In Iraq, a country most recognized for its oil production, it’s the micro – small – and medium-enterprises (MSMEs) that bring life and colour to the streets. Despite being the ‘small’ players in business, the private sector (excluding oil) accounts for close to 60% of employment, with MSMEs active in the widest range of sectors and with the greatest opportunities for youth.

In Basra City and Al-Qurna, two cities in the largest oil producing region in the nation, the unemployment rate has risen to at least 30% in recent years. Largely attributed to the lack of government employment opportunities and the skills mismatch of the growing youth demographic, investment in micro- small- and medium-enterprises is bringing new hope and opportunities for economic development.

Since mid-2019, the United Nations Development Programming (UNDP), in partnership with the Norwegian Refugee Council (NRC), has provided targeted support to 319 new and established MSMEs across Basra City and Al-Qurna through business development training and cash-grants. The training worked to build skills that would enable enterprise growth, such as finance and accounting, marketing, human resources and employment management, as well as soft skills such as communication, leadership, negotiation skills, decision making and problem solving.

“I learned the importance of good leadership,” says Labieb, 57, father-of-5 and owner of a cherry and nuts store in Basra City. “I also learned how to best deal with customers and be part of a team.” Following completion of his training and receiving his cash-grant, Labieb was able to hire an additional staff member to manage increased stock and customers and enjoyed a 15% increase in profits.

But like most other cities around the world, the socio-economic impact of COVID-19 was also felt in Basra and Al-Qurna. Businesses took all precaution to prevent the spread of the virus, ensuring the safety of both staff and customers by wearing personal protective equipment (PPE) and adhering to the government curfews, with limited operating hours. By demonstrating solidarity, these business owners were not only able to continue making a livelihood for themselves and their employees, but to set an example for the community.

“As a business owner, I am empowered to build something successful – that I created the plan for, and that enables me to give back to the community,” explains Hisham, 40, father-of-2 and owner of a small five-a-side football stadium in Abu Al-Khaseeb.

For Kawthar and Jenan, both mothers-of-five and owners of successful beauty salons in Basra and Al-Qurna respectively, hygiene and care are always a big part of their daily work. “After receiving the grant, I was able to hire three new staff members and saw my profits increase by 40% – this is because I put together a good business plan, but also because we take the necessary precautions to keep ourselves and others safe,” says Kawther.

MSMEs continue to face challenges to their growth during COVID-19 pandemic, limiting their capacity to hire additional employees, but with the recognition and support they need, could MSMEs be the way forward for economic growth in Iraq?

Sustainable livelihoods through small business development and job placement in Basra

Together with NRC, and generous funding support from the Government of Japan, UNDP has supported 319 MSMEs through training and cash-grants and placed 125 individuals in jobs through private sector partnerships, since mid-2019.

(Source: UNDP)

You are invited to help IBBC and World Bank to introduce Iraqi SME’s to FREE business training courses

WHEN: 29th June, 6pm to 8pm Iraq time

Please share this free business training initiative and the course registration with any SME in your network, however small, and encourage them to sign up.

Arabic version for sharing with your contacts here
WebEx Link: Join Using WebEx

YouTube Livestream: https://www.youtube.com/watch?v=RxeuaarijuE

The Iraq Britain Business Council (IBBC) has been asked by the World Bank to support them in the promotion of business resilience and training courses for SME’s in Iraq.

The driver behind this initiative is to give Iraqi SME’s support to ride out and survive the business effects of COVID-19 pandemic and the effect it has particularly on the smaller businesses in the economy.

The support is in the form of four free business training courses that SME’s can take via Webex or Youtube, provided they sign up.

As a partner to the World Bank, IBBC is contacting our Chambers of Commerce and Union contacts, and those businesses we can alert.

The courses cover four topics :

  1. Business Planning.
  2. Accessing Finance.
  3. Communicating.
  4. Thriving.

We recognise that your suppliers are most likely to be already well prepared, but if there are some who may be finding the current economic climate challenging, these courses will provide a good sense check to best practice.

Please follow this link for the WebEx how-to manual in English

Please follow this link for the WebEx how-to manual in Arabic

Please let us know if there are any further questions by contacting london@webuildiraq.org

We very much hope that your teams will be able to share these courses with your supplier and business ecology.

(Source: IBBC)

Small and Medium Enterprises (SMEs) have been heavily affected by the COVID-19 pandemic, due to the closures and reduced working hours recommended to curb the spread of the virus.

