Economist describes the establishment of the first Rafidain Bank as an excellent step
1/14/2025
Baghdad
Economic expert, Mustafa Akram Hantoush, described the establishment of the first Rafidain Bank as an “excellent step.
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Yesterday, Monday, the Council of Ministers decided to establish the First Rafidain Bank with a capital of one trillion dinars and a government participation rate of 24%.
Hantoush told Al-Eqtisad News, "Establishing the First Rafidain Bank is an excellent step, especially since it will be a mixed sector company."
He added that the new bank will help the state enhance its payment and electronic transaction capabilities, in addition to assisting the Trade Bank of Iraq in transfers and credits.
In a recent video update, the host discusses significant developments in Iraq’s economic landscape, highlighting Prime Minister Al Sudani’s efforts to attract international investment, particularly from the UK.
Al Sudani’s meetings with British companies and government officials signal Iraq’s commitment to reform and investment opportunities, with a projected investment budget totaling $100 billion over the next three years. The discussions also touch upon Iraq’s strategic initiatives, including the development of new residential cities and the establishment of a robust banking framework aimed at facilitating foreign trade.
With a focus on sustainable growth and international cooperation, the host emphasizes the transformative potential of these developments, particularly in light of Iraq’s vast oil reserves and the anticipated influx of foreign investment, which could reach up to $63 billion in two years.
🌍 International Investment Opportunities: Iraq is actively seeking foreign investment, particularly from British companies, emphasizing the potential for various development projects.
💼 Significant Financial Commitments: Al Sudani announced $100 billion allocated for investment, with an additional projected $63 billion from foreign investments within two years.
🏗️ Real Estate Boom: Plans for one million new housing units demonstrate Iraq’s commitment to addressing housing shortages and stimulating the construction sector.
🌿 Sustainable Development Initiatives:
Bilateral cooperation with the UK includes efforts to combat climate change and enhance cultural exchanges.
🔄 Banking Reforms: Iraq is implementing reforms in the banking sector to facilitate international financial transactions and improve economic stability.
⚓ Strategic Infrastructure Projects: The development of the Strategic Road Project and the Port of Fao is crucial for enhancing Iraq’s economic capacity and trade capabilities.
📈 Global Economic Integration: Iraq’s moves towards international financial practices, including possible integration with Forex markets, indicate a shift towards greater global economic participation.
Key Insights
🌐 Emphasis on International Relations: The host highlights the importance of Iraq’s diplomatic engagements, particularly with Britain. Al Sudani’s meetings with Prime Minister Keir Starmer and King Charles III underline Iraq’s intention to forge strong bilateral ties that could usher in a new era of economic growth and cooperation. This relationship signifies Iraq’s strategic pivot towards Western nations and the potential for enhanced trade partnerships.
🏗️ Investment in Infrastructure: The commitment to developing one million housing units and associated infrastructure signifies a robust government plan to stimulate the economy and create jobs. This initiative not only addresses immediate housing needs but also sets the stage for long-term urban development, attracting both local and foreign investments in construction materials and services.
💰 Financial Sector Reforms: The Central Bank of Iraq’s shift towards more internationally recognized financial practices represents a significant change in how Iraq manages its economic transactions. The introduction of a new mechanism for currency selling, aimed at reducing the gap in the dollar exchange rate, indicates a desire for greater currency stability and international market integration. This reform could enhance the attractiveness of Iraq as a destination for foreign investment.
📊 Anticipated Foreign Investment Surge: The projection of $63 billion in foreign investments over the next two years, coupled with the $100 billion investment budget, paints a promising picture for Iraq’s economic future. This influx of capital is expected to not only bolster the economy but also create opportunities for various sectors, including construction, energy, and services.
🚧 Construction Material Demand: The projected need for factories to support the construction of new housing units highlights a critical opportunity for domestic and foreign investors in the construction materials sector. With significant imports currently fulfilling this demand, local production could reduce reliance on foreign goods, fostering economic self-sufficiency.
🌍 Strategic Development Road Project: The ongoing work on the Strategic Development Road Project and the Port of Fao represents a pivotal development for Iraq’s trade capabilities. This infrastructure will facilitate smoother logistics and transportation, positioning Iraq as a key player in regional trade and commerce.
⚖️ Cultural and Economic Cooperation: The discussions around cultural exchanges and cooperation in addressing climate change reflect Iraq’s broader vision for sustainable development. By engaging in these areas, Iraq can enhance its global standing and attract investments that prioritize social and environmental responsibility.
In summary, the host’s insights present a dynamic and evolving narrative around Iraq’s potential for growth and development. With a strong focus on international investment, infrastructure development, and banking reforms, Iraq appears poised to significantly enhance its economic landscape in the coming years. The government’s proactive approach, combined with its vast natural resources, particularly oil, positions it favorably for attracting international attention and investment. The discussions around sustainability and cultural cooperation further illustrate a well-rounded strategy aimed at long-term stability and growth. The future looks promising, and the host encourages viewers to stay engaged with the developments as they unfold.
The financial adviser to the Prime Minister, Mazhar Mohammed Saleh, revealed on Tuesday the most prominent goal for which the First Rafidain Bank was established.
Saleh said in an interview with “Economy News” that “Rafidain First Bank was established as a commercial bank aimed at building a market economy exclusively, especially in the field of financing and investment.”
He explained that “the difference this time lies in the issue of ownership, which will become a private bank despite the state’s partnership with its capital by 24%, which is a percentage that did not make it within the mixed sector but within the private sector, as long as the state’s participation is below 25% of the capital under the texts of the Companies Law No. 21 of 1997, as amended.”
He added that “the goal is to transfer Rafidain Bank in part to market operations outside the banking government operations, which means opening up to international banks, creating strategic partnerships with international banks and integrating the international investment and financial environment effectively.”
The Council of Ministers decided to establish the first Rafidain Bank with a capital of one trillion dinars and a government participation rate of 24%.
The economist, Mustafa Akram Hannoush, described the establishment of Rafidain First Bank as an “excellent step.”
“The establishment of Rafidain First Bank is an excellent step, especially since it will be a mixed sector company,” Hantosh told “Economy News.”
He added that the new bank will help the country enhance the capabilities of payment and electronic transactions, in addition to that it will be an assistance to the Iraqi Bank for trading in remittances and credits.
I'm extremely excited because that 3rd reading [of the budget amendment] is basically guaranteed.Why would I say such a thing?
Because if they don't do the 3rd reading, 15 days later the budget is exposed...It exposes everything and once it does, then you got to figure out float or basket...
The HCL, like the budget, those two things will expose the new exchange rate...The HCL and the budget will be the first indicator of the new exchange rate IMO.