Why is Taliban relying on cement production to achieve Afghan self-reliance

The Taliban government in Afghanistan is heavily banking on cement production as its first step towards achieving economic self-sufficiency, signing at least three contracts with private companies since returning to power in 2021.

Despite limited external support, the Taliban has pursued self-funded infrastructure projects, implemented anti-corruption measures, and stabilised the national currency, thereby averting an economic collapse.

The Taliban now wield more authority over Afghanistan than any other entity has since the late 1970s.

Over the past two years, violence has decreased as the Taliban quelled minor uprisings, including those from the Daesh group’s local branch in the eastern regions and anti-Taliban groups in the northern areas, according to International Crisis Group.

This enhanced security has enabled aid workers to venture into previously inaccessible areas and facilitated smoother trade routes.

Moreover, parents express fewer worries about their children's safety while attending school, leading to a rise in enrollments overall, despite the bans on secondary education for girls, the percentage of Afghan girls attending primary school rose from 36 to 60 percent.

However, due to their reluctance to engage in dialogue regarding these bans, the group faces sanctions, and the country’s foreign reserves remain frozen in overseas accounts. The Taliban struggle with international transactions for Afghan businesses and are unlikely to gain a UN seat in the near future.

Despite these challenges, they have managed to sustain basic operations such as paying civil servants and importing electricity while also allocating funds for limited infrastructure projects.

Taliban officials said that the three agreements with international and local companies include reconstructing cement factories in Parwan, Herat, and Kandahar provinces.

In October last year, the Qatar-based Al-Falah Global and International Task Group was awarded the contract to expand the Jabal Siraj cement plant in collaboration with the local engineering firm Awfi Bahram.

This initiative aims to increase the plant's production from 30,000 tons per year to 1.5 million tons annually, achieving a fifty-fold increase at a total project cost of US$220 million.

“Both the contracts of Herat and Kandahar have been signed with local (Afghan) companies and investors, but the contract of Jabal Saraj Cement project has been signed with Qatari investors,” Humayoon Afghan, a spokesman of Afghanistan's Ministry of Mines and Petroleum, tells TRT World.

“All of them will invest around $450 million…and these contracts are for 30 years. Each factory will produce around 1.5 billion tons of cement annually.”

He adds that Afghanistan possesses all the necessary raw materials for cement production, including coal.

At present, Afghanistan spends hundreds of millions of dollars on cement imports annually.

However, once the three factories become operational, the country will fulfil its own cement needs. Instead of importing, Afghanistan might even have the capacity to export cement.

Analysts say that it will significantly transform Afghanistan's ability to become self-sufficient.

“We can say that on a daily basis, Afghanistan produces around 900 tons of cement, which cannot even meet one-tenth of Afghanistan's cement needs. If the factories resume and new investment happens, cheap cement will be available in the markets,” Nazak Mir Zyarmal, an Afghan economic expert, tell TRT World.

“Then we will not be obligated to import cement, and Afghanistan will be self-sufficient without having to rely on neighbouring countries.”

Afghanistan boasts significant deposits of coking coal, primarily along a Jurassic belt stretching from the northern provinces of Takhar and Badakhshan through the country's centre and extending westward towards Herat.

Coal is used as an energy source in cement production as large amounts of energy are required to produce cement. Kilns usually burn coal in the form of powder and consume around 450g of coal for about 900g of cement produced.

Currently, only Ghori Cement in Baghlan province and Jabal Saraj Cement in Parwan province are operational in the country in a limited capacity.

“Cement currently enters Afghanistan from Tajikistan, Iran, and Pakistan, despite Afghanistan having cement factories established before these neighbouring countries,” Zyarmal said.

“Unfortunately, these factories have operated at the same little capacity for decades without any improvements, and successive governments have neglected efforts to expand their capabilities,” he tells TRT World.

“Consequently, as cement demand in Afghanistan has risen over time, imports from neighbouring nations became necessary to meet the growing needs.”

Efforts at self-sufficiency

On March 25, a team from Pakistan’s Ministry of Commerce arrived in Kabul to begin talks on improving trade relations after months of friction between the two neighbours.

For decades, Pakistan had been Afghanistan's primary trading partner.

But escalating violence by militants along the border prompted Pakistan to erect trade barriers even as Islamabad veered away from its previous policy of supporting the Taliban.

Islamabad accuses the interim Afghan administration of providing support to the Tehreek-e-Taliban-e-Pakistan (TTP), which it claims is using Afghan soil to plot cross-border attacks against Pakistan. Kabul denies this and says it does not allow anyone to use the territory of Afghanistan against Pakistan.

Additionally, Pakistan, along with Iran, expelled hundreds of thousands of Afghan refugees.

The Taliban government has tackled corruption at customs points, leading to increased revenue compared to previous administrations.

However, their revenue growth relied heavily on coal exports to Pakistan, which declined in the latter half of 2023 due to escalating tensions along the border.

“The investment in cement will not be a game-changer geopolitically as cement is commonly found in every country. However, domestically, it will benefit Afghanistan greatly in many ways,” says Matiullah Faeeq, Senior Research Fellow at Biruni Institute.

“Afghanistan has been in a prolonged state of war for over 45 years, and reconstruction of vital infrastructure like roads, bridges and houses are a priority,” he tells TRT World.

“Currently, Afghanistan imports most of the cement it needs. These cement factories are expected to enable Afghanistan to export the excess production, reducing its trade deficit.”

Furthermore, any foreign investment in Afghanistan is a sign of confidence in the country, Faeeq adds, encouraging both local and foreign investments in other sectors ultimately leading to job creation and unemployment reduction.

Afghanistan is in a state of transition and, as one of the least developed economies in the world, needs huge investments in infrastructure projects to boost its economic growth, alleviate poverty, and achieve social development.

“Cement is essential for constructing buildings, bridges, roads, dams and other infrastructure projects. These projects will enable the creation and maintenance of transportation networks, energy grids, and water supply systems,” Faeeq says.

“It is expected that urbanisation in Afghanistan will continue to increase from 26 percent in 2022. As the population moves to cities, there will be a growing demand for housing and commercial buildings as well.”