ABCC E-Bulletin 25.02

50 years of bridging between the UK

bridging business & investment

UK and the Arab World

SPEAKERS LINE UP

Rt Hon Baroness Symons Of Vernham Dean Chairman, ABCC

Mr Bandar Reda Secretary General & CEO, ABCC

Mr Abdeslam El-Idrissi Deputy CEO & SG, ABCC

H E Dr Khaled Hanafy

Secretary General, Union of Arab Chambers

Mr Tim Reid Chief Executive Officer, UK Export Finance

Ms Haifa AlKaylani OBE President & Founder of The Arab International Women’s Forum

Mr Mohamed Al Khadar Al Ahmed Chief Executive Officer, Khalifa Economic Zones Abu Dhabi -KEZAD GROUP

H E Zaher Al Qatarneh

Secretary General of the Ministry of Investment, Hashemite Kingdom of Jordan

Ms Ebtesam Alkaabi Vice President, Sales, Jebel Ali Free Zone (Jafza)

Helen Barrett Partner at CBD Corporate Services

Mr Andrew Elia Managing Director, Arishi

Mr Karim Fatehi MBE CEO, London Chamber of Commerce and Industry

Mr Saied Jouda CEO, Fares for Networks and Information Technology

Mr Chakib Kouidri

Managing Director, CACI - Algerian Chamber of Commerce and Industry

Ms Sarah Mooney

HM Trade Commissioner for the Middle East and Pakistan and British Consul General to Dubai at DBT

Mr Tom Wintle UK - GCC FTA Chief Negotiator, Department for Business and Trade

Mr Jed Mrabet President, Tunisian British Chamber of Commerce

Ms Julia Onslow-Cole Partner, Fragomen

Ms Chapka Othman CEO, Cambridge City Company

Mr Simon Penney CMG Chief Executive Officer, Incrementum ME

Sir David Quarrey Group Head of Public Affairs, HSBC Holdings plc

Mr Derek Redmond Olympic Gold Medallist and Chairman, Right Brain Thinking

Ms Sarah Russis CEO/Host of Bilingual FR/ENG Event Hosting and Expert Communication Services

Dr Peter Thomas Chief Clinical Information Officer and Director of Digital Development, Moorfields Private Eye Hospital

Baroness Manzila Uddin House of Lords

Ms Tracy Vegro OBE CEO, Chartered Institute for Securities & Investment

Sarfaraz Alam, CEO, Hashmove

Gabriele Schiavone, Partner, SGS

Kosar Dara, Cambridge City

Anthony Millard, Executive Chairman, Anthony Millard Consulting

See the website for the latest updates https://abcc.glueup.com/event/4th-arab-british-economic-summit-2025-93156/speakers.html

AGENDA

08:30 - 09:30 REGISTRATION, NETWORKING AND MORNING COFFEE

09:30 - 10:00 WELCOMING & OPENING REMARKS THE RT HON BARONESS SYMONS OF VERNHAM DEAN•MR BANDAR REDA•TIM REID

10:00 - 10:20 UPDATE ON THE GCC-UK FTA TOM WINTLE•NAJLAA HABRIRI

10:20 - 11:10 SESSION 1: ENERGY INNOVATION MODERATOR (MR SIMON PENNEY) MOHAMED AL KHADAR AL AHMED•H.E ZAHER AL QATARNEH•CHAKIB KOUIDRI•SIMON PENNEY CMG

11:10 - 11:40 COFFEE

11:40 - 12:30 SESSION 2: SMART CITIES & NEW FRONTIERS IN AI H.E DR. KHALED HANAFY•ANDREW ELIA•SAIED JOUDA•BARONESS MANZILA UDDIN

12:30 - 13:20 SESSION 3: POWERING UK–MENA TRADE: THE ROLE OF INNOVATION, INFRASTRUCTURE, AND GATEWAY HUBS LIKE DUBAI (MODERATOR JULIA ONSLOW-COLE) SARAH MOONEY•EBTESAM ALKAABI•KARIM FATEHI OBE•JULIA ONSLOW-COLE

13:20 - 14:35 LUNCH

14:35 - 15:25 SESSION 4: HEALTHCARE & EDUCATION (MODERATOR HELEN BARRETT) HAIFA ALKAYLANI OBE•DEREK REDMOND•HELEN BARRETT•PETER THOMAS•ANTHONY MILLARD

15:25 - 16:15 SESSION 5: FINANCE & E-COMMERCE (MODERATOR TRACY VEGRO) TRACY VEGRO OBE•SGS & PARTNERS•SIR DAVID QUARREY•JOSEPH CHAKRA

16.15 - 16:30 CLOSING REMARKS ABDESLAM EL-IDRISSI

16:30 - 18:00 CLOSING RECEPTION

ABCC Hosts Jordan Ministerial Roundtable

Wednesday, May 14, 2025

The ABCC was proud to welcome a distinguished delegation from the Hashemite Kingdom of Jordan on Wednesday 14 May for a ministerial roundtable focused on high value investment opportunities in the country.

The Chamber was honoured to host two key ministers from Jordan for the discussions with UK investors and businesses; His Excellency, Mr Mothanna Gharaibeh, Minister of Investment, and Her Excellency Ms Zeina Toukan, Minister of Planning and International Cooperation.

The event proved highly effective in promoting the considerable opportunities available to UK companies for doing business in Jordan’s diversified and growing economy.

The event held in the auditorium at the Chamber’s Mayfair premises attracted a capacity audience of business executives, diplomats, investors, exporters, manufacturers and consultants keen to do business with Jordan.

It was discovered that a majority of the attendees already had positive experiences of visiting Jordan, which Baroness Symons described as a wonderful country.

The main presentation was delivered by the Investment Minister, whose dynamism and innovative advocacy of Jordan’s potential was strongly commended by the Rt Hon Baroness Symons of Vernham Dean, ABCC Chairman, who chaired the meeting.

The ministers were accompanied by senior members of the Jordan Embassy’s diplomatic team.

Baroness Symons in her welcoming remarks spoke warmly of her personal experiences of visiting Jordan and in

Minister of Investment, H E Mr Mothanna Gharaibeh, seated alongside Mr Bandar Reda (left)

particular she shared memories of meetings with members of the kingdom’s royal household. Personal friendships were the basis for successful cooperation in business and in other areas, she stressed. The Baroness described the relationship enjoyed by the UK and Jordan as an outstanding and very special one.

Mr Abdeslam El-Idrissi, ABCC Deputy CEO & Secretary General, reiterated the positive views expressed by Baroness Symons about Jordan and indicated his pride in introducing H E Mr Mothanna Gharaibeh, whose remarks dwelt on Jordan’s diverse capabilities and major assets including its highly skilled workforce of exceptional engineers and technicians.

