Strengthening Public Finances and Financial Markets in Iraq

Project description

Title: Strengthening Public Finances and Financial Markets in Iraq
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Co-funded by: European Union (EU)
Country: Iraq
Lead executing agency: Ministry of Finance, Central Bank of Iraq
Overall term: 2021 to 2024


Iraq is undergoing political, social and economic transformation, which is marked by many setbacks and is revealing the country’s institutional shortcomings over and over again.

Iraq is highly dependent on oil: almost all state revenue comes from exporting oil. The country has one of the world’s weakest public finance systems.

Private sector financing is also insufficiently developed by international comparison. The public has little confidence in financial intermediaries like state and private banks and other financial service providers. State actors dominate private sector momentum and are undermining the country’s economic recovery.


Public finances in Iraq are improved and its dependence on oil is reduced.


With the help of European Union cofinancing, the project works in four areas:

  1. Together with the Ministry of Finance, the project is drafting a tax reform and modernising the existing registration system to reduce the financial dependence on oil exports.
  2. It is improving the public finance system (draft budget, management and control). At the same time, the project is creating a body, the supreme auditor, to effectively monitor the distribution and use of financial resources.
  3. It is supporting organisations that uncover and prevent money laundering. Working with the Department for Anti-Money Laundering and Countering Financing of Terrorism Office and the Federal Integrity Commission, the project is also drawing up risk analyses for money laundering in the financial sector.
  4. Together with the Central Bank and various banks and digital financial intermediaries, it is improving lending to the private sector, especially for small and medium-sized enterprises.

Last update: March 2022