## 1. Priority Recommendations

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**Canonical URL:** [1. Priority Recommendations](https://www.imf.org/-/media/files/publications/cr/2023/english/1irqea2023001.pdf)

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---

### Mission background and objectives
- Mission type and dates:
  - A Government Finance Statistics (GFS) Technical Assistance (TA) and Training mission took place remotely, during December 5–16, 2021.
- Mission leadership and team:
  - Nadine Aboukhaled (STA) — mission leader
  - Yousef Daqa (GFS expert)
  - Tareg Abdelgader (AMF)
- Purpose:
  - Support the Ministry of Finance (MOF) in implementing the national budget reform project and the strategic target on enhancing budget preparation and reporting in line with the Government Finance Statistics Manual 2014 (GFSM 2014) framework and its integration in the Integrated Financial Management Information System (IFMIS).
- Tasks performed:
  - Complete the mapping of the new chart of accounts (COA) with the GFSM 2014 classifications.
  - Initiate the compilation of expenditures data based on the Classification of Functions of Government (COFOG) and provide hands-on training.
  - Review GFS for Budgetary Central Government (BCG) for fiscal year (FY) 2020.
  - Initiate steps for expanding institutional coverage.

### Key findings — COA mapping and IFMIS preparation
- New COA status and mapping:
  - A new comprehensive COA has been developed based on the GFSM 2001/2014 classification to some extent.
  - The COA is disaggregated and includes a mix of revenue and expense accounts that can be mapped to GFSM 2014, but accounts related to assets and liabilities are not fully aligned with GFSM 2014 presentation.
  - Specific inconsistencies identified:
    - Sale of fixed assets treated as revenue.
    - Disposal of fixed assets treated as expenditure.
    - Refunded revenues and refunded expenses treated as positive revenues and expenditures (not negative items).
    - Deficit financing coded as budget line items.
    - Debt amortization treated as expenditure.
    - Legacy redundant accounts retained.
  - The mission completed a comprehensive mapping of the COA to the GFSM 2014 economic classification (full list mapped at item level; includes current budget, investment budget, and transactions in financial assets and liabilities).

### Key findings — COFOG introduction and capacity building
- COFOG mapping and workshop:
  - A first comprehensive mapping of outlays to COFOG was developed using administrative and economic classification.
  - The mission completed an initial comprehensive mapping for the COFOG derived from a mix of economic, programme and administrative classifications.
  - Mapping components undertaken:
    - (i) all organizational units;
    - (ii) all special programmes assigned to organizational units;
    - (iii) cross tabulation of economic classification and organizational units;
    - (iv) the investment expenditures divided by the sector and item/project.
  - Administrative classification is divided by ministry, department, and divisions and, when cross tabulated with the economic classification, includes a breakdown of the special programs by nature.
  - The mission delivered a workshop on COFOG compilation and completed the COFOG table for FY 2020.
  - Recommendation: include COFOG in annual GFS reporting and produce COFOG tables for prior years.

### Key findings — Public sector debt reporting and arrears
- Current debt reporting issues:
  - Internal debt reports mix holder and instrument data, lack reporting on maturities, and lack systematic integration of stocks and flows.
  - Public sector debt reporting requires improvement and alignment with the Public Sector Debt Statistics Guide for Compilers and Users (PSDSG) 2011.
  - Mission reviewed and updated public sector debt data for FY 2019 and FY 2020 for inclusion in annual GFS reporting.
  - Recommendation: start disseminating quarterly debt reports for greater transparency.
- Observations on arrears:
  - Arrears were not included in the GFS data nor in the debt tables as of the mission.
  - A 2017 survey collected arrears from spending units; arrears to contractors amounted to around IQD 6 trillion by end of 2017.
  - Clearance of those arrears over three years:
    - 40 percent were paid against T-bills (and are included in domestic debt);
    - 30 percent was paid in cash in 2018;
    - 30 percent was paid in cash in FY 2019.
  - MoF plans to include in the 2021 budget an allocation for clearance of cross-arrears for electricity bill payments.
  - Mission recommendation: GFS compilers should collect information on arrears from creation until extinction (paid, rescheduled, or forgiven).