The Minister explained how Jordan provided investors with access to global markets of $50 trillion as a result of the country’s success in negotiating favourable free trade deals with international partners such as the UK.

Numerous world leading IT corporations were now doing business in Jordan having been attracted by incentives that enabled companies to thrive as manufacturers and exporters.

Jordan boasted a resilient economy and was a reliable partner in helping firms to grow using the country as a base for developing exports, the Minister said. H E Mr Gharaibeh outlined the country’s vision to create one million new jobs, and which would be achieved in partnership with foreign investors.

The Minister shared details of some ambitious mega projects that Jordan was presently pursuing, in sectors as varied as transport, infrastructure, gas fields and renewable energy.

The economy was becoming more diversified witnessed by its achievements in supplying tech products and engineers to organisations like NASA and fertilisers to the European Union countries in the wake of the war in Ukraine.

He stressed that Jordan had a great future through building stronger partnerships, and it was seeking to become a centre for high value manufacturing as well as a hub for pharmaceuticals worldwide.

He forecast that Jordan would be able to make a major contribution to the reconstruction of its neighbour Syria in coming months.

Mr Bandar Reda, ABCC Secretary General & CEO, welcomed the second Jordanian Minister, Ms Toukan, to share her observations, who drew attention to the important water projects that Jordan was undertaking in partnership with foreign investors.

Ms Toukan also mentioned major new projects in developing renewables, such as wind and solar, and how the country was also upgrading its storage, connectivity and energy networks.

The Minister of Planning explained that Jordan was seeking as far as possible to diversify its energy sources and developing innovations to address water scarcity as a priority. These sectors required a massive injection of investment finance.

Jordan’s plans to develop green hydrogen projects should also interest global investors, the Investment Minister said.

The substantial level of interest awakened in the audience was reflected in the many questions that were asked and which covered topics like education, legal reform, communications, healthcare and public-private partnerships.

Immediately before to the presentations, two short videos were screened to the audience: one concerning sponsorship and exhibiting opportunities available at the forthcoming ABES2025 and the other on unleashing the potential of Jordan from the Invest Jordan, the country’s official investment promotion agency, which set out the positive message developed in the Minister’s speech.

In concluding the discussion, Baroness Symons paid tribute to the drive and determination expressed by the ministers in the potential of their country to achieve success. The roundtable had opened up new opportunities for collaboration between UK business and Jordan. Those seeking further information about the market were advised to consult Invest Jordan.

Rt Hon Baroness Symons of Vernham Dean

His Excellency, Mr Mothanna Gharaibeh, Jordan’s Minister of Investment

Ambassadorial Roundtable on Tapping the Reconstruction of Sudan

Thursday, May 15, 2025

The Ambassador of Sudan, H E Mr Babikir Elsiddig M. Elamin, made a tremendous impact on the audience of investors at the ABCC’s ambassadorial roundtable hosted on Thursday, 15 May 2025.

The Ambassador spoke on the theme of Tapping the Reconstruction of Sudan, providing an enlightening perspective and wealth of detailed information to shed light on the enormous potential of Sudan and its diverse largely untapped resources.

Chaired by Mr Bandar Reda, ABCC Secretary General & CEO, accompanied by Mr Abdeslam El-Idrissi, ABCC Deputy CEO & Secretary General, the roundtable attracted a large audience of British executives and diplomats, including energy professionals, legal experts and strategy consultants. All were visibly impressed by the outline of the vast opportunities in the Ambassador’s presentation.

His Excellency began by stressing the significance of the meeting as a means of developing a greater awareness among UK business of the abundant

The Ambassador of Sudan, H E Mr Babikir Elsiddig M Elamin (speaking), flanked by Mr Bandar Reda, ABCC Secretary General & CEO (right), and Mr Abdeslam El Idrissi, ABCC Deputy CEO & Secretary General (left).

commercial and investment potential of Sudan. He warmly thanked the ABCC for its strong support and foresight in organising the event and paid tribute to the Chamber’s historic role in strengthening trade and partnership between the UK and the Arab world.

The Ambassador insisted that the security situation was improving significantly, the majority of Sudan was stable with the main commercial hubs functioning normally in the capital and elsewhere. He invited potential investors to participate in the economic rebirth of Sudan as it embarked on its journey towards reconstruction and renewal.

The investment opportunities were immense spreading across a broad spectrum of areas, including the rebuilding of essential infrastructure, major buildings, universities, public utilities, roads and new ports, among others.

Electricity, water and telecommunications were key areas where important projects were planned with the support of foreign investors and by harnessing innovative ideas from strategic business partners.

The Ambassador mentioned that companies from many other major countries were already engaged in Sudan’s reconstruction and made it clear that the country welcomed more involvement from the British business community.

The huge mostly untapped natural and mineral resources were a principal attraction of the country. Mineral wealth such as gold, copper, zinc, tin, chromium, iron, combined with rare earths along with oil and gas, provided unlimited lucrative opportunities to investors.

The development of the mining industry was one of Sudan’s greatest strengths and offered incredible potential.

In addition, given that only a relatively small fraction of the country’s fertile arable land had ever been commercially developed there were major opportunities in the modernisation of agriculture. With the appropriate investment the country could be transformed into a major supplier of food to global markets. Cattle rearing could boost meat exports, dairy produce, fruit and vegetables, rich varieties of grains, could all be substantially expanded with the injection of capital, access

to new technology and innovative approaches in agribusiness. Partnerships were urgently required to fulfil these ambitions.

In concluding, the Ambassador stressed that Sudan was driven by a vision of building a strong market based economy that was fully open to foreign investment, and it possessed the resources, the vision, and the capacity to succeed in its endeavours mainly through empowering the private sector to become far more actively engaged.

Sudan boasted several key institutions to support investors such as new free zones, the Ministry of Investment, the Khartoum Stock Exchange, along with favourable incentives and legal mechanisms in place to enable businesses to succeed in the market.

Following the Ambassador’s impassioned advocacy an informed discussion took place with delegates awakened to the many rich opportunities opening up in Sudan today.

Mr Reda thanked the Ambassador for his impressive elucidation of the benefits of investing and doing business in the country. Mr Reda pledged the ABCC’s continued support for deepened UK business involvement in Sudan, while Mr El-Idrissi stated that the Chamber would be extremely keen to welcome a Sudanese delegation to join the forthcoming ABES2025 where they could explore further the potential for cooperation with UK companies..

H E Mr Babikir Elsiddig M Elamin.

Second ABCC Members’ Networking Event of 2025

On the afternoon of 29 April, the ABCC was delighted to welcome members and friends to the Chamber offices for the latest Members’ Networking Event, which showcased members from various sectors who delivered presentations to an appreciative audience.

