Iraqi PM Launches Ambitious Banking Sector Reform, 9 APRIL

 Iraqi PM Launches Ambitious Banking Sector Reform

Prime Minister Mohammed Shia' Al-Sudani addressed the Conference on Reforming the Iraqi Banking Sector on Monday, outlining an ambitious agenda to modernise Iraq's financial infrastructure and promote sustainable economic development.

Key initiatives and achievements highlighted in the Prime Minister's address include:

• Implementation of a three-year national budget, enabling long-term planning and strategic investment in health, education, and infrastructure.
• Efforts to diversify revenue sources by automating customs with the Automated System for Customs Data (ASYCUDA) system and improving tax systems, resulting in a 128% increase in customs revenues and 22% rise in tax revenues.
• Structural reforms of Rafidain, Rasheed, Industrial, and Agricultural Banks, supported by an international consultancy firm.
• Enhancement of digital payments infrastructure and partnerships with leading fintech companies, facilitating broader access to financial services.
• Expansion of financial inclusion, with rates rising from 10% to over 40% in two years-an achievement recognised by the World Bank and IMF.
• Updated legislation on e-commerce and digital payments and nationwide campaigns to foster a digital payment culture.
• Continued support for SMEs through financing and resource allocation, contributing to job creation and economic growth.

Al-Sudani reaffirmed that banking reform is a central pillar of his government's broader economic reform programme. He confirmed the launch of a comprehensive strategic initiative in collaboration with the Central Bank to align Iraq's banking system with international standards, strengthen global engagement, and attract new partnerships.

He concluded by reiterating the government's readiness to support both local and international stakeholders in transforming the banking sector to drive economic progress and financial stability.

Full statement from the Media Office of the Prime Minister:

Prime Minister Mohammed S. Al-Sudani attended the Conference on Reforming the Iraqi Banking Sector, held today, Monday.

His Excellency expressed appreciation for all efforts that contributed to organizing this conference, which presents visions and ideas aimed at developing Iraq's banking sector, promoting sustainable development, and enhancing Iraq's economic standing and its regional and international roles. He also commended the efforts of the Central Bank of Iraq, the banks, and the teams from international and local consulting firms for their ongoing work in strengthening and advancing Iraq's financial and banking sectors.

Prime Minister Al-Sudani noted that the government assumed responsibility during a complex economic period, which required decisive actions to achieve stability and ensure growth. He outlined the achievements realized in financial, banking, and economic fields as positive steps toward establishing solid foundations for development and capitalizing on prevailing stability.

Key highlights from the Prime Minister's speech include:

• The government prepared a three-year budget that allocated resources to key sectors such as health, education, and infrastructure.
• The three-year budget has enabled a long-term financial planning framework to help achieve the strategic and developmental objectives of the state.
• The government worked to boost revenues by improving the taxation and customs systems and enhancing non-oil revenues, helping reduce dependence on oil exports.
• Full automation of the customs system is underway through the implementation of the global ASYCUDA platform, developed under the United Nations.
• Customs revenues increased by approximately 128%, while tax revenues rose by about 22%-both higher than previous years.
• Ambitious projects have been launched to reform state-owned banks and improve their capacity to deliver financial services to individuals and businesses.
• Over the past two years, the Cabinet issued several decisions to restructure the Rafidain, Rasheed, Industrial, and Agricultural Banks with the support of a reputable international consultancy.
• The government enhanced the infrastructure for digital payments and transactions by strengthening protocols and systems to facilitate electronic payments across sectors.
• Partnerships were established with leading fintech companies to offer innovative digital payment solutions, enhancing the efficiency of the financial system.
• The financial inclusion rate rose to over 40%, up from just 10% two years ago-an achievement recognized by institutions like the World Bank and the International Monetary Fund.
• E-commerce and digital payment legislation has been updated.
• Awareness campaigns have been launched to promote digital payment culture among citizens.
• Support was extended to small and medium enterprises through financing and resources, resulting in job creation and economic stimulation.
• The initiatives proposed aim to address current challenges in the banking sector and enhance its international competitiveness.
• Banking reform forms a vital part of the economic reform pillar in the government program.
• The government, in cooperation with the Central Bank of Iraq, launched a comprehensive initiative for integrated strategic banking reforms.
• These reforms aim to align with global developments, open new partnerships, and enhance engagement with the global financial system.
• The government is fully prepared to support all local and international entities and institutions in efforts to develop the banking sector and promote economic growth and financial stability.
• Tangible results have already been achieved, with successful expansions and advancements in Iraq's banking industry.

(Source: PMO)