### Key statistics — Public Sector Debt Data for Budgetary Central Government for FY 2019/2020 (in billion IQD)
- Domestic Debt:
  - 2019: 40,410.1
  - 2020Q1: 39,893.3
  - 2020Q2: 40,697.3
  - 2020Q3: 54,024.8
  - 2020Q4: 65,494.9
- T-bills to finance deficit (legal provisions):
  - 2019: 3,324.3
  - 2020Q1: 3,324.4
  - 2020Q2: 3,324.4
  - 2020Q3: 3,324.4
  - 2020Q4: 3,324.3
- T-bills to finance deficit (held by Banks and oil companies):
  - 2019: 6,530.5
  - 2020Q1: 6,530.5
  - 2020Q2: 1,771.2
  - 2020Q3: 503.5
  - 2020Q4: 503.5
- T-bills to finance deficit (discounted by CBI):
  - 2019: 14,125.0
  - 2020Q1: 14,125.0
  - 2020Q2: 18,884.3
  - 2020Q3: 28,452.0
  - 2020Q4: 40,452.0
- Loans:
  - 2019: 12,528.8
  - 2020Q1: 12,028.8
  - 2020Q2: 13,028.8
  - 2020Q3: 18,046.3
  - 2020Q4: 18,046.3
- Old debt to CBI:
  - 2019: 1,755.5
  - 2020Q1: 1,755.5
  - 2020Q2: 1,555.5
  - 2020Q3: 1,555.5
  - 2020Q4: 1,555.5
- Contractor Bonds:
  - 2019: 2,146.0
  - 2020Q1: 2,129.1
  - 2020Q2: 2,133.1
  - 2020Q3: 2,143.1
  - 2020Q4: 1,613.3
- External Debt:
  - 2019: 31,053.2
  - 2020Q1: 30,028.5
  - 2020Q2: 30,032.1
  - 2020Q3: 28,685.7
  - 2020Q4: 28,454.6
- Debt securities:
  - 2019: 5,616.7
  - 2020Q1: 5,616.7
  - 2020Q2: 5,616.7
  - 2020Q3: 5,410.6
  - 2020Q4: 5,410.6
- Paris Club/Non- Paris Club Loans:
  - 2019: 7,274.5
  - 2020Q1: 6,825.4
  - 2020Q2: 6,824.7
  - 2020Q3: 6,406.0
  - 2020Q4: 6,406.0
- Loans (external breakdown):
  - 2019: 18,162.0
  - 2020Q1: 17,586.4
  - 2020Q2: 17,590.7
  - 2020Q3: 16,869.1
  - 2020Q4: 16,638.0
- Total Gross Debt:
  - 2019: 71,463.2
  - 2020Q1: 69,921.7
  - 2020Q2: 70,729.4
  - 2020Q3: 82,710.5
  - 2020Q4: 93,949.5
- Memorandum Item — Exchange rate IQD/USD:
  - 2019: 1182
  - 2020Q1: 1182
  - 2020Q2: 1182
  - 2020Q3: 1182
  - 2020Q4: 1182
- Interest Payment:
  - Domestic Debt (2019 and quarters): 1,343.94; 489.82; 28.65; 46.10; 509.41
  - External Debt (2019 and quarters): 1,100.29; 451.53; 76.04; 431.04; 49.88

### Key findings — GFS compilation, high-frequency dissemination, and statistical issues
- Current practice and systems:
  - The MoF has so far reported only annual data to the IMF’s annual GFS database.
  - Data are produced using an Excel-based tool that compiles monthly, quarterly and annual GFS data.
- Recommended minimal dissemination improvements:
  - With minimal efforts, the MoF could start disseminating high frequency data through the IFS database and publish on the national website monthly statement of operations for BCG in line with the GFSM 2014 template.
- Accounts payable and classification issues:
  - High increase in account payables in FY 2020 caused by recording in guarantee accounts of around 8 trillion IQD in November 2020 reflecting infra-annual investment expenditure commitments by ministries to third parties.
  - Example: ministry of defense has around 1.2 IQD trillion of committed investment expenditures not yet regularized (expected regularization during the year).
  - The mission reviewed and adjusted some misclassification issues.
- Statistical discrepancies adjustments for FY 2020:
  - The mission adjusted statistical discrepancies by reflecting issuance of T-bills worth of IQD 12 trillion occurring in the last quarter of FY 2020 which were not adequately captured in the authorities’ classification assistant.
  - A further review and integration of liabilities’ stocks and flows data in the “classification Assistant file” should take place during the next mission.

### Institutional coverage and sectorization
- Current GFS coverage:
  - The GFS report currently covers Budgetary Central Government (BCG).
  - Activities within the budget are reflected in fiscal reports; independent entities can be added gradually to reflect all central government spending and eventually extend to subnational governments to cover general government.
- Composition of general government and sub-sectors:
  - General government comprises central government (presidency, parliament, prime minister office, judiciary, ministries, departments and agencies) and local governments (around 393 municipalities distributed in 19 governorates).
  - Central government sub-sectors:
    - Budgetary Central Government (BCG): presidency, parliament, prime minister office, judiciary, 22 ministries and entities included in the Iraqi annual budget.
    - Extrabudgetary Units (EBUs): includes around 66 independent government units primarily financially supported by the BCG and their own revenues.
    - Social Security Fund: comprises Social Security Fund covering private and public employees and the Retirement Fund for government employees.
- Public corporations:
  - Iraq has about 113 public corporations comprised of financial and nonfinancial public corporations.
  - These entities provide goods and services at economically significant prices or regulate markets/financial sector and can incur large losses (example: large arrears by energy companies for fuel supply for electricity do not currently feature in GFS).
  - Mission recommendation: a thorough review of the list of public entities is needed to ensure correct classification as public corporations versus EBUs in line with GFSM 2014 guidelines; this is a critical first step in a phased approach to expand coverage beyond the BCG.

### Priority recommendations and timeline (selected)
- April 2022:
  - Enhance annual GFS data for FY 2019 and FY 2020 submission by filling missing public sector debt data and reducing statistical discrepancies.
  - Note: Annual GFS data for FY 2019 and FY 2020 were revised and sent to the public accounting department for final approval and re-submission to the fund.
- June 2022:
  - Include the COFOG table in annual GFS reporting for FY2020 and produce COFOG table for FY2017–2019.
  - Produce and disseminate on a regular basis comprehensive budget execution reports based on the GFSM 2014 classification.
  - Enhance annual GFS data FY 2021 to include Investment budget and special programmes by economic classification (target completion June 2022).
  - Include the COFOG template in the budget documentation (target completion June 2022).
- October 2022:
  - Build the capacity of MoF staff in the compilation of PSDS.
- December 2022:
  - Disclose arrears in a transparent manner and record the accumulation and payment of these arrears transparently as claims on the government.
- March 2022:
  - Review and update the Institutional Table for the Sectorization of the public sector entities.
- June 2023:
  - Expand the coverage of the GFS annual data to include the Extrabudgetary Units (EBUs), and the Social Security Funds.
- TBD:
  - Build staff capacity in COFOG in a more detailed focus.
  - Compile and disseminate PSDS for BCG on a monthly, quarterly and annual basis in line with the PSDSG 2011.
- In progress / ongoing actions:
  - Use mapping of the COA to the GFSM 2014 to compile budget execution reports and budget preparation reports to improve financial analysis and medium-term forecast preparation.
  - Apply functional, economic and administrative classification as well as program classification and a harmonized data methodology during budget preparation for both current and investment budgets.
  - Maintain the mapping of the chart of account as a living document to be updated as the new COA and the public accounting guide are rolled out.
  - Establish a GFS interdepartmental taskforce (target completion June 2022).