To better understand the impact of COVID-19 on SMEs, IOM Iraq conducted a survey with 456 enterprises active in different sectors in urban areas of Iraq in April 2020.

The study focused on governorates with the highest rates of displacement, returns, and ex-combatants as identified by IOM; a stratified sampling strategy was applied to a database of urban employers in the areas where IOM Iraq’s Enterprise Development Fund (EDF) has been implemented.

The analysis found a significant impact on economic outcomes at the firm level. Effects on sales and production among firms have been the most acute, with temporary reductions in paid employment also observed. These have been especially noticeable within the construction and manufacturing industry, followed by the food and agriculture industry.

For more details, please visit: http://edf.iom.int/home/covsme/en

Click here to Download Report

(Source: IOM)

By John Lee.

The Central Bank of Iraq (CBI) has announced that the repayment of loans obtained under its ‘1 and 5 trillion dinars’ finance initiatives for small and medium size businesses (SMEs) will be suspended for three months.

According to a statement from the Government of Iraq, the move is an attempt to ease the financial burden caused by coronavirus (COVID-19).

(Source: Government of Iraq)

Iraqi government’s finance schemes to support SMEs and business innovation

To support small and medium private-sector projects, the Iraqi government, through the Central Bank of Iraq (CBI) and with the participation of a number of private and state-owned banks, has made available several types of loans.

The loans are available to all Iraqis.

According to a statement from the Iraqi Government, one of the more innovative finance schemes is the Central Bank’s “1 Trillion Dinars Initiative” which is dedicated to supporting small and medium enterprises, as part of the wider Iraqi government strategy to boost economic growth, create new job opportunities, and the production of local goods and services.

(Source: Iraqi Government)

By John Lee.

The Iraqi Government has said it will exempt small- and medium-sized businesses (SMEs) from income tax for ten years.

In a statement, it said:

The government announced a draft amendment to Income Tax Law No. 113 of  1982 to exempt several groups on low-income from paying income tax.

“The proposed amendment also exempts small and medium size businesses from paying income tax for ten years.

“The government also announced that a dedicated team at the Prime Minister’s Office will be responsible for receiving complaints from citizens and will work to remove obstacles caused by red tape.”

The move is the latest in a series of reforms announced by the government in response to continuing protests in the country.

(Source: Govt of Iraq)

The ISIL conflict displaced 6 million people in Iraq, disrupted the national economy and limited employment opportunities for citizens.

Sixty per cent of jobs in Iraq are in the private sector, within Small and Medium Enterprises (SMEs); very large numbers of those businesses experienced loss as a result of the conflict and need support to rebuild.

In Fallujah, for example, an International Organization for Migration (IOM) market assessment found that 69 per cent of construction businesses and 66 per cent of food-related businesses saw their workshops looted or burned between 2014 and 2017. Mosul and numerous other areas also showed high levels of damage and limited access to finance—challenges that EDF is designed to help businesses overcome.

On Monday (05/08), IOM Iraq signed a memorandum of understanding with telecommunications company Asiacell to support innovation under the Enterprise Development Fund (EDF) — a livelihoods programme that contributes to economic recovery and private sector revitalization through tailored support to Small and Medium Enterprises.

The innovation component (EDFi) supports early-stage tech businesses and tech start-ups in Iraq that can contribute to the local economy and create jobs for young people in the tech sector.

“We strongly believe that the engagement of the private sector is a necessary condition for successful and sustainable economic recovery and job creation,” said IOM Chief of Mission Gerard Waite. “IOM Iraq looks forward to a long, productive collaboration with Asiacell, as we work to expand job creation and improve economic opportunities across Iraq.”

“Today marks the start of a strategic partnership between Asiacell and IOM that will bring the EDF-I into effect in Iraq,” added Asiacell CEO Amer Sunna. “Asiacell looks forward to contributing to the development of youth skills and capabilities, and setting the foundation for a powerful and sustainable economy.”

EDF aims to restore essential economic infrastructure by providing financial capital to SMEs in economic sectors that were successful prior to the conflict but suffered loss and damage and have a high demand for labour. By targeting key sectors and providing necessary funding, the EDF encourages rapid but also large-scale job creation. The fund has received hundreds of applications since the pilot phase was launched in September 2018, and 142 business grants have been approved to date.

“After the liberation of Mosul, I sold a small plot of land that I owned and tried my best to reopen my factory,” explained Moufaq Ahmed Mohamed, an EDF beneficiary and owner of an oxygen plant. “I started with only two workers. Later, I received a grant from IOM which enabled me to buy a generator which is crucial to my work.”

