Iraq Seeking More Loans and Grants to ‘buttress’ the Budget

The Finance Ministry says it is seeking more loans and grants to ensure that it can cover expenditures, particularly the salaries of public sector employees.

Imad al-Naib, Director-General of the ministry’s Accountancy Department, did not say how much the salaries of  public sector personnel cost the government a year. However, they are believed to devour a substantial sum of the country’s oil revenues.

Iraq has a large public sector, which includes the army and security organs. It is by far the country’s largest employer.

“Loans are very important for Iraq to buttress the budget and provide resources to spend on operational expenditures and salaries across the offices run by the state,” Naib said. “Loans make additional income available for the treasury.”

Iraq relies almost solely on oil revenues for its hard currency earnings, but latest gyrations in oil prices are said to have added to budget strains.

“We are looking forward to obtaining more loans … mainly from donor countries,” Naib said.

He said Iraq has already received $440 million as the first installment of a $3.6 billion loan from the Monetary Fund.

Naib said the rest of the money should be ferried to the central bank by the end of 2011.

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