### Technical assessment highlights and recommended actions
- Mapping of the New Chart of Accounts to the GFSM 2014 — recommended actions:
  - Maintain the mapping of the chart of account as a living document to be updated as the new COA and the public accounting guide are rolled out.
  - Use the COA-to-GFSM 2014 mapping to compile budget execution reports and budget preparation reports to improve financial analysis and medium-term forecasting.
  - Produce and disseminate on a regular basis comprehensive budget execution reports based on the GFSM 2014 classification.
  - Apply functional, economic and administrative classification, program classification, and a harmonized data methodology during budget preparation for both current and investment budgets.
- Introducing COFOG — recommendations:
  - COFOG is critical to improve budget classification; the mission delivered training and completed COFOG for FY2020.
  - As per GFSM 2014 standards, classifying each transaction on its own is ideal; administrative classification can serve as a starting point if detailed at department or agency level.
- Public Sector Debt Statistics (PSDS) — recommendations:
  - Improve alignment with PSDSG 2011 and establish regular compilation and dissemination (monthly, quarterly, annual) for BCG.
  - Build MOF staff capacity in PSDS compilation (target October 2022).
- Institutional arrangements — recommendations:
  - Establish an inter-departmental GFS taskforce to coordinate data sharing and GFS compilation (target completion June 2022).
  - Conduct a thorough review of about 113 public corporations to correctly classify entities for phased expansion of coverage beyond BCG.

### Recommended Actions (extracted from source)
- Include the functional classification (COFOG) as part of the budget document presentation.
- Include COFOG table in reporting of annual GFS for FY2020, and produce and disseminate COFOG table for FY2017-2019.
- Build the capacity of MOF staff in COFOG with a more detailed focus.
- Enhance annual GFS for FY 2019–2020 by filling missing public sector debt data and reducing statistical discrepancies.
- Build the capacity of MoF staff of the Budget, Public Accounting and Debt departments in the compilation of PSDS by attending the PSDS course scheduled for October 2022 at the IMF Middle East Center for Economic and Finance (CEF) in Kuwait.
- Compile and disseminate public sector debt statistics (PSDS) for the BCG on a regular basis in line with the PSDS guide as a main objective for the next mission.
- Establish a GFS inter-departmental taskforce for improving coordination.
- Disclose arrears in a transparent manner and record the accumulation and payment of these arrears transparently as claims on the government.
- Submit high frequency data to the IFS database.
- Review and update the Institutional Table for the Sectorization of the public sector entities.
- Expand the coverage of the GFS annual data to include Extra-Budgetary Units (EBUs), and the Social Security Funds.

*The Republic of Iraq — IMF mission report: "1. Priority Recommendations" (content unit 1irqea2023001)*

### 1. Priority Recommendations _____________________________________________________________________ 6

### 1. Priority Recommendations

### Mission background and objectives
- A Government Finance Statistics (GFS) Technical Assistance (TA) and Training mission took place remotely, during December 5–16, 2021.
- Mission leadership and team:
  - Nadine Aboukhaled (STA) — mission leader
  - Yousef Daqa (GFS expert)
  - Tareg Abdelgader (AMF)
- Purpose: support the Ministry of Finance (MOF) in implementing the national budget reform project and the strategic target on enhancing budget preparation and reporting in line with the Government Finance Statistics Manual 2014 (GFSM 2014) framework and its integration in the Integrated Financial Management Information System (IFMIS).
- Tasks performed:
  - Complete the mapping of the new chart of accounts (COA) with the GFSM 2014 classifications.
  - Initiate the compilation of expenditures data based on the Classification of Functions of Government (COFOG) and provide hands-on training.
  - Review GFS for Budgetary Central Government (BCG) for fiscal year (FY) 2020.
  - Initiate steps for expanding institutional coverage.

### Key findings
- COA mapping and IFMIS preparation:
  - A new comprehensive COA has been developed based on the GFSM 2001/2014 classification to some extent.
  - The COA is disaggregated and includes a mix of revenue and expense accounts that can be mapped to GFSM 2014, but accounts related to assets and liabilities are not fully aligned with GFSM 2014 presentation.
  - Specific inconsistencies: sale of fixed assets treated as revenue, disposal of fixed assets as expenditure, refunded revenues and refunded expenses treated as positive revenues and expenditures (not negative items), deficit financing coded as budget line items, debt amortization treated as expenditure, and legacy redundant accounts retained.
  - The mission completed a comprehensive mapping of the COA to the GFSM 2014 economic classification (full list mapped at item level; includes current budget, investment budget, and transactions in financial assets and liabilities).
- COFOG introduction and capacity building:
  - A first comprehensive mapping of outlays to COFOG was developed using administrative and economic classification.
  - A workshop on COFOG compilation was delivered and the COFOG table for FY2020 was completed.
  - Recommendation to include COFOG in annual GFS reporting and to produce COFOG tables for prior years.
- Public sector debt reporting:
  - Current internal debt reports mix holder and instrument data, lack reporting on maturities, and lack systematic integration of stocks and flows.
  - Public sector debt reporting requires improvement and alignment with the Public Sector Debt Statistics Guide for Compilers and Users (PSDSG) 2011.
  - Mission reviewed and updated public sector debt data for FY 2019 and FY 2020 for inclusion in annual GFS reporting.
  - Recommendation to start disseminating quarterly debt reports for greater transparency.
- Institutional coverage and governance:
  - Iraq has about 113 public corporations comprised of financial and nonfinancial public corporations.
  - A thorough review of the list of public entities is needed to ensure correct classification as public corporations versus extrabudgetary government units in line with GFSM 2014.
  - MOF needs to establish an inter-departmental taskforce to coordinate GFS compilation, data sharing, recording, and submission to avoid delays and omissions.