“[Before that] I frequently lost hours of work due to sudden power outages,” he continued. “This generator was a boon to my factory; I have been able to produce more, enabling me to hire more people and expand to 11 workers — which means feeding 11 families. This makes me very happy; this kind of support for the private sector contributes to the revival and rebuilding of Mosul.”
EDF forms part of IOM’s work in support of the people and Government of Iraq (GOI) to promote sustainable recovery across the country.

IOM Iraq’s EDF is supported by the USA Department of State’s Bureau of Population, Refugees, and Migration (PRM); the European Commission’s Directorate-General for International Cooperation and Development (DG DEVCO); KfW, the German Development Bank; the Government of the Netherlands; and the United States Agency for International Development (USAID).

(Source: IOM)

IOM Iraq’s Enterprise Development Fund (EDF) encourages rapid, large-scale private sector job creation and economic recovery through tailored support to Small and Medium Enterprises (SMEs).

The EDF is a financing mechanism that provides SMEs with financial capital to contribute to their recovery and/or expansion.

To assess the capacity of the market to absorb medium-sized grants, the EDF market assessment was rolled out in Kirkuk, Fallujah, and Mosul in November 2018.

The assessment was led by IOM Iraq’s Return and Recovery Unit (RRU) and contributes to the necessary groundwork to introduce the EDF in any location.

Please see below the assessments for three governorates:

(Source: IOM)

Top Mountain LLC hosted the first annual Business Canvas Erbil conference which was attended by 120 participants and took place in the Dedeman hotel.

The conference was funded by the European Union and German Federal Ministry for Economic Cooperation and Development through GIZ.

The event was also sponsored by GroFin Iraq, a financing organization that provides loans of up to $2 million to SMEs in Iraq.

The goal of the conference was to inform the audience about the future of economic development in the Kurdistan Region and promote the services of Top Mountain Business Incubator.

Throughout the conference, speakers and panelists reviewed the challenges and opportunities related to the job market and entrepreneurship.

During his presentation on the future of the startup ecosystem in Iraq, one of the Co-founders of Top Mountain explained that within the next few years startups in Iraq will begin to rapidly multiply and grow as financing and technical skills become more widely available.

This predication is based on the rapid growth in startups that has occurred throughout the MENA region over the last 3 years. Some of the key conclusions reached by panelist and speakers are that companies in Iraq must expand their internship programs to help train the next generation of skilled workers.

Panelists also noted that lack of access to finance is the most critical challenge to SME growth. Despite the challenges facing businesses in Iraq, most of the attendees and panelists remain optimistic and anticipate a bright future for Iraq’s economy.

(Source: Top Mountain LLC)

By Hal Miran, Editor-in-Chief, Bite.Tech.

Tech has grown in prominence as a key sector in global economic health. It is now commonly accepted that an economy in which entrepreneurs have the freedom and resources to create and innovate tend to perform much more robustly.

Intriguingly, one study on the effect of tech on a country’s economy has said that there is a much greater positive spillover effect than has been widely thought1.

The world has entered the new dawn of the technology era. Sure, we’ve had major waves of technological advances since the start of the Industrial Revolution in the late 18th century4. But nothing like this.

Artificial Intelligence, the Internet of Things, Robotics and Automation are set to disrupt the entire world, with virtually every major sector already recently disrupted by technological innovation.

It is a safe bet to assume that global tech is set to grow exponentially. The bottom line is that tech has already demonstrated its crucial importance to economic health, which is only set to increase.

What this means is that more than ever, tech entrepreneurs will be needed in this new tech-driven world to power economic growth.

Tech entrepreneurship in Iraq: Breaking the country’s dependence on oil

The oil sector has not been reliable since 2014, with prices fluctuating wildly. So long core for the Iraqi economy, the country can no longer depend exclusively on the fuel. What has occurred in global oil markets in the last few years is a warning that Iraq must pay attention to.

Iraq is so dependent on the fuel that the government, recently asked for the country to be exempt from the OPEC production cut agreement5, as it is desperate to produce as many barrels of oil as it can.

Tech entrepreneurship can break this dependence and help the economy to grow in ways that the oil sector, crucial as it has been for Iraq for so long, can never achieve.

How have other countries benefited from a booming tech sector?

In the U.S, the tech sector accounts for 7% of GDP and employs almost 7 million people2. In the UK, tech accounts for 8% of British GDP3. In these countries and indeed around the globe it is set to grow further, both in developed and developing economies.