At a Glance

• A KRG delegation led by Omed Sabah visits Baghdad for pivotal budget negotiations.
• The meetings target disputes over the "actual expenditure" mechanism and regional crude oil refining caps
• Erbil seeks to amend oil agreements to boost regional refining past 50,000 barrels daily.
• Kurdistan is requesting 29 trillion dinars to cover public-sector salaries and employee promotions.

A KRG delegation, led by Omed Sabah, Head of the Council of Ministers' Diwan, and Amanj Rahim, Secretary of the Council of Ministers, is visiting Baghdad to hold a meeting with the Iraqi Minister of Finance.

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Key Statements and Focus Area

• Channel8 has learned that the delegation will meet with Kurdish officials within the Iraqi federal government to garner support for the Kurdistan Region's legal financial demands within its designated portion of the 2027 Iraqi General Budget. 
• While the Kurdistan Region's share in the draft Iraqi budget is currently set at 12.70%, the Kurdistan Region is seeking to fix this rate at 14.14% based on the results of the latest general census.

The Kurdistan Region has demanded a share of Iraq’s sovereign expenditures. However, Baghdad subtracts sovereign expenditures from the general budget before determining the Region’s allocation, a mechanism that directly reduces the Kurdistan Region's final share. 

Another significant hurdle facing the KRG allocation is the "actual expenditure" mechanism, which serves as an additional factor in reducing the Region's budget portion. 

Meanwhile, regarding the Kurdistan Region's oil portfolio, a tripartite agreement exists among the Iraqi Ministry of Oil, the KRG Ministry of Natural Resources, and international oil producing companies. 

This agreement requires an amendment to increase crude oil refining allocations for the Kurdistan Region beyond 50,000 barrels per day, while also establishing fixed financial entitlements for the oil companies.

Speaking to Channel8, Dilan Ghafoor, a member of the Iraqi Parliament's Finance Committee, warned earlier that the Region's financial demands have not yet been secured in the draft 2027 budget bill.

FYI

The draft 2027 general budget law is currently under review by the Iraqi Cabinet and is scheduled to be officially forwarded to parliament by mid-month. 

The KRG delegation's previous visits to Baghdad focused on establishing structural parameters for the 2027 draft budget law through high-level ministerial consultations. Talks with the Ministry of Oil addressed refining caps and international company payouts, while meetings with the Ministry of Finance sought to secure public-sector salaries and employee promotions. 

Additionally, the delegation coordinated with the Ministry of Planning to secure the Kurdistan Region's fair portion of investment allocations and international development loans.

The total volume of the 2027 Iraqi General Budget is estimated between 200 to 240 trillion dinars. Within this framework, the Kurdistan Region has requested approximately 29 trillion dinars to cover employee salaries, job promotions, new hires, and the permanent employment of contract teachers and civil servants. 

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