### Priority recommendations and timeline (selected items from Table 1 and Detailed Technical Assessment)
- April 2022
  - Enhance annual GFS data for FY 2019 and FY 2020 submission by filling missing public sector debt data and reducing statistical discrepancies.
  - Note: Annual GFS data for FY 2019 and FY 2020 were revised and sent to the public accounting department for final approval and re-submission to the fund.
- June 2022
  - Include the COFOG table in annual GFS reporting for FY2020 and produce COFOG table for FY2017–2019.
  - Produce and disseminate on a regular basis comprehensive budget execution reports based on the GFSM 2014 classification.
  - Enhance annual GFS data FY 2021 to include Investment budget and special programmes by economic classification (target completion June 2022).
  - Include the COFOG template in the budget documentation (target completion June 2022).
- October 2022
  - Build the capacity of MoF staff in the compilation of PSDS.
- December 2022
  - Disclose arrears in a transparent manner and record the accumulation and payment of these arrears transparently as claims on the government.
- March 2022
  - Review and update the Institutional Table for the Sectorization of the public sector entities.
- June 2023
  - Expand the coverage of the GFS annual data to include the Extrabudgetary Units (EBUs), and the Social Security Funds.
- TBD (timing to be decided)
  - Build staff capacity in COFOG in a more detailed focus.
  - Compile and disseminate PSDS for BCG on a monthly, quarterly and annual basis in line with the PSDSG 2011.
- In progress / ongoing actions
  - Use mapping of the COA to the GFSM 2014 to compile budget execution reports and budget preparation reports to improve financial analysis and medium-term forecast preparation.
  - Apply functional, economic and administrative classification as well as program classification and a harmonized data methodology during budget preparation for both current and investment budgets.
  - Maintain the mapping of the chart of account as a living document to be updated as the new COA and the public accounting guide are rolled out.
  - Establish a GFS interdepartmental taskforce (target completion June 2022).

### Technical assessment highlights and recommended actions
- Mapping of the New Chart of Accounts to the GFSM 2014
  - The complete list of COA accounts at the item level has been mapped to the GFSM 2014 economic classification (includes current budget, investment budget, and transactions in financial assets and liabilities).
  - Recommended actions:
    - Maintain the mapping of the chart of account as a living document to be updated as the new COA and the public accounting guide are rolled out.
    - Use the COA-to-GFSM 2014 mapping to compile budget execution reports and budget preparation reports to improve financial analysis and medium-term forecasting.
    - Produce and disseminate on a regular basis comprehensive budget execution reports based on the GFSM 2014 classification.
    - Apply functional, economic and administrative classification, program classification, and a harmonized data methodology during budget preparation for both current and investment budgets.
- Introducing COFOG
  - COFOG is critical to improve budget classification; the mission delivered training and completed COFOG for FY2020.
  - As per GFSM 2014 standards, classifying each transaction on its own is ideal; administrative classification can serve as a starting point if detailed at department or agency level.
- Public Sector Debt Statistics (PSDS)
  - Improve alignment with PSDSG 2011 and establish regular compilation and dissemination (monthly, quarterly, annual) for BCG.
  - Build MOF staff capacity in PSDS compilation (target October 2022).
- Institutional arrangements
  - Establish an inter-departmental GFS taskforce to coordinate data sharing and GFS compilation (target completion June 2022).
  - Conduct a thorough review of about 113 public corporations to correctly classify entities for phased expansion of coverage beyond BCG.

_The Republic of Iraq — IMF mission report: "1. Priority Recommendations" (content unit 1irqea2023001)_

### 17.      To this end, the mission completed an initial comprehensive mapping for the COFOG

### 1irqea2023001 - 17.      To this end, the mission completed an initial comprehensive mapping for the COFOG

### COFOG mapping and compilation
- The mission completed an initial comprehensive mapping for the COFOG derived from a mix of economic, programme and administrative classifications.
- Mapping components undertaken:
  - (i) all organizational units;
  - (ii) all special programmes assigned to organizational units;
  - (iii) cross tabulation of economic classification and organizational units;
  - (iv) the investment expenditures divided by the sector and item/project (refer to table 2 in source).
- The administrative classification (table 3) is divided by ministry, department, and divisions and, when cross tabulated with the economic classification, includes a breakdown of the special programs by nature.
- Detailed mapping was necessary to align with COFOG especially for classification of public sector debt transactions given the current treatment of debt principal repayments as expenses rather than financing (refer to section A).
- The mission delivered a workshop on COFOG compilation and completed the COFOG table for FY 2020, including:
  - presentation on COFOG concepts, main uses, and common problematic areas;
  - examples of countries’ experiences in compiling COFOG;
  - walkthrough of compilation technique and production of Table 7 of annual GFS for FY 2020.
- The mission used the latest budget execution reports provided by the authorities to produce COFOG data for FY 2020 and updated GFS expenditure data for FY 2020 to align with COFOG-derived expenditure figures.

