The Role of Small Medium-Sized Enterprises in Economic growth of Afghanistan Challenges and opportunities
By: Sayed Nasratullah Musswy
Abstract
This paper examines the role of Small Medium-sized Enterprises (SMEs) in the economy of Afghanistan. Even though SMEs in Afghanistan, as a least developed country, are an engine of economic growth, they are in a fragile state due to several obstacles, including political instability, insecurity, corruption, informality, and a few others. The private sector is dominated by SMEs, estimated 98.5 percent of the business, and contributes considerably to Afghanistan's economic development (20 percent of gross domestic products per capita). In Afghanistan, informality plagues SMEs, with nearly 70 percent of them operating in the shadow economy. This study highlights the Afghanistan SMEs' strengths, weaknesses, opportunities, and threats. Therefore, this paper recommends that the government should get involved in developing policies to assist SMEs in flourishing in the country’s economy.