposing the types of business surveys needed to improve data quality and establish more reliable baselines.
Moroccan partners were the following:
- The National Committee for Business Environment (CNEA)
- Secrétariat Général du Gouvernement
- The Department of Commerce and Customs
- Municipalité de Casablanca
- Regional Center for Investment of Casablanca (CRI de Casablanca)
- Confédération Générale des Entreprises du Maroc (CGEM)
- Morocco Economic Development Zones (MEDZ)