Members and guests were greeted by Mr Bandar Reda, ABCC Secretary General & CEO, and the discussion was hosted by Mr Abdeslam El-Idrissi, ABCC Deputy CEO & Secretary General.

The ABCC expressed its thanks to all the members who spoke at the event and shared their expertise during their insightful presentations.

The speakers introducing their companies and activities were as follows:

Mahmood Tassadaq, Chairman, Gatestone Corporate Services Providers LLC.

The meeting heard that the company, which is trading as Gatestone Group, is a Dubai based business consultancy offering a variety of services to its clients,

including company formation in the UAE, Saudi Arabia and the UK, Taxation, Legal Advisory and Accountancy Services, Business Administrative Services, CSP, Marketing Management and Public Relations. The company has offices in Dubai, London and Jeddah.

Aster Thackery, Italian Trade Agency (ITA), London office.

Mr Abdeslam El-Idrissi

Mr Bandar Reda

Ms Gergana Ivanova, SGS & Partners Limited

The Italian Trade Agency is the Italian governmental agency that supports the business development of Italian companies abroad and promotes foreign direct investment (FDI) into Italy. The office is interesting in building links with Arab investors. The ITA’s London team provides market intelligence, location scouting, regional connections, market entry assistance, guidance on operational establishment and aftercare services to companies seeking to do business and invest in Italy.

Mohammed Hafejee, Latitude Law. Latitude Law Ltd is a Manchester based immigration specialist legal firm that specialises in all UK-inbound immigration issues, from helping businesses to recruit overseas workers to individuals seeking to reach their goal of living and working in the UK. As well as

Manchester, the firm has lawyers’ offices in offices in London and Brussels, where the expert teams deal with the multitude of complex legal cases involving businesses, individuals and families.

Gergana Ivanova, SGS & Partners Limited.

SGS & Partners are an independent international firm of business consultants and accountants, operating under the umbrella of a chartered accountancy practice. The firm’s staff support clients in their tax and legal matters, including corporates, financial entities and private clients. Through its office in London, and a network of long-standing relationships with other leading professional firms, SGS & Partners can assist clients fully with cross-border transactions in most key business centres around the globe.

Michele Ammirati, Managing Partner, Welltax Limited.

WellTax is a UK and UAE based boutique tax and business advisory firm, specialising in corporate structuring, taxation, financial planning, and crossborder business strategy. With offices in London and Dubai, the company helps businesses navigate complex international tax and financial regulations efficiently. WellTax’s key differentiator is its bespoke approach. “Unlike larger firms that offer standardised accounting services, we provide tailored financial and tax solutions, particularly for internationally active businesses,” Michele Ammirati said.

Rebecca Cole from 3s Money Club Limited, was to have joined the panel of who had speakers but unfortunately had to drop out at the last minute. He contribution will be rescheduled for one of our future networking events.

Non-members present in the audience were invited to join the Chamber to make full use of the tailored services designed to assist companies engaged in doing business with the Arab world and in taking up the many opportunities available in these high growth markets.

Attention was also drawn to the exclusive membership offers that were available in relation to the ABCC’s forthcoming Arab British Economic Summit 2025.

The event concluded with a reception where delegates and visitors were able to continue their discussions and explore ideas in the informal social gathering.

Mr Mahmood Tassadaq, Chairman, Gatestone Corporate Services Providers LLC.

Mr Mohammed Hafejee, Latitude Law.

Mr Michele Ammirati, Managing Partner, Welltax Limited.

From left: Ms Aster Thackery, Italian Trade Agency (ITA), London office, Mr Michele Ammirati, Ms Gergana Ivanova and Mr Mahmood Tassadaq.

UPCOMING ABCC EVENTS

ABCC Members’ 3rd Networking Event

Wednesday, July 9, 2025 (15:00 - 18:00) GMT+1 // London

The Arab-British Chamber of Commerce is delighted to host its Third Members’ Networking event of this year, to be held at our premises, 43 Upper Grosvenor Street, London, W1K 2NJ.

Representatives from ABCC member companies from various sectors will be delivering five-minute presentations about their businesses before our diverse audience of ABCC members, colleagues and friends from the Arab-British business communities and diplomatic corps.

We look forward to receiving you at this event, to which members and non-members are all encouraged to attend.

A reception will follow the members’ presentations.

ABCC Summer Reception

Thursday, July 24, 2025 (16:00 - 19:00) GMT+1 // London

The ABCC is delighted to announce that it will be hosting its Summer Reception. We hope you can join us for what promises to be an enjoyable networking afternoon when we will be joined by the Arab ambassadors, diplomats, ABCC members, and other distinguished guests. The reception will be held at the ABCC premises commencing at 4:30 pm. Canapes and drinks will be served.

Please RSVP as soon as possible, as places are limited and will be on a first come first served basis

Dress code Business attire

ABCC Membership

ABCC New Members

We extend a welcome to our new members.

Jebel Ali Free Zone Authority (JAFZA)

HCR Law LLP - Gold

Gulf Glass Factory LLC (Gulf Glass)

TepAlanfas Co - Gold

Fares for Networks and Information TechnologyGold

NAJM ALTHIMAR FOR IMPORTING FOODSTUFFSGold

Italian Trade Agency - London Office - Gold

Maison-Chef Ltd

EXILLIUM DMCC

Radwa Food Co LtdPLATINUM

Resicare Alliance

Your Self Centre ltd

Zedra Trust Company (Jersey)

Pinnacle Strategies Limited

IIG Estates Limited - Gold

Envoy Global United Kingdom Limited

Pioneers Consulting Ltd

KonnectNow

Abbottsway Engineering Ltd

Forsters LLP

BDM Partners

Sandstone Tax

Trademark Group of Companies

Septimius Security

3s Money Club Limited

WellTax Limited

SGS & PARTNERS LTDPLATINUM

Kent Foods Ltd

CBD Corporate ServicesPLATINUM

Acme Energy Services Ltd

Post Op

IBISS & Co Limited

IPI Consulting Ltd

LIBYA

Country Name: State of Libya

Capital: Tripoli

Total area: 1,759,540 sq km

Border countries: Egypt, Tunisia, Algeria, Niger, Chad and Sudan

Mediterranean coastline: 1,770 km (1,100 miles)

Population: 7.38 million (2024)

Natural resources: petroleum, natural gas, gypsum

Agricultural produce: potatoes, watermelons, tomatoes, onions, dates, milk, olives, chicken, wheat, vegetables

Industries: petroleum, petrochemicals, aluminium, iron and steel, food processing, textiles, handicrafts, cement

Manufacturing sector: food processing, textiles, and construction materials

Exports: crude and refined petroleum, natural gas, gold and scrap iron

Imports: refined petroleum, motor cars, garments, broadcasting equipment and tobacco products.

