In line with Iraq’s aim to implement a stable macroeconomic framework in the country, the government seeks to unlock potential investment opportunities in both the oil and gas as well as non-oil sectors, said Frost & Sullivan, a global market research and analysis firm.
According to its recent study ‘Iraq’s Untapped Opportunities; Path to Investment Boom,’ the country requires more than $30 billion of foreign direct investment per annum to boost the economic growth after three years of war against the Islamic State terror group, news outlets reported.
The study reveals that Iraq needs a robust FDI to come out of IS crisis to reconstruct its economy. As a result of healthy foreign international reserves, limited restrictions on cross-border fund transfers as well as an attractive legal framework that provides greater protection and incentives for foreign investors, investment in the country is expected to generate the highest rate of returns.
In 2018, governments from more than 76 countries, global funds, organizations and investors pledged $30 billion in loans and investment to rebuild Iraq.
Apart from FDI, primary opportunity areas for global companies also include technology upgrades and manufacturing process improvement across all industries. The Iraqi companies seek to partner with global companies to benefit from their best practices in manufacturing processes.
“As a national development plan, Iraq aims to boost the economy through privatization and development of oil and gas as well as minerals along the value chain. The plan is to not only privatize existing state-owned enterprises but also support SMEs with tax holidays and financial incentives,” said Ali Mirmohammad, senior consultant and business development manager at Frost & Sullivan.
Mineral oil, natural gas and phosphate deposits are among the top natural resources in Iraq that call for huge investment opportunities along the value chain, noted the study.
Frost & Sullivan has also pointed out that lucrative prospects are present for private investors such as banking, minerals, renewable energies, telecommunications, landfills, e-Commerce, recycling, water and sanitation, food and tourism.
“Enabled by the prospect of greater stability and security, Iraq has listed a total of over 212 projects ready for investment across more than 10 sectors. Of these sectors, oil and refineries are the most promising for investors followed by industrial and manufacturing, infrastructure, health and education, energy and agriculture sector,” added Mirmohammad.
To attract foreign investors, the Iraqi government has offered a list of guarantees and privileges which include:
– Tax holidays for 10 years (extendable to 15 years in some cases)
– The right of ownership and protection against seizure or nationalization of the investment project
– The right to deal on the Iraq Stock Exchange, rent or lease lands needed for the project for the term of the investment project, and
– The right to repatriate capital brought into Iraq and many more.
