Kurdistan Region Presses for Payment: Federal Government Owes over IQD 9 Trillion to Kurdistan Region
The Kurdistan Regional Government (KRG) has issued a statement providing comprehensive data indicating the Iraqi government's failure to disburse the owed budget of IQD 9,378,000,000,000 to the Kurdistan Region, as mandated by financial agreements.
According to the statement, the Kurdistan Region's designated portion from the 2023 federal budget, intended for monthly disbursements, totals IQD 16,497,000,000,000.
In 2023, the KRG received only IQD 998 billion from the federal budget and obtained another IQD 3,700,000,000,000 in loans from Baghdad, disbursed in five instalments throughout the year.
Regarding financial obligations to the federal government, revenues from oil sales were remitted to the federal Ministry of Finance until March 25, 2023, when the KRG ceased independent oil sales. These revenues, audited by Deloitte International, amounted to IQD 1,693,000,000,000 after deducting production and transportation costs and company shares.
Additionally, in accordance with Article 21/2 of the Federal Public Budget Law No. 13 of 2023 and Article 29 of the Federal Financial Management Law No. 6 of 2019, the Kurdistan Region is obligated to pay 50% of its border revenues to the federal treasury, totalling IQD 728,000,000,000.
Consequently, the total disbursed amount to the KRG in 2023 was IQD 7,119,000,000,000, encompassing the federal budget allocation, loans, KRG's share of federal non-oil revenues, and oil revenues until March 25, 2023.
The outstanding share owed to the Kurdistan Region for 2023 stands at IQD 9,378,000,000,000, and it is incumbent upon the federal government to disburse this amount per the stipulations of the 2023 federal budget.
We would like to highlight the following observations:
Regarding the Kurdistan Region's entitlements from administrative expenditures, these entitlements are provided in goods such as food rations and medicines. However, the region has not yet received its allocated shares of these goods. Detailed data and information on this matter are available from the KRG's Ministry of Trade and Industry and Ministry of Health.
To date, the KRG has not received any portion of sovereign expenditures, including salaries for the Peshmerga forces, a component of Iraq's security apparatus.
Between June 25, 2023, and November 30, 2023, the KRG's Ministry of Natural Resources produced and delivered 12 million barrels of oil to the Federal Ministry of Oil. However, the federal government has failed to fulfil the associated production, transportation, and payment costs to the producing companies in the Kurdistan Region.
An extensive audit of oil and non-oil revenues and expenditures for the first six months of 2023 was jointly conducted by the Iraqi Federal Board of Supreme Audit and the Board of Supreme Audit of the KRG. This collaborative effort is ongoing, with both teams working to complete the audit for the latter half of 2023. A comprehensive report detailing the final audit results for the entire year will be submitted to the federal government upon completion.
The Trial Balance for 2023 from all units, departments, and directorates within and outside the KRG ministries has been promptly submitted to the Accounting Department of the Federal Ministry of Finance.
The halt in oil exports from the Kurdistan Region since March 25, 2023, has resulted in significant losses to the federal treasury of Iraq and to the oil-producing companies operating in the Kurdistan Region, estimated to exceed $10 billion.
Department of Media and Information