Apart from its long Mediterranean coastline, Libya shares land borders with six countries, Egypt, Sudan, Chad, Niger, Algeria and Tunisia.

The State of Libya is made up of 22 governorates and while the future governance structure remains in a process of transition, a Government of National Unity is recognised internationally and by the UN. The country is taking measures towards

fostering a more stable, diversified and sustainable economy.

The reconstruction of Libya offers substantial investment opportunities in rebuilding infrastructure, renewable energy, and adoption of information technology. The country’s strategic location makes it a gateway for trade between Africa and Europe, presenting notable logistical advantages.

Libya holds the largest proven oil and gas reserves on the African continent and is a major oil producer. As a member of OPEC, the country has 48.4bn barrels of proven crude oil reserves along with 1.5trn cu metres of proven natural gas reserves, which make it a strategic player in the regional and global hydrocarbons industry. The country is dependent on oil for most of its revenue. The National Oil Corporation (NOC) is responsible for the country’s exploration and production. Libya is seeking to increase the presence of global oil majors in its domestic industry and boost production efficiency and output. Oil corporations interested include TotalEnergies, Eni, ConocoPhillips, OMW, Repsol among others.

Libya’s rising urban population shows the need for more housing, food, drinking water and highlights a need for creating employment opportunities. Meanwhile, improving health care, education and transport are essential priorities. Companies from countries like Egypt, Germany, Italy, Tunisia and Turkey, alongside the UK, are seeking to become partners with Libya in the major reconstruction projects that are to be implemented over the coming decade. The country’s reconstruction needs are estimated at around $134 billion. Private investment is expected to be critical to drive successful developments and is expected to account for 60% of project financing, with the remainder coming from public funds.

New Measures

In recent years, Libya has adopted various economic reforms aimed at enhancing its regulatory framework and attracting foreign investment. Such measures include streamlining the business registration process, improving transparency and efficiency. Strengthening property rights has boosted investor confidence. Efforts to diversify the economy extend to renewable energy, agriculture, and manufacturing, in a bid to reduce dependence on oil revenues.

Infrastructure

The infrastructure pillar of Libya’s Vision 2030 outlines the key objectives that include evaluating existing infrastructure developments to ensure that they fully align with broader national priorities. A national infrastructure fund and strategy aims to secure financing and allocate funds to agreed projects. A publicprivate partnership framework aims to attract financing that will be distributed according to merit and transparency. New planned developments will facilitate the growth of local businesses and make the country more attractive to foreign investors, thereby generating economic growth.

In the absence of a unified state budget for the Eastern and Western parts of the country, public salaries, operating expenses, and subsidies continue to be prioritised. Foreign exchange reserves stood at $82 billion at the end of 2023. In August 2023, the Libyan Central Bank (CBL) announced its reunification with its eastern branch. The capital adequacy ratio averaged 17.5% over 2019–2022, above the CBL’s threshold of 12.5%.

The ratio of nonperforming loans to gross loans is high, estimated at 23.1% in the third quarter of 2023.

Growth Prospects

The IMF advised that it would be critical to address the challenges facing the private sector in order to foster the economic diversification of Libya. The level of informality remains given ongoing uncertainties and the weak regulatory framework for businesses. Lack of access to finance and foreign currency, dominance of public employment, and poor governance were major impediments to growth, the IMF has said.

Banks in Libya lack a well-defined framework for extending credit since the issuance of the law banning interest, observed the IMF, so Libyan authorities should initiate a comprehensive economic reform plan focused on private sector development, starting with upgrading regulatory frameworks, enhancing access to finance, and improving the security situation.

Going forward governance reforms are seen as key to supporting sustainable economic growth. Positive steps by the CBL taken to improve the banking governance frameworks have been welcomed. Additionally, the IMF sees as noteworthy measures taken by Libya to improve transparency, such as the publication of annual reports of the Libyan Audit Bureau, and the adoption of a country anticorruption strategy.

The economy was projected to grow at 7.9% in 2024 and 6.2% in

2025, assuming oil and gas prices and production remained stable, the African Development Bank has said. The AfDB also said inflation was forecast to remain subdued at around 2.8% in 2024 and 2.6% in 2025, reflecting expected stability in global food prices. The fiscal surplus is projected to improve to 4.2% of GDP in 2024 and to 8.7% in 2025, while the current account surplus is expected to remain at double digits in 2024 and 2025 due to projected increases in oil and gas exports. Libya’s political and security situations have remained fragile, the economy highly dependent on oil and gas, while the country is vulnerable to the impact of climate change. A slowdown in global economic growth negatively affecting international oil prices, could pose risks to revenues.

Libya possesses the financial resources to support a structural reform programme. Historically, Libya has not needed to rely on external borrowing given abundant foreign reserves obtained from oil and gas exports. However, reform of the global financial architecture to increase development lending and make it more affordable could create incentives for Libyan authorities to turn to external borrowing, the AfDB said. Substantial financing is needed for the country’s reconstruction plans. Structural transformation requires achieving stability and building strong and efficient institutions, in addition to implementing structural reforms to create a conducive environment for private investment and build modern and sustainable infrastructure. >>>

Libya’s Country Profile

Banking & Finance

Dispute over leadership of the Central Bank of Libya in August 2024 and the associated disruption in oil production weighed on growth in 2024, the IMF observed. As a result, output was estimated to have contracted, driven by the forced contraction in hydrocarbon GDP, but offset somewhat by the expansion in non-oil activities fuelled by sustained government spending.

Following the resolution of the dispute, oil production rebounded and is now approaching 1.4 million barrels per day.

The banking sector successfully increased capital and enhanced financial soundness metrics, according to the IMF, reporting in April 2025. In late 2022, the CBL instructed banks to increase their capital to meet Basel II regulatory requirements, and the majority of banks met their targets in 2024, resulting in a doubling of paid-in capital. Additionally, financial soundness indicators for banks strengthened, with significant improvements in nonperforming loan ratios. Private sector credit growth remained strong in 2024, primarily in the form of Murabaha financing to retail customers and salary advances to public employees, whereas corporate financing was limited.

The CBL devalued the country’s currency, the dinar, by about 13 percent in early April 2025 and further tightened foreign exchange restrictions to alleviate pressures on reserves. The IMF advises that the CBL develop an effective domestic monetary policy framework with a well-defined policy rate to serve as a reference for banks in Libya.

Such a framework would allow the CBL to react to changing macroeconomic conditions, alleviate the recurring depreciation pressures on the Libyan dinar, and provide a benchmark for pricing of credit by banks and other financial institutions.

