Outcome AFG_D_1.2

By the end of 2025, more people in Afghanistan will benefit from an increasingly stable, inclusive, and employment-rich economy, with greater equality of economic opportunities and more resilient livelihoods, increased food production, and improved natural resources management.

In 2024, the economic outlook for Afghanistan remained highly uncertain , with the threat of stagnation looming large until at least 2025. The country remains isolated from the global economy, with continued high poverty rates and tighter restrictions on women’s economic activities. Together, these factors are holding back the Afghan economy and preventing it from tracking to a path of sustained growth. [1] If what remains of the Afghan economy is to be salvaged and growth achieved, women would need to play a pivotal role in this rebuilding process. However, participation of this group in this effort continues to be hampered, with women across Afghanistan forced to abide by increasingly restrictive written and verbal decrees and bans that limit their full economic participation . This curtailment comes in addition to Afghan women facing many distinct technical obstacles to accessing many types of employment compared to men – such as lower levels of literacy, lower mobile telephone/electronic device ownership, and lower access to the internet The bans on education for girls and women and the shrinking of the pool of jobs potentially available to Afghan women is estimated to have reduced, in the first year of DFA control of state power alone, the national gross domestic product (GDP) by 2.5 per cent (approx. US$500 million). [2] Indeed, by 2066, the Afghan economy is projected to lose an estimated $9.6 billion if the ban on women’s access to higher education remains in place. [3] The dampening of the Afghan economy occurring due to this concerted hampering of the work force participation of such a large segment of the population is being exacerbated by the extension of the ban on higher education for women to previously exempt areas of the health sector in late 2024. Within this wider narrative of underutilized and hampered labour participation, there also continued to emerge during 2024 a monumental shift in the extent to and ways in which Afghan women contribute to the national economy. While women have historically been excluded from the Afghan labour force (to varying extents), their participation has grown threefold between 2020 and 2023, with most women workers engaged in home-based activities such as garment production and food processing. [4] This is largely due to the dire economic and humanitarian situation in country, rather than a shift in social norms or attitudes or an enabling environment to women’s participation. However, the change is nonetheless marked and may lead to, among other impacts, a fundamental shift in the makeup of the Afghan labour force and modes of production in the long term. Women predominantly work for women-owned businesses. A recent survey showed that the number of firms without women employees reached 50 per cent in 2024, [5] while the number of registered women-owned and -led businesses continued to increase (to 9,162, a more than threefold increase since 2020). [6] Women-owned businesses are less resilient than firms owned by men, being 3.5 times more likely to shut down due to vulnerability shocks. [7] Afghan women also face more challenges in engaging with the DFA on issues relating to their businesses, with 60 per cent of women-owned businesses surveyed in 2024 reporting experiencing unresolved issues with the DFA. [8] The experience of gender discrimination inhibits the growth potential of women-owned and -led businesses Women in Afghanistan are less likely than men to have access to credit, loans, and financial institutions, tending to rely more heavily upon support from local friends and family members as a key source of income. Only 5 per cent of women-led small or medium-sized businesses report receiving loans from formal banks , with 61 per cent reporting receiving a loan from family. A 2024 survey showed that 70 per cent of women-led businesses surveyed operated without a licence, in the informal sector, rendering them ineligible for lending through formal financing mechanisms due to bank loan access rules. [9] Mobility restrictions limit women’s access to markets , and women-only markets have closed in many areas. Where women-only markets remain operational, mahram requirements for both buyers and sellers impose (im)practical impediments to the emergence of a healthy business climate. Against this backdrop, the ACO explored during 2024 new entry points to empower unskilled, skilled and educated Afghan women . In this pursuit, UN Women forged 20 partnerships with CSOs, international organizations, private firms and UN entities, to achieve impactful results. Examples of key results achieved by the ACO under Outcome AFG_D_1.2 during 2024 are presented below. Direct WEE support for 12,716 Afghan women , including sole traders and owners of larger businesses, through various context-responsive interventions. 5,010 women entrepreneurs operating micro, small and medium enterprises (MSMEs) supported to develop, expand and sustain their businesses. Among those served, 600 women entrepreneurs were facilitated to access financing to start and/or scale up their business through 30 Village Savings and Loan Associations (VSLAs), which generated savings of $29,138 and loans amounting to $34,314, contributing significantly to their business development. Additionally, 235 women MSME entrepreneurs were supported with e-commerce opportunities, including the creation of e-marketing platforms. 2,732 vulnerable and at-risk women reached with strengthened capacity on income-generating activities across different sectors, including handcraft, tailoring, farming, food processing and production. 4,845 women gained or retained employment opportunities as a result of UN Women-facilitated engagement with private sector firms. 129 women were trained as trainers in business, marketing, and financial education, providing them with alternative income-generation opportunities (as trainers). 5 women-only markets were supported – 3 in Bamiyan province and 2 in Balkh ­– by UN Women small refurbishment projects and solarization. Approx. 45,090 women benefited through employment directly in women-led MSMEs supported by UN Women or indirectly, through increased household income generated by women working in these MSMEs. [1] World Bank. 2024. Afghanistan Private Sector Rapid Survey (round 3) . [2] UNICEF. 2022. ‘Depriving girls of secondary education translates to a loss of at least US$500 million for Afghan economy in last 12 months.’ Press release. 14 August 2022. [3] UNESCO. 2023. Costs of continued suspension of women’s access to higher education and work in Afghanistan . [4] World Bank. 2024. Afghanistan Private Sector Rapid Survey (round 3) . [5] Ibid. [6] Haidar, A. 2024. ‘4-fold rise in number of businesswomen in 3 years: AWCCI.’ Pajhwok Afghan News. 18 January 2024; Wafeq, M. 2022. ‘Afghan Women Entrepreneurs Battle to Retain Economic Freedom.’ Just Security, 26 August 2022. [7] World Bank. 2024. Afghanistan Private Sector Rapid Survey (round 3) . [8] Ibid. [9] UNDP. 2024. Listening to Women Entrepreneurs in Afghanistan .

