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Signs of economic growth in Helmand province

1 October 2008

 

Helmandi farmers await their induction briefing at the Helmand Islamic Investment and Finance CooperativeAfghanistan's Helmand province is starting to show the first signs of economic growth, thanks to international support for initiatives aimed at the region's farmers and businessmen.

The southern province is one of the country's most fertile areas, but its economy depends on illegal money from opium poppies. As part of the fight against the drugs trade in Afghanistan, DFID is helping farmers to grow other crops. Not only does this provide them with a legitimate and sustainable income, it also supplies the region as a whole with much-needed food.

Instrumental in giving farmers a boost in the right direction have been DFID-supported small loans. Money is provided to the World Council of Credit Unions (WOCCU) through the Afghan Government, before being distributed by cooperatives to the region's farmers to expand their businesses.

So far, DFID has helped provide over £100,000 of loans to over 230 clients in Helmand through these Islamic Investment and Finance Cooperatives (IIFCs). The IIFCs are owned and controlled by the farmers themselves.

Investments pay off


Abdullah Aminullah (pays his deposit to join the Helmand Islamic Investment and Finance Cooperative so he can receive his loanFarmer Abdullah Aminullah, 20, earns a living from the fruit and vegetables he grows, which he sells from his shop in the town of Lashkar Gar.

Through a loan of 55,000 Afghanis (around £651), Abdullah has been able to buy the seed, fertiliser and other materials needed to take his business to the next level. He expects to pay the loan back within nine months.

"I have 20 people in my family, including my grandparents, brothers and sisters," he says, "and the loan will help me to make more money to provide for them."

"Food prices have gone up recently," he adds, "which means I can make more money from some of my produce - but I also have to pay more to feed my family."
 

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Delivering progress

Helmand Islamic Investment and Finance CooperativeDFID’s partnership with WOCCU is part of a broader £30 million package of assistance for agricultural and rural development in Helmand. Other activities will support the production and marketing of local produce such as fruits, nuts and vegetables, increase access to safe drinking water and irrigation, and build roads so that farmers and entrepreneurs can get their goods to market.

Helped by DFID's work, economic conditions in the province are improving. In 2007 Helmand's first commercial bank was opened in Lashkar Gar, and, in the last year, the US development department USAID has played a key role in organising two successful agricultural fairs. These showcased local produce to over 4,000 people from across the region.

DFID’s activities in the province are closely coordinated with those of USAID. A current US project to regenerate Lashkar Gar’s Bost Airfield will provide further opportunities for producers to get their goods to customers around the country. By the end of the year, the project (which began in July and is worth $45 million) will have delivered a new runway.

As part of the same project, a USAID-sponsored agribusiness park is due to open at the airfield site in 2009. This has already attracted $6 million of investment from private companies, which will go towards the construction of an oilseed press.

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