The Ministry of Finance has held talks with the Islamic Development Bank (IsDB) to explore support for a number of development initiatives in the country. The ministry hosted an IsDB delegation in Tripoli May 2025 where talks focused on Libya’s sustainable economic strategies and plans to enhance partnerships between public and private sectors, among other matters. Libya is exploring how Islamic finance can contribute towards supporting the growth of SMEs by

providing access to finance. It is reported that the Ministry of Finance and IsDB discussed a 2025–2028 country partnership programme.

Oil & Gas

It has been announced that Tripoli will host the Libya Energy & Economy Summit from January 24 to 26, 2026, a major international event that will bring together government ministers, policymakers, oil executives, financial institutions, and associated technology providers with the aim of boosting inward investment and stimulating growth in the country’s vital energy sector.

The conference will mark the first major gathering of the industry in the country following the launch of Libya’s 2025 licensing round — which was its first in 17 years — and which includes 22 onshore and offshore exploration blocks. Libya currently has 167 active contractual blocks, with a reported exploration success rate of 33%.

Libya’s Ministry of Oil and the National Oil Corporation (NOC) are aiming to double oil production to 2 million barrels per day in coming years. The fourth Energy Investment Expo 2026 will highlight investment opportunities, particularly in natural gas development and infrastructure. Expanding the role of the private sector, including both domestic and international, is seen as a key policy focus and will be central to the conference’s agenda.

As part of the licensing round, the NOC has held roadshows for international investors in cities such as London, Houston and Istanbul. Minister of Oil and Gas, Khalifa Abdulsadiq, has emphasised Libya’s strategic location near major economic hubs such as Europe, in addition to emerging markets. The Minister has noted that Libya holds the largest proven oil and gas reserves on the African continent. With stability returned to Libya, it is becoming a most promising environment for investors opening the door for exploration activities.

The tender process for the licensing round is scheduled for November, with contracts expected to be signed between 22 and 30 November 2025.

Misrata Free Trade Zone (MFZ)

In a bid to attract foreign investors, Libya has established the Misrata Free Zone which offers major incentives to for foreign entities, including no personal income tax, no corporate tax, no VAT, and no custom duties. These financial incentives mean that MFZ is a premier hub for international corporations aiming for a successful presence in the Libyan market.

Environment and Resources

Libya is one of the driest and most water-stressed countries in the world, but efforts to address climate-related challenges have been impeded by security challenges and political unity. In September 2023, Storm Daniel caused major flooding in the Libyan coastal town of Derna, leading to major damage to local infrastructure and loss of lives. The flooding highlighted the impact of climate issues and poor maintenance of dams, which ruptured during heavy rains. The incident pinpointed the urgency of strengthening management of essential public infrastructure.

Energy Efficiency

In May 2025, the United Nations Development Programme (UNDP) and the Libyan Iron and Steel Company (LISCO) signed a Memorandum of Understanding (MoU) to strengthen joint efforts to improve energy efficiency and reduce industrial greenhouse gas emissions. As the largest industrial utility in Libya, LISCO consumes approximately 4-5% of the country’s national gas and electricity. Steel and cement production processes also release significant greenhouse gases. This new partnership aims to lower the rate of emissions by improving energy performance, integrating renewable energy and integrating other lowcarbon practices. The cooperation was welcomed as an important step toward achieving the company’s environmental and economic goals, while supporting the sustainability and performance of Libya’s iron and steel industry through clean energy transition and improved energy practices. The deal shows Libya and UNDP working closely to address climate change mitigation and improve energy efficiency.

The Future

Libya is taking steps to build a better business environment and economic diversification through encouraging a more active participation of the private sector. A more diversified economy would create new sources of revenue and reduce the heavy dependency on oil revenue which makes the country vulnerable to global oil market fluctuations. The UNDP has highlighted some key sectors where there is real potential for creating a more diversified economy in future. These are tourism, technology, renewable energy, the transit trade, the food industry and financial services.

In terms of tourism, UNDP says that Libya has untapped potential to attract both domestic and international visitors. The country’s unique natural landscape and cultural heritage combine to present an ideal opportunity for developing adventure tourism activities and heritage tourism. In addition, Libya has the potential to expand medical tourism in the more scenic natural resorts.

A future Libya can drive innovation and growth by developing its digital economy. The technology sector is ripe for transformation, observes the UNDP, which stresses the need to foster public-private partnerships and implement inclusive legislation.

With its abundant natural resources, Libya has the potential to build a thriving renewable energy industry by harnessing private sector participation

Libya’s Country Profile

Meanwhile, a future financial system in Libya would serve small and medium-sized enterprises (SMEs) by promoting e-finance services as part of a more digitally inclusive financial landscape.

These are some of the measures that the UNDP has said can shape Libya’s future prosperity by creating a productive sustainable economy that maximises the potential of the country’s abundant human and natural resources.

Alongside UNDP and other international partners, Libya is working to promote inclusive economic recovery, institutional strengthening and public-private partnership. Rich in natural resources, Libya has the potential to become a key player in global trade and the international energy market once it has overcome outstanding challenges.

Libya’s Banking, Finance, and Investment Landscape: Lessons Learned and Outlook

Libya stands at a pivotal juncture in its economic evolution. After over a decade of political fragmentation and conflict, the nation is striving to stabilise its financial institutions, attract investment, and diversify its economy. This editorial examines the key lessons from recent reforms in banking and finance, the challenges that persist, and the prospects for sustainable investment-led growth.

Banking Sector: Reforms Amidst Fragmentation

Libya’s banking sector has undergone significant restructuring in recent years. The Central Bank of Libya (CBL) mandated commercial banks to bolster their capital reserves to meet Basel II standards. By 2024, most banks had achieved this, effectively doubling their paid-in capital and improving financial soundness indicators, including a reduction in non-performing loans .(IMF)

However, the sector remains constrained by limited corporate lending, with credit primarily extended through Islamic Murabaha financing to retail customers and salary advances to public employees . The dominance of state-owned banks and the absence of a unified national budget continue to impede comprehensive financial planning. The CBL’s 13% devaluation of the dinar in April 2025 underscores the challenges in maintaining monetary stability amidst political divisions .(IMF, Reuters)

Investment Climate: Navigating Uncertainty

Libya’s investment environment is characterised by both potential and peril. The nation’s substantial hydrocarbon reserves and strategic location offer significant opportunities. Yet, political instability and a lack of regulatory clarity deter foreign direct investment (FDI). The establishment of five SME funds in major cities in 2025 aims to stimulate entrepreneurship and diversify the

economy .(African Development Bank Group, SME Finance Forum)

Despite these initiatives, the private sector remains underdeveloped, with the public sector employing approximately 85% of the workforce . The banking system’s risk-averse nature further limits access to finance for businesses, particularly in green and digital sectors .(U.S. Department of State, GTAI – Invest in Germany)

