Iraq has achieved upper-middle-income status due to its oil wealth, with public revenues heavily reliant on oil. However, the private sector remains underdeveloped, and fluctuations in oil prices and potential declines in global demand highlight the need for economic diversification. To reduce its dependency on oil, Iraq must focus on unleashing the potential of its private sector, empowering state institutions, and reinforcing the rule of law.
The Strengthening of Public Finances and Financial Markets (FFM) project supports Iraq’s government in enhancing financial and fiscal governance systems. This initiative aims to strengthen macro-fiscal stability and foster economic development. The project addresses governance and management in both Iraq’s public and private financial sectors. It is co-financed by the European Union (EU) and Germany, under the Team Europe Initiative (TEI) “TeAm Europe For Iraq” (TAEUFIQ). Team Europe Initiatives are collaborative efforts supported by the EU, working closely with member states, embassies, and institutions involved in implementation and financing. Germany serves as the partner for the FFM project.
The project partners with several key Iraqi institutions, including the Ministry of Finance (MoF), the Iraqi Parliament, the Federal Board of Supreme Audit, and the General Commissions for Taxes and Customs. Additionally, the Financial Intelligence Unit, the Federal Commission of Integrity, and the Central Bank of Iraq (CBI) are involved, alongside state and private banks, financial intermediaries, and small and medium-sized enterprises (SMEs).
With Iraq’s population of 45.4 million people (2024), the FFM project aims to improve governance, macro-fiscal stability, and overall economic development. It focuses on building capacity at individual, organizational, and institutional levels. Given that over 90% of government revenue comes from oil, the project is also focused on reforming the tax and customs systems to diversify national revenue sources and reduce reliance on oil.
