SIGAR

ECONOMIC AND SOCIAL DEVELOPMENT
insufficient infrastructure, declining global commodities prices, and inadequate
capacity at the Ministry of Mines and Petroleum (MOMP) have all
hampered the development of this sector. 653 Additionally, the MOMP has
lacked a permanent minister since March 2016, leading some to suggest that
the national unity government has not prioritized this industry. 654
USAID cited other issues contributing to investor uncertainty: regulations
to support implementation of the new mining law passed in November
2014 are still being developed; amendments to the law and several mineral
tenders agreed to in 2010 and 2011 remain unsigned by President Ghani;
and a combination of corporate income taxes, export and import duties,
production royalties, and other charges that constitute an uncompetitive
levy of about 80% on mineral production. 655
Although geological surveys show that Afghanistan has significant mineral
resources, mining has so far contributed only slightly to the country’s
GDP. 656 Actual government receipts from minerals activity in FY 1394 (2015)
were only about 38% of the budget projection. 657 In the first 11 months of
FY 1395, actual receipts were AFN 1.2 billion (approximately $18.3 million)
largely due to royalty fees and the sale of minerals. This is a 98.5% increase
compared to the same period last year. 658 The Afghan government, however,
had set a $400 million revenue target for the MOMP in 2016. 659
Illegal Mining
The MOMP contends illegal extraction is taking place at 1,400 mining sites
across Afghanistan, but others estimate the country has 2,000–3,000 illegal
sites. 660 Illegal mining steals non-renewable natural resources, damaging
Afghanistan’s economic development. 661 The Afghan government estimates
$300 million in revenues is lost annually by illegal mining, which not only
denies Kabul much-needed funds, but also fuels the insurgency and drives
criminality. 662 This quarter, the UN reported that the Taliban controls many
illegal mining sites, particularly those located in Afghanistan’s south and
east, which provides them a significant income stream. The Taliban are
involved in illegal mining in three ways: extraction (control of mining operations),
extortion (threatening or committing violence if not paid off), and as
service providers (transport and smuggling). 663
Hydrocarbons
Afghanistan’s efforts to develop its oil and gas reserves focus on the Amu
Darya Basin and Afghan-Tajik Basin, both in northern Afghanistan. 664
Afghanistan has only small-scale topping plants—early-stage refineries that
can process only limited petroleum components of crude oil—and remains
heavily dependent on fuel imports. 665 Oil and gas represent roughly onefourth
of all annual Afghan imports, or approximately $1.5 billion. 666
USAID’s implementing partner for the now-completed Sheberghan gasdevelopment
project reported that “sufficient levels of proven reserves
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