Lessons Learned: The Imperative of Cohesive Governance

The fragmentation of Libya’s central banking authority has had profound economic repercussions. The 2024 crisis, marked by the dismissal of the CBL governor and subsequent oil production shutdowns, highlighted the critical need for unified financial governance . The UN-brokered agreement to appoint a new interim governor represents a step towards restoring confidence and stability. (BTI 2024, IMF, The Guardian)

Moreover, the illicit oil trade, facilitated by fuel subsidies and weak oversight, continues to siphon resources and fund rival factions, undermining national unity and economic integrity . Addressing these systemic issues is essential for fostering a conducive environment for investment and growth.(Financial Times)

Outlook:

Towards Sustainable Economic Development

The outlook for Libya’s economy hinges on several factors:(Reuters)

Oil Production Recovery: Projections indicate that oil output could exceed 1.5 million barrels per day by the end of 2025, potentially boosting GDP growth to 9.6% .(Minbar Libya)

Economic Diversification: Efforts to promote non-oil sectors, including agriculture, manufacturing, and services, are crucial for long-term stability. The establishment of SME funds and support for green industries signal a commitment to diversification .(SME Finance Forum)

Fiscal Reforms: Implementing a unified budget and reducing reliance on subsidies can enhance fiscal discipline and attract investment. The IMF emphasises the need for wage and

energy subsidy reforms to achieve intergenerational equity .(Reuters, IMF)

Institutional Strengthening: Reunifying the central bank and enhancing regulatory frameworks are vital for restoring investor confidence and ensuring financial stability.

Conclusion

Libya’s journey towards economic revitalisation is fraught with challenges, yet the recent reforms in banking and finance offer a foundation for progress. By fostering cohesive governance, diversifying the economy, and strengthening institutions, Libya can unlock its potential and pave the way for sustainable development.

Sources:

International Monetary Fund, “Libya: Staff Concluding Statement of the 2025 Article IV Mission,” April 2025.(IMF) https://www.imf.org/en/News/ Articles/2025/04/15/mcs-04162025-libya-staffconcluding-statement-of-the-2025-article-ivmission?utm_source=chatgpt.com

Reuters, “Libya devalues currency for first time in four years,” April 2025.(Reuters) https://www.reuters.com/markets/currencies/ libya-devalues-currency-first-time-four-years2025-04-06/?utm_source=chatgpt.com

The Guardian, “Libya central bank deal could resolve ‘all political issues’, says head of state,” September 2024.(The Guardian) https://www.theguardian.com/ world/2024/sep/27/libya-centralbank-deal-resolve-political-issues?utm_ source=chatgpt.com

Financial Times, “The illicit oil trade that is keeping Libya divided,” March 2025. (Financial Times) https://www.ft.com/content/

Banking & Finance

U.S. Department of State, “2024 Investment Climate Statements: Libya.”(U.S. Department of State) https://www.state.gov/reports/2024-investmentclimate-statements/libya/?utm_source=chatgpt.com

African Development Bank, “Country Focus Report 2024 - Libya.”(African Development Bank Group) https://www.afdb.org/sites/default/files/ documents/publications/cfr_2024-_libya_anglais_ final.pdf?utm_source=chatgpt.com

Policy Center for the New South, “Why Libya’s Businesses Struggle to Raise Finance,” April 2025. (Policy Center) https://www.policycenter.ma/publications/whylibyas-businesses-struggle-raise-finance?utm_ source=chatgpt.com

World Bank, “Libya’s Economic Outlook: Pathways to Sustainable Growth and Increased Productivity,” December 2024.(World Bank) https://www.worldbank.org/en/news/pressrelease/2024/12/17/libya-s-economic-outlookpathways-to-sustainable-growth-and-increasedproductivity?utm_source=chatgpt.com

African Development Bank, “Libya Economic Outlook,” 2024.

Diversifying Libya’s Energy Future

Libya, endowed with Africa’s largest proven oil reserves, has long been a pivotal player in the global energy landscape. Yet, recent years have underscored the vulnerabilities inherent in an oil-dependent economy, prompting a strategic pivot towards diversification and sustainability.

Sector Focus: Oil & Energy

Current State of the Oil Sector

Libya’s oil industry, central to its economy, boasts proven reserves of approximately 48.4 billion barrels. The National Oil Corporation (NOC) reported production levels surpassing 1.4 million barrels per day (bpd) in early 2025, edging closer to the pre-civil war peak of 1.6 million bpd. (Reuters) However, the sector remains susceptible to disruptions due to political instability and infrastructural challenges.

To rejuvenate the industry, Libya announced its first oil exploration bidding round in over 17 years, offering 22 blocks for development. (Reuters) This move aims to attract foreign investment and modernize the sector.

Major Players: Eni and TotalEnergies

International oil companies have been instrumental in Libya’s energy sector. Eni, the Italian energy conglomerate, resumed onshore exploration activities in 2024 after a decade-long hiatus, signaling renewed confidence in Libya’s potential. (S&P Global) In 2023, Eni signed an $8 billion gas production agreement with the NOC, underscoring its commitment to the region. (Reuters)

Similarly, France’s TotalEnergies has intensified its engagement, launching new exploration projects and collaborating on renewable energy initiatives. (World Oil) These partnerships not only bolster Libya’s oil output but also facilitate knowledge transfer and technological advancement.

Investment in Solar and Wind Energy

Recognizing the imperative for diversification, Libya is harnessing its abundant solar and wind resources. The Renewable Energy Authority of Libya (REAOL) has outlined ambitious plans to integrate renewables into the national grid. Notably, a 500 MW solar project in Al-Sadada, developed in collaboration with TotalEnergies and GECOL, exemplifies this commitment. (Energy Capital & Power)

International partnerships are pivotal to this transition. Libya has engaged with Türkiye to establish a renewable energy consortium, leveraging Turkish expertise and investment to accelerate the deployment of clean energy infrastructure. (Middle East Monitor) Additionally, discussions with European nations, including Malta and Greece, are underway to explore the export of renewable electricity via undersea cables. (PVKnowhow)

Summary of Libya’s Long-Term Energy Strategy

Libya’s long-term energy strategy is anchored in diversification, sustainability, and economic resilience. The government aims to generate 22% of its electricity from renewable sources by 2030, reducing reliance on hydrocarbons and mitigating environmental impacts. (Energy Circle)

This strategic shift is supported by structural reforms advocated by international institutions. The International Monetary Fund emphasizes the need for fiscal consolidation, institutional strengthening, and private sector development to ensure long-term stability. (energynews)

Lessons Learned and Outlook

Libya’s journey underscores the risks of overdependence on a single resource. The volatility of oil markets, coupled with domestic challenges, has highlighted the necessity for a diversified energy portfolio. Investments in renewables not only promise energy security but also economic diversification and job creation.