By the end of 2025, more people in Afghanistan will benefit from an increasingly stable, inclusive, and employment-rich economy, with greater equality of economic opportunities and more resilient livelihoods, increased food production, and improved natural resources management.

While UN Women achieved some progress towards this Outcome, in 2023, economic decline continued to affect all sectors of the Afghan economy, though the decline has been slowed compared to 2022. Services, which made up 45 per cent of the national GDP, shrank by 6.5 per cent, following a sharp 30 per cent drop in 2022. The agriculture sector, which accounted for 36 per cent of GDP, declined by 6.6 per cent in 2023 due to unfavorable weather conditions and farmers’ lack of resources to cope with the crises affecting their activities. The industrial sector also saw a contraction (of 5.7 per cent) in 2023, as businesses – especially those owned by women – faced closures due to limited access to resources and financial challenges. Analysists estimate that the “No-conflict" dividend in Afghanistan is spent: the economy still depends heavily on external support and lacks a self-sustaining pathway for recovery. [1] Women’s income security was drastically impacted by the fall of Kabul in August 2021, and women’s livelihoods continue to be threatened by the impact of bans and decrees infringing on the rights of women and girls. Despite this economic decline, an increase in economic activity among women has been observed. Not surprisingly, given the reduced labour demand and constraints on women’s economic activity imposed by the de facto authorities (DFA), the increase in economic activity among Afghan women has mostly occurred within the bounds of their homes. An increasing number of women are employed in the manufacturing sector, particularly in garment and food processing activities. In this context, UN Women is contributing to women’s economic engagement, and utilizes the potential of women’s economic empowerment to counterbalance the systemic exclusion of women and girls from all spheres of life in Afghanistan. For example, under a pilot initiative, UN Women worked with a private consulting firm to enhance access to employment opportunities for skilled women in Afghanistan. Pledges and expressions of interest to provide internship opportunities to Afghan women were secured from select companies, while others expressed willingness to contribute to discussions on women’s economic participation. UN Women – together with other UN agencies - also supported current and aspiring women business owners and entrepreneurs, who are facing complex administrative and social barriers to develop, sustain and strengthen their businesses, and to access credit and markets. UN Women regularly meets with Afghan businesswomen in different parts of the country to learn about economic opportunities they would like to pursue, and to tailor support accordingly. UN Women also expanded partnership with other UN entities to create job opportunities for women within micro, small and medium enterprises through the “Roads to Decent Jobs” project implemented in partnership with ILO. Under this partnership, using a Market System Development (MSD) approach, women owned MSMEs are empowered not only to become self-sufficient but also to create jobs for women. UN Women’s approach to economic empowerment will thereby continue to go beyond increasing women’s income and is anchored in changing the social norms that govern a women’s ability to influence decision making. UN Women will continue to use economic empowerment as a programming entry point in Afghanistan, contributing to ongoing work on countering the diminishing pathways for women’s economic participation, and, by extension, on stimulating economic recovery. [1] Afghanistan-Development-Update-20231003-final.pdf