### GFS compilation, high-frequency dissemination, and statistical issues
- Current practice and systems:
  - The MoF has so far reported only annual data to the IMF’s annual GFS database.
  - Data are produced using an Excel-based tool that compiles monthly, quarterly and annual GFS data.
- Recommended minimal steps to improve dissemination:
  - With minimal efforts, the MoF could start disseminating high frequency data through the IFS database and publish on the national website monthly statement of operations for BCG in line with the GFSM 2014 template.
- Accounts payable and classification issues:
  - High increase in account payables in FY 2020 was discussed; caused by recording in guarantee accounts (treated as liabilities (3318), accounts) of around 8 trillion IQD in November 2020 reflecting infra-annual investment expenditure commitments by ministries to third parties.
  - Example: ministry of defense has around 1.2 IQD trillion of committed investment expenditures not yet regularized (expected regularization during the year).
  - The mission reviewed and adjusted some misclassification issues.
- Statistical discrepancies adjustments for FY 2020:
  - The mission adjusted statistical discrepancies by reflecting issuance of T-bills worth of IQD 12 trillion occurring in the last quarter of FY 2020 which were not adequately captured in the authorities’ classification assistant.
  - A further review and integration of liabilities’ stocks and flows data in the “classification Assistant file” should take place during the next mission.
- Institutional recommendation:
  - Establish an inter-departmental GFS taskforce to coordinate data sharing among departments, ensure proper recording in the excel-based tool and GFS submissions, and avoid delays and omissions of externally sourced data.

### Public sector debt data, coverage gaps, and arrears
- Debt data updates and issues:
  - Public sector debt data for FY 2019 and FY 2020 were reviewed and recommendations provided to reduce statistical discrepancies.
  - The source debt data sheet used for GFS submission has been updated with authorities’ information.
  - During FY 2020 several domestic debt transactions took place that needed reflection in the data sheet, including conversion of T-bills held by banks and oil companies into long term loans after being discounted by the central bank of Iraq (CBI).
- Key aggregates (Appendix III: Public Sector Debt Data for Budgetary Central Government for FY 2019/2020, in billion IQD):
  - Domestic Debt:
    - 2019: 40,410.1
    - 2020Q1: 39,893.3
    - 2020Q2: 40,697.3
    - 2020Q3: 54,024.8
    - 2020Q4: 65,494.9
  - T-bills to finance deficit (legal provisions):
    - 2019: 3,324.3
    - 2020Q1: 3,324.4
    - 2020Q2: 3,324.4
    - 2020Q3: 3,324.4
    - 2020Q4: 3,324.3
  - T-bills to finance deficit (held by Banks and oil companies):
    - 2019: 6,530.5
    - 2020Q1: 6,530.5
    - 2020Q2: 1,771.2
    - 2020Q3: 503.5
    - 2020Q4: 503.5
  - T-bills to finance deficit (discounted by CBI):
    - 2019: 14,125.0
    - 2020Q1: 14,125.0
    - 2020Q2: 18,884.3
    - 2020Q3: 28,452.0
    - 2020Q4: 40,452.0
  - Loans:
    - 2019: 12,528.8
    - 2020Q1: 12,028.8
    - 2020Q2: 13,028.8
    - 2020Q3: 18,046.3
    - 2020Q4: 18,046.3
  - Old debt to CBI:
    - 2019: 1,755.5
    - 2020Q1: 1,755.5
    - 2020Q2: 1,555.5
    - 2020Q3: 1,555.5
    - 2020Q4: 1,555.5
  - Contractor Bonds:
    - 2019: 2,146.0
    - 2020Q1: 2,129.1
    - 2020Q2: 2,133.1
    - 2020Q3: 2,143.1
    - 2020Q4: 1,613.3
  - External Debt:
    - 2019: 31,053.2
    - 2020Q1: 30,028.5
    - 2020Q2: 30,032.1
    - 2020Q3: 28,685.7
    - 2020Q4: 28,454.6
  - Debt securities:
    - 2019: 5,616.7
    - 2020Q1: 5,616.7
    - 2020Q2: 5,616.7
    - 2020Q3: 5,410.6
    - 2020Q4: 5,410.6
  - Paris Club/Non- Paris Club Loans:
    - 2019: 7,274.5
    - 2020Q1: 6,825.4
    - 2020Q2: 6,824.7
    - 2020Q3: 6,406.0
    - 2020Q4: 6,406.0
  - Loans (external breakdown):
    - 2019: 18,162.0
    - 2020Q1: 17,586.4
    - 2020Q2: 17,590.7
    - 2020Q3: 16,869.1
    - 2020Q4: 16,638.0
  - Total Gross Debt:
    - 2019: 71,463.2
    - 2020Q1: 69,921.7
    - 2020Q2: 70,729.4
    - 2020Q3: 82,710.5
    - 2020Q4: 93,949.5
  - Memorandum Item — Exchange rate IQD/USD:
    - 2019: 1182
    - 2020Q1: 1182
    - 2020Q2: 1182
    - 2020Q3: 1182
    - 2020Q4: 1182
  - Interest Payment:
    - Domestic Debt (2019 and quarters): 1,343.94; 489.82; 28.65; 46.10; 509.41
    - External Debt (2019 and quarters): 1,100.29; 451.53; 76.04; 431.04; 49.88
- Observations on arrears:
  - Arrears were not included in the GFS data nor in the debt tables as of the mission.
  - A 2017 survey collected arrears from spending units; arrears to contractors amounted to around IQD 6 trillion by end of 2017.
  - Clearance of those arrears over three years:
    - 40 percent were paid against T-bills (and are included in domestic debt);
    - 30 percent was paid in cash in 2018;
    - 30 percent was paid in cash in FY 2019.
  - MoF plans to include in the 2021 budget an allocation for clearance of cross-arrears for electricity bill payments.
  - Mission recommendation: GFS compilers should collect information on arrears from creation until extinction (paid, rescheduled, or forgiven).