While challenges persist, including political fragmentation and infrastructural deficits, Libya’s proactive engagement with international partners and commitment to reform signal a promising trajectory. The integration of renewable energy into the national framework positions Libya to emerge as a regional leader in sustainable energy.

References

“Libya announces first bidding round for oil exploration in 17 years,” Reuters, March 3, 2025. (Reuters). https://www.reuters.com/business/energy/libyaannounces-first-bidding-round-oil-exploration-17years-2025-03-03/?utm_source=chatgpt.com

“Eni, BP drilling for oil onshore Libya after 10-year hiatus,” S&P Global, October 28, 2024. (S&P Global) https://www.spglobal.com/commodity-insights/ en/news-research/latest-news/crude-oil/102824eni-bp-drilling-for-oil-onshore-libya-after-10-yearhiatus?utm_source=chatgpt.com

“Eni, TotalEnergies announce new exploration projects in Libya,” World Oil, January 19, 2025. (World Oil) https://www.worldoil.com/news/2025/1/19/enitotalenergies-announce-new-exploration-projectsin-libya/?utm_source=chatgpt.com

“Libya Paves Way for Power Sector, Clean Energy Transformation,” Energy Capital & Power, October 2024. (Energy Capital & Power) https://energycapitalpower.com/libyapaves-way-for-power-sector-clean-energytransformation/?utm_source=chatgpt.com

“Libya and Turkiye: Pioneering a renewable energy consortium for a sustainable future,” Middle East Monitor, January 29, 2025. (Middle East Monitor) https://www.middleeastmonitor.com/20250129libya-and-turkiye-pioneering-a-renewableenergy-consortium-for-a-sustainable-future/?utm_ source=chatgpt.com

“Libya’s Renewables Surge: 4GW by 2035, 500MW Solar Project,” PV Know How, February 2025. (PVKnowhow) https://www.pvknowhow.com/libyas-renewablessurge-4gw-by-2035-500mw-solar/?utm_ source=chatgpt.com

“5+1 Reasons Why Investing in Libya’s Oil and Gas Sector is a Smart Choice,” Energy Circle, 2025. (Energy Circle) https://www.energycircle.org/articles/5-1-reasonswhy-investing-in-libyas-oil-and-gas-sector-is-asmart-choice?utm_source=chatgpt.com

“Libya: Staff Concluding Statement of the 2024 Article IV Mission,” International Monetary Fund, May 10, 2024. (International Monetary Fund) https://www.imf.org/en/News/ Articles/2024/05/10/mcs051024-libya-staffconcluding-statement-2024-art-iv-mission?utm_ source=chatgpt.com

“Libya commits to renewable energies,” Atalayar, March 12, 2025. (Atalayar) https://www.atalayar.com/en/articulo/economyand-business/libya-commits-to-renewableenergies/20250312123702212156.html?utm_ source=chatgpt.com

“Libya’s state oil firm looks to boost output transparency, new chairman says,” Reuters, January 31, 2025. (Reuters) https://www.reuters.com/business/energy/ libyas-state-oil-firm-looks-boost-outputtransparency-new-chairman-says-2025-0131/?utm_source=chatgpt.com

The Importance of the Private Sector in Developing Libya’s Economy: Lessons Learned and Outlook

Libya stands at a pivotal juncture in its economic evolution. After years of political instability and overreliance on hydrocarbons, the country is recognising the indispensable role of the private sector in fostering sustainable growth, job creation, and economic diversification. This editorial examines the significance of private enterprise in Libya’s economic development, the lessons gleaned from past experiences, and the prospects that lie ahead.

A Historical Overreliance on Oil

For decades, Libya’s economy has been predominantly dependent on oil and gas, which constitute approximately 97% of exports and over 90% of fiscal revenues . This heavy reliance has rendered the economy vulnerable to fluctuations in global oil prices and has stifled the growth of other sectors. The dominance of state-owned enterprises, particularly in the energy sector, has further limited private sector participation and innovation.

The Emergence of the Private Sector

Recent assessments underscore the critical role the private sector can play in Libya’s economic recovery. A joint study by the United Nations Development Programme (UNDP) and the International Organization for Migration (IOM) highlights sectors such as agriculture, construction, automotive services, and care services as having significant potential for job creation . These sectors not only offer

employment opportunities for Libyans but also for migrants, contributing to social cohesion and economic inclusivity.

Moreover, the World Bank emphasises that prioritising non-oil sectors and encouraging private sectorled growth can unlock high-value job opportunities and enhance development indicators . This shift is essential for improving the lives of citizens and aligning with the global move towards cleaner energy.

Challenges Facing Private Enterprise

Despite the recognised potential, the private sector in Libya faces numerous challenges:

Access to Finance: The formal financial sector, primarily composed of state-owned banks, meets little of the financial needs of the private sector. Domestic credit to the private sector was reported at 10.13% of GDP in 2022, indicating limited financial support for private enterprises .

Regulatory Hurdles: Bureaucratic red tape and a lack of clear regulatory frameworks hinder business operations and deter investment. The absence of a unified state budget and fragmented governance structures exacerbate these issues.

Skill Gaps: There is a significant mismatch between the skills offered by the labour force and those demanded by the private sector. This gap necessitates targeted vocational training and education reforms to prepare the workforce for emerging industries .

Political Instability: Ongoing political divisions and security concerns create an unpredictable business environment, discouraging both domestic and foreign investment.

Lessons Learned

The experiences of the past decade offer valuable insights:

Diversification is Crucial: Overdependence on oil has proven unsustainable. Diversifying the economy by developing sectors like agriculture, tourism, and manufacturing is essential for resilience.

Empowering SMEs: Small and medium-sized enterprises (SMEs) are the backbone of the private sector. Supporting SMEs through access to finance, training, and simplified regulations can stimulate economic growth and employment

Public-Private Partnerships: Collaborations between the government and private entities can facilitate infrastructure development, service delivery, and innovation.

Institutional Reforms:

Strengthening institutions, enhancing transparency, and combating corruption are fundamental for building investor confidence and fostering a conducive business environment .

Outlook: Building a Resilient Private Sector

Looking ahead, several strategies can bolster the private sector’s role in Libya’s economy:

Policy Reforms: Implementing clear, consistent, and business-friendly policies will reduce uncertainties and attract investment.

Financial Sector Development: Encouraging the growth of private banking institutions and microfinance initiatives can improve access to capital for entrepreneurs and SMEs.

Education and Training: Aligning educational curricula with market needs and promoting vocational training will equip the workforce with relevant skills.

Infrastructure Investment: Developing infrastructure, such as transportation and digital networks, will enhance connectivity and support business operations.

