How the Afghan government can attract local/ international investors for public initiatives and projects in Afghanistan

The Afghan government would like to attract investments into public initiatives across most key industries. This article guides individual Ministries and their staff to effectively define, explain, and promote investment opportunities.

Understand the situation

Afghanistan is a sanctioned country. Many countries and their respective countries are not allowed or have difficulties to officially invest in Afghanistan. Therefore, the number of potential countries and companies that can directly invest or operate in Afghanistan is limited.

Understand the needs and objectives of investors

Investors are not humanitarian relief organizations, charities, donors, or NGOs. Investors, by definition, have the mandate from their shareholders to maximize return on their money. Investors are serious, fact-based, number-driven, result-focused individuals.

Investors will screen and analyze investment opportunities across different countries and choose the most suitable for their shareholders.

Understand how investors work

Investors analyze overall returns, profit margins, risk premiums, cash flow projects, total life time value of the project, opportunities to diversify, tax benefits, impact on target population, ease to do business, security, comfort of their people to operate in the target country, availability of materials, support services & supply chains, availability & cost of human resources, political & economic stability, and many more aspects.

Then they evaluate the suitability of their investment and compare it with many other possible investment opportunities.

They will rank all investment opportunities and focus on/ invest in the most attractive opportunities.

Understand that Afghanistan competes against all other countries for limited investor money

Every countries wants international investors to invest in their country. There is constant competition for foreign direct investments. Some countries attract much more investments than other countries. Often it is NOT that those countries are the best countries to invest, but rather they use a very systematic and effective approach to attract investors, create specific investment opportunities, explain step-by-step of how the investor will be successful, and demonstrate practical full end-to-end support for the investor.

Example: The Ministry of Investment of Saudi Arabia asked the author of this article, Alex Steinberg, to develop a plan to increase the direct foreign investors by tens of billions of dollars. Alex developed a systematic step-by-step plan that defined suitable investors, attract those investors, convince those investors, and support those investors throughout their investment journey of several years.

Move from “waiting for investors to come” to “actively define and effectively promote investment opportunities”

Sitting in the office and waiting for investors to schedule meetings with the Ministers to present their investment plans is not very effective to maximize investments to Afghanistan. Why would serious investors do all the extra efforts when many other countries provide a so much better support & service?

A much better result may be achieved if Afghanistan ministries do the necessary effort: Reach out directly to potential investors, present specific investment opportunities (supported by fully detailed information packages), and then support investor decisions with designated industry experts.

An example of how some current Ministry procedure does not lead to desired outcome:

A renowned international expert meets with a deputy minister in Kabul: The international expert hopes to discuss the specific industry need and to jointly develop a practical solution for the Ministry. After the conversation that is clearly translated and witness by a half a dozen people, the Deputy Minister promises “full support”.

The international expert asks for industry information (that should be readily available) and to meet with the Minister’s advisors to discuss in detail. Unfortunately: No information is provided. Ministry industry advisors seem to not exist/ not be available. Instead, the international expert is told to develop a solution himself and then present a report. Which the international expert understandably does not create as he did not receive any required support from the Ministry.

So, the ministry continues to wait on other organizations & investors to spend all the effort themselves to solve the ministry’s problems and do their work...

Guidance for ministries in Afghanistan to attract more investors to key initiatives & projects in their respective industries:

1.????? Identify and describe key initiatives and programs of the specific ministry & industry

2.????? Highlight specific projects where investors can invest

3.????? As applicable offer Private Public Partnership (PPP) models

4.????? Compile a full information package on each project (necessary capital investment, revenue, cost & profit projections, subsidies, land, tax advantages, other government support, etc.)

5.????? Compile and provide written case studies and success stories of previous investors

6.????? Provide helpful advice and resources to successfully do a specific project: contact information to potential suppliers of materials & services, human resources, other support services

7.????? Designate qualified experts to work with potential investors through their business planning & decision making

8.????? Designate one leader & coordinator for all matter concerning this type of projects

9.????? Develop and set up a systematic Ministry program to manage all efforts to attract, support, and manage all investors

Conclusion

Government ministries need to spend diligent effort to attract and support investors in all their needs if they want to increase foreign direct investments into Afghanistan. Ministers and their staff do well to understand that they compete with many other countries for investments!

The article offered insights how investors work and what information they need. The author shared best practices.

The author is willing to work with all ministries to help them set up systematic programs to effectively attract and work with local and international investors.

Connect with/ contact Alex Steinberg directly at WhatsApp +966 531824178 to schedule a meeting for expert exchange & discussion. Note: Alex is in Kabul (but keeps his foreign WhatsApp number)

About the author Alex Steinberg

Alex Steinberg has helped develop, lead, execute, and advise large programs & projects for many companies in highly industrialized and developing countries.

Alex has helped develop systematic programs to attract foreign direct investments worth billion of dollars. He has also developed customized solutions for businesses to raise funding from local private investors.

Alex has helped build organizations and countries by conceptualizing and delivering strategies, programs, initiatives, and solutions end-to-end across key industries.

Alex is currently in Kabul, identifying opportunities and developing solutions to help build Afghanistan. Alex is coming as an expert advisor to work alongside with government, businesspeople, NGOs, and other parties. Much of his time he invests into aspiring entrepreneurs and company leaders to build successful, profitable organizations that impact millions of people in Afghanistan. His key objective is to build a strong private sector that is able to serve the Afghan needs while creating jobs in a sustainable way.

Legal Disclaimer

This article reflects the opinion of Alex Steinberg only. It does not claim to represent the viewpoints of any present/ former client, employer, or partner. The author acknowledges that there are often different viewpoints on a topic, which are equally valid. Constructive discussion rather than criticism can lead to better ideas and positive outcome & value to business and society.