### Institutional coverage and sectorization
- Current GFS coverage:
  - The GFS report currently covers Budgetary Central Government (BCG).
  - Activities within the budget are reflected in fiscal reports; independent entities can be added gradually to reflect all central government spending and eventually extend to subnational governments to cover general government.
- Composition of general government and sub-sectors:
  - General government comprises central government (presidency, parliament, prime minister office, judiciary, ministries, departments and agencies) and local governments (around 393 municipalities distributed in 19 governorates).
  - Central government is divided into three sub-sectors:
    - Budgetary Central Government (BCG): includes presidency, parliament, prime minister office, judiciary, 22 ministries and entities included in the Iraqi annual budget.
    - Extrabudgetary Units (EBUs): includes around 66 independent government units primarily financially supported by the BCG and their own revenues. Mission initially classified a list of self-funded entities that include 180 entities to their proper sector (EBUs, SSFs, Public financial and non-financial corporations) (Appendix V).
    - Social Security Fund: comprises Social Security Fund covering private and public employees and the Retirement Fund for government employees.
- Public corporations:
  - Iraq has about 113 public corporations comprised of financial and nonfinancial public corporations (Appendix V).
  - These entities provide goods and services at economically significant prices or regulate markets/financial sector and can incur large losses (example: large arrears by energy companies for fuel supply for electricity do not currently feature in GFS).
  - Mission: a thorough review of the list of public entities is needed to ensure correct classification as public corporations versus EBUs in line with GFSM 2014 guidelines; this is a critical first step in a phased approach to expand coverage beyond the BCG.

### Recommended Actions (extracted from source)
- Include the functional classification (COFOG) as part of the budget document presentation.
- Include COFOG table in reporting of annual GFS for FY2020, and produce and disseminate COFOG table for FY2017-2019.
- Build the capacity of MOF staff in COFOG with a more detailed focus.
- Enhance annual GFS for FY 2019–2020 by filling missing public sector debt data and reducing statistical discrepancies.
- Build the capacity of MoF staff of the Budget, Public Accounting and Debt departments in the compilation of PSDS by attending the PSDS course scheduled for October 2022 at the IMF Middle East Center for Economic and Finance (CEF) in Kuwait.
- Compile and disseminate public sector debt statistics (PSDS) for the BCG on a regular basis in line with the PSDS guide as a main objective for the next mission.
- Establish a GFS inter-departmental taskforce for improving coordination.
- Disclose arrears in a transparent manner and record the accumulation and payment of these arrears transparently as claims on the government.
- Submit high frequency data to the IFS database.
- Review and update the Institutional Table for the Sectorization of the public sector entities.
- Expand the coverage of the GFS annual data to include Extra-Budgetary Units (EBUs), and the Social Security Funds.

### Officials met during the mission (selected list as presented)
- Ms. Taif Sami Mohammed — Undersecretary of the Ministry of Finance / DG of Budget Department, Ministry of Finance/Budget Department
- Ms. Iktifaa Flaih Hassan — Ministry of Finance/Budget Department
- Ms. Mayyasa Kadem Jandar — Ministry of Finance/Budget Department
- Ms. Israa Walid Khalifa — Ministry of Finance/Budget Department
- Ms. Afaq Najim Abdallah — Ministry of Finance/Budget Department
- Mr. Zaid Moayyed Abdel Razzak — Ministry of Finance/Budget Department
- Ms. Leila Chelal Mosa — Ministry of Finance/Accounting Department
- Ms. Roaa Wilaa Sobhi — Ministry of Finance/Debt Department
- Mr. Yakzan Aqeel Hassan — Ministry of Finance/Debt Department
- Ms. Sawsan Jomaa Mohamad — Ministry of Finance/Accounting Department

*Source: Mission report content provided in the supplied PDF content unit.*

### Appendix IV. List of Public Entities –   Preliminary Classification

### Appendix IV. List of Public Entities –   Preliminary Classification

### Independent entity
- 3 Department of Shiite Holy Sites — Independent entity
- 3 High Commission for Hajj and Umrah — Independent entity
- 5 Iraqi Fund for External Development — Independent entity
- 5 Insurance Bureau — Independent entity
- 9 Department of People’s Medical Clinics — Independent entity
- 12 Open Education College — Independent entity
- 14 Export Support Fund Committee — Independent entity
- 15 General House of Cultural Affairs — Independent entity
- 15 Department of Plastic Arts — Independent entity
- 15 Department of Cinema and Theatre — Independent entity
- 15 Tourism Authority — Independent entity
- 18 Building Research Center — Independent entity
- 18 Housing Fund Department — Independent entity
- 18 General Directorate of Water — Independent entity
- 18 General Directorate of Sewage — Independent entity
- 18 Municipal institutions — Independent entity
- 21 Guest House — Independent entity
- 43 Mayoralty of Baghdad — Independent entity
- 43 Iraqi Media Network — Independent entity
- 43 Communications and Media Commission — Independent entity
- 43 Baghdad Sewage Department — Independent entity
- 43 Baghdad Water Department — Independent entity
- 47 Directorate of Water, Basra Governorate — Independent entity
- 47 Directorate of Sewage, Basra Governorate — Independent entity
- 47 Municipal institutions, Basra Governorate — Independent entity
- 48 Directorate of Water, Nineveh Governorate — Independent entity
- 48 Directorate of Sewage, Nineveh Governorate — Independent entity
- 48 Municipal institutions, Nineveh Governorate — Independent entity
- 49 Directorate of Water, Baghdad Governorate — Independent entity
- 49 Directorate of Sewage, Baghdad Governorate — Independent entity
- 49 Municipal institutions, Baghdad Governorate — Independent entity
- 50 Directorate of Water, Dhi Qar Governorate — Independent entity
- 50 Directorate of Sewage, Dhi Qar Governorate — Independent entity
- 50 Municipal institutions, Dhi Qar Governorate — Independent entity
- 51 Directorate of Water, Diyala Governorate — Independent entity
- 51 Directorate of Sewage, Diyala Governorate — Independent entity
- 51 Municipal institutions, Diyala Governorate — Independent entity
- 52 Autonomously-funded local administration, Babil Governorate — Independent entity
- 52 Directorate of Water, Babil Governorate — Independent entity
- 52 Directorate of Sewage, Babil Governorate — Independent entity
- 52 Municipal institutions, Babil Governorate — Independent entity
- 53 Directorate of Water, Anbar Governorate — Independent entity
- 53 Directorate of Sewage, Anbar Governorate — Independent entity
- 53 Municipal institutions, Anbar Governorate — Independent entity
- 54 Directorate of Water, Maysan Governorate — Independent entity
- 54 Directorate of Sewage, Maysan Governorate — Independent entity
- 54 Municipal institutions, Maysan Governorate — Independent entity
- 55 Autonomously-funded local administration, Wasit Governorate — Independent entity
- 55 Directorate of Water, Wasit Governorate — Independent entity
- 55 Directorate of Sewage, Wasit Governorate — Independent entity
- 55 Municipal institutions, Wasit Governorate — Independent entity
- 57 Directorate of Water, Najaf Governorate — Independent entity
- 57 Directorate of Sewage, Najaf Governorate — Independent entity
- 57 Municipal institutions, Najaf Governorate — Independent entity
- 58 Directorate of Water, Diwaniyah Governorate — Independent entity
- 58 Directorate of Sewage, Diwaniyah Governorate — Independent entity
- 58 Municipal institutions, Diwaniyah Governorate — Independent entity
- 59 Directorate of Water, Muthanna Governorate — Independent entity
- 59 Directorate of Sewage, Muthanna Governorate — Independent entity
- 59 Municipal institutions, Muthanna Governorate — Independent entity
- 60 Directorate of Water, Karbala Governorate — Independent entity
- 60 Directorate of Sewage, Karbala Governorate — Independent entity
- 60 Municipal institutions, Karbala Governorate — Independent entity
- 61 Directorate of Water, Saladin Governorate — Independent entity
- 61 Directorate of Sewage, Saladin Governorate — Independent entity
- 61 Municipal institutions, Saladin Governorate — Independent entity

### Non-financial public corporation
- 5 General Authority for Free Zones — Non-financial public corporation
- 9 General Corporation for the Marketing of Medicines and Medical Supplies — Non-financial public corporation
- 12 Nahrain General Corporation for Printing and Production of Educational Supplies — Non-financial public corporation
- 14 General Construction Materials Trading Corporation — Non-financial public corporation
- 14 General Foodstuff Trading Corporation — Non-financial public corporation
- 14 General Central Markets Corporation — Non-financial public corporation
- 14 General Grain Trading Corporation — Non-financial public corporation
- 14 General Automobile and Machinery Trading Corporation — Non-financial public corporation
- 14 General Grain Processing Corporation — Non-financial public corporation
- 14 State Corporation for Iraqi Fairs and Commercial Services — Non-financial public corporation
- 15 General Corporation for Habbaniya Tourist City — Non-financial public corporation
- 16 State Corporation for Land Transportation — Non-financial public corporation
- 16 General Corporation for Implementation of Transport Projects — Non-financial public corporation
- 16 General Corporation for Passenger and Group Transport — Non-financial public corporation
- 16 State Corporation for Marine Transportation — Non-financial public corporation
- 16 General Corporation for Ports of Iraq — Non-financial public corporation
- 16 General Corporation for Iraqi Railways — Non-financial public corporation
- 16 General Corporation for Iraqi Airlines — Non-financial public corporation
- 16 General Corporation for the Management of Private Transport — Non-financial public corporation
- 16 General Corporation for Air Navigation Services — Non-financial public corporation
- 18 Farouq General Corporation for Construction Contracting — Non-financial public corporation
- 18 Mansour General Corporation for Construction Contracting — Non-financial public corporation
- 18 Rashid General Corporation for Construction Contracting — Non-financial public corporation
- 18 Mutasim General Corporation for Construction Contracting — Non-financial public corporation
- 18 Hammurabi Construction Corporation — Non-financial public corporation
- 18 Ashour General Corporation for Engineering Contracting — Non-financial public corporation
- 18 Fao General Engineering Corporation — Non-financial public corporation
- 18 Saad General Corporation — Non-financial public corporation
- 19 Mesopotamia State Corporation for Seeds — Non-financial public corporation
- 19 General Agricultural Equipment Corporation — Non-financial public corporation
- 20 Rafidain General Dam Implementation Corporation — Non-financial public corporation
- 20 Fao General Corporation for Implementation of Irrigation Projects — Non-financial public corporation
- 20 Iraqi General Corporation for the Implementation of Irrigation Projects — Non-financial public corporation
- 21 Midland Refineries Corporation (public corporation) — Non-financial public corporation
- 21 Iraq North Refineries Corporation (public corporation) — Non-financial public corporation
- 21 North Gas Corporation (public corporation) — Non-financial public corporation
- 21 South Refineries Corporation (public corporation) — Non-financial public corporation
- 21 Oil Pipelines Corporation (public corporation) — Non-financial public corporation
- 21 Gas Filling Corporation (public corporation) — Non-financial public corporation
- 21 General Corporation for Heavy Engineering Equipment — Non-financial public corporation
- 21 Oil Projects Corporation (public corporation) — Non-financial public corporation
- 21 Oil Products Distribution Corporation (public corporation) — Non-financial public corporation
- 21 Iraqi Drilling Corporation (public corporation) — Non-financial public corporation
- 21 Basra Oil Corporation (public corporation) — Non-financial public corporation
- 21 Midland Oil Corporation (public corporation) — Non-financial public corporation
- 21 State Oil Marketing Organization (SOMO) — Non-financial public corporation
- 21 North Oil Corporation (public corporation) — Non-financial public corporation
- 21 Oil Exploration Corporation — Non-financial public corporation
- 21 Iraqi Oil Tankers Corporation (public corporation) — Non-financial public corporation
- 21 South Gas Corporation (public corporation) — Non-financial public corporation
- 21 Maysan Oil Corporation (public corporation) — Non-financial public corporation
- 21 Dhi Qar Oil Corporation (public corporation) — Non-financial public corporation
- 23 General Iron and Steel Corporation — Non-financial public corporation
- 23 General Corporation for Engineering Support — Non-financial public corporation
- 23 General Phosphates Corporation — Non-financial public corporation
- 23 Faris General Corporation — Non-financial public corporation
- 23 State Fertilizer Corporation (southern region) — Non-financial public corporation
- 23 Bin Majid General Corporation — Non-financial public corporation
- 23 General Corporation for Construction Industries — Non-financial public corporation
- 23 General Corporation for Project Design and Implementation — Non-financial public corporation
- 23 General Directorate for Industrial Development — Non-financial public corporation
- 23 Zawra General Corporation — Non-financial public corporation
- 23 State Fertilizer Corporation (northern region) — Non-financial public corporation
- 23 State Corporation for Mining — Non-financial public corporation
- 23 Aur General Corporation — Non-financial public corporation
- 23 General Petrochemical Industries Corporation — Non-financial public corporation
- 23 Mishraq State Sulphur Corporation — Non-financial public corporation
- 23 General Corporation for Engineering Inspection and Rehabilitation — Non-financial public corporation
- 23 General Military Industries Corporation — Non-financial public corporation
- 23 General Corporation for the Manufacture of Medicines and Medical Supplies SDI — Non-financial public corporation
- 23 General Corporation for Copper and Mechanical Industries — Non-financial public corporation
- 23 General Corporation for Steel Industries — Non-financial public corporation
- 23 State Corporation for Automotive and Equipment Manufacture — Non-financial public corporation
- 23 State Corporation for Textiles and Leather — Non-financial public corporation
- 23 Furat State Corporation for Chemicals and Pesticides — Non-financial public corporation
- 23 General Corporation for Food Products — Non-financial public corporation
- 23 General Corporation for Electronic Systems — Non-financial public corporation
- 23 General Corporation for Communications Equipment and Power — Non-financial public corporation
- 23 General Corporation for Hydraulic Industries — Non-financial public corporation
- 23 State Corporation for Electrical and Electronic Industries — Non-financial public corporation
- 23 State Corporation for Glass and Ceramics — Non-financial public corporation
- 23 Diyala General Corporation — Non-financial public corporation
- 23 State Corporation for Rubber Industries and Tires — Non-financial public corporation
- 23 Iraqi Cement Corporation — Non-financial public corporation
- 29 General Corporation for the Production of Electrical Power (central region) — Non-financial public corporation
- 29 General Corporation for the Production of Electrical Power (northern region) — Non-financial public corporation
- 29 General Corporation for the Production of Electrical Power (middle Euphrates) — Non-financial public corporation
- 29 General Corporation for the Transmission of Electrical Power (southern region) — Non-financial public corporation
- 29 Southern Electricity Distribution Corporation — Non-financial public corporation
- 29 General Corporation for the Transmission of Electrical Power (central region) — Non-financial public corporation
- 29 Baghdad Electricity Distribution Corporation — Non-financial public corporation
- 29 General Corporation for the Transmission of Electrical Power (northern region) — Non-financial public corporation
- 29 Northern Electricity Distribution Corporation — Non-financial public corporation
- 29 General Corporation for the Inspection and Rehabilitation of Electronic Systems — Non-financial public corporation
- 29 General Corporation for the Transmission of Electrical Power (middle Euphrates) — Non-financial public corporation
- 29 Central Electricity Distribution Corporation — Non-financial public corporation
- 31 Salam General Corporation — Non-financial public corporation
- 31 General Telecommunications and Informatics Corporation — Non-financial public corporation
- 31 General Post and Savings Corporation — Non-financial public corporation
- 43 Central Bank of Iraq — Non-financial public corporation
- 43 Ibn Rushd General Corporation — Non-financial public corporation

### Financial public corporation
- 5 Rafidain Bank (public corporation) — Financial public corporation
- 5 Agricultural Bank (public corporation) — Financial public corporation
- 5 Industrial Bank (public corporation) — Financial public corporation
- 5 Real Estate Bank (public corporation) — Financial public corporation
- 5 Rasheed Bank (public corporation) — Financial public corporation
- 5 Iraqi Insurance Corporation — Financial public corporation
- 5 National Insurance Corporation — Financial public corporation
- 5 Iraqi Reinsurance Corporation — Financial public corporation
- 5 Iraqi Banking Services Corporation — Financial public corporation
- 5 Trade Bank of Iraq — Financial public corporation
- 5 Alnahrain Islamic Bank — Financial public corporation

### Social Security Fund
- 8 Department of Employee Pensions and Social Security — Social Security Fund

*Appendix IV. List of Public Entities –   Preliminary Classification (1irqea2023001).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1irqea2023001.pdf_