Regional Integration: Leveraging Libya’s strategic location can facilitate trade and economic integration with neighbouring countries, expanding market access for Libyan businesses.

Libya - Economy

In conclusion, the private sector holds the key to unlocking Libya’s economic potential. By addressing existing challenges and implementing strategic reforms, Libya can pave the way for a diversified, inclusive, and resilient economy that benefits all its citizens.

References:

World Bank. (2024). Libya’s Economic Outlook: Pathways to Sustainable Growth and Increased Productivity. Retrieved from https://www.worldbank.org/en/news/ press-release/2024/12/17/libya-s-economicoutlook-pathways-to-sustainable-growthand-increased-productivity

UNDP. (2021). Libya’s Private Sector Main Driver For Economic Recovery. Retrieved from https://www.undp.org/arab-states/pressreleases/libyas-private-sector-main-drivereconomic-recovery

African Development Bank. (2024). Country Focus Report 2024 - Libya. Retrieved from https://www.afdb.org/sites/default/files/ documents/publications/cfr_2024-_libya_ anglais_final.pdf

OECD. (2016). SMEs in Libya’s Reconstruction: Preparing for a Post-Conflict Economy. Retrieved from https://www.oecd.org/content/dam/ oecd/en/publications/reports/2016/09/ smes-in-libya-s-reconstruction_ g1g6ecc8/9789264264205-en.pdf

IMF. (2023). Libya: 2023 Article IV ConsultationPress Release; Staff Report. Retrieved from https://www.imf.org/-/media/ Files/Publications/CR/2023/ English/1LBYEA2023001.ashx

UNDP. (2024). Unlocking Opportunities: Private Sector Engagement in Libya. Retrieved from https://www.undp.org/arab-states/pressreleases/unlocking-opportunities-privatesector-engagement-libya

Expertise France. (2023). Libya - Expertise France. Retrieved from https://www.expertisefrance.fr/en/libye

Libya Review. (2024). World Bank Praises Libya’s Economic Progress & Recovery Efforts. Retrieved from https://libyareview.com/49703/world-bankpraises-libyas-economic-progress-recoveryefforts/

World Bank. (2025). Libya Overview: Development news, research, data. Retrieved from https://www.worldbank.org/en/country/ libya/overview

IMF. (2023). After a Decade-Long Hiatus, IMF Surveillance Resumes in Libya. Retrieved from https://www.imf.org/en/News/ Articles/2023/06/12/cf-after-a-decade-longhiatus-imf-surveillance-resumes-in-libya

Investing in Libya: What the Law Now Offers

Libya, endowed with vast natural resources and strategically positioned at the nexus of Africa and Europe, presents a compelling proposition for investors. Despite enduring political upheavals, the nation has enacted legislative reforms aimed at fostering a conducive investment climate. Central to these reforms are Investment Law No. 5 of 1997 and Investment Law No. 9 of 2010, both designed to attract and protect foreign capital. Concurrently, strides have been made towards unifying the Central Bank and implementing foreign exchange (FX) reforms, signalling a commitment to economic stabilisation.

Investment Law No. 5 of 1997: Laying the Foundation

Enacted in the late 1990s, Investment Law No. 5 was Libya’s initial foray into formalising foreign investment protocols. Key provisions include:

Tax Incentives: Projects approved under this law benefit from a five-year corporate income tax holiday, with the possibility of a three-year extension contingent upon reinvestment of profits .(State.gov)

Customs Exemptions: Importation of machinery and equipment essential for project execution is exempt from customs duties and taxes .(ejraat.gov. ly)

Repatriation Rights: Investors are entitled to repatriate capital upon project completion, liquidation, or after a minimum of five years from the investment permit’s issuance .(ejraat. gov.ly)

Land Ownership: Foreign investors may own or lease land necessary for project operations, subject to regulatory approvals .(African Mining Legislation Atlas)

Stamp Duty Exemption: Projects are exempt from stamp duties on commercial documents .(mkelawyers. com)

Investment Law No. 9 of 2010: Modernising the Framework

Superseding its predecessor, Law No. 9 of 2010 offers a more comprehensive and investor-friendly legal structure:

Expanded Tax Exemptions: Beyond the five-year income tax holiday, the law exempts projects from taxes on machinery, equipment, and raw materials for five years. Additionally, profits from exports and reinvested earnings are tax-exempt during this period .

Full Foreign Ownership: Unlike the general commercial law, which limits foreign ownership to 49%, this law permits up to 100% foreign ownership in investment projects, barring specific sectors like oil and gas exploration .(Itkan Law)

Repatriation and Banking Rights: Investors can repatriate capital and profits, open bank accounts in foreign currencies, and obtain loans from both local and international financial institutions .(ejraat.gov.ly)

Employment Provisions: The law facilitates the employment of foreign personnel when local expertise is unavailable and grants expatriate employees the right to transfer their salaries abroad .(UNCTAD Investment Policy Hub)

Residency and Visa Benefits: Foreign investors and their employees are eligible for five-year renewable residency visas, along with multipleentry permits .(ejraat.gov.ly)

Progress on Central Bank Unification and FX Reform

The fragmentation of Libya’s Central Bank since 2014 has been a significant impediment to economic stability. However, recent developments indicate progress:(AP News)

Unification Efforts: In August 2023, the Central Bank announced its reunification after nearly a decade of division, a move facilitated by international mediation and the appointment of Deloitte to oversee the process .(AP News)

Leadership Changes: In September 2024, Libya’s eastern parliament appointed Naji Mohamed Issa Belqasem as the new central bank governor, aiming to consolidate financial governance .(AP News)

Currency Devaluation: In April 2025, the Central Bank devalued the Libyan dinar by 13.3%, setting the official exchange rate at 5.5677 LYD per U.S. dollar, in an effort to address economic imbalances and unify the exchange rate system .(Reuters)

Lessons Learned and Outlook

Libya’s journey towards economic revitalisation underscores the importance of legal clarity and institutional cohesion. The evolution from Law No. 5 to Law No. 9 reflects a commitment to creating a more attractive investment environment. Simultaneously, efforts to unify the Central Bank and reform the FX regime are critical steps towards restoring investor confidence.

However, challenges persist. Political instability, security concerns, and the need for further regulatory reforms remain pressing issues. For Libya to fully realise its economic potential, sustained commitment to legal and institutional reforms is essential.

References

“Libya - Law on Investment Promotion (2010)”, UNCTAD Investment Laws Navigator. (UNCTAD Investment Policy Hub) https://investmentpolicy.unctad.org/investmentlaws/laws/193/libya-law-on-investmentpromotion?utm_source=chatgpt.com

“LAW NO. 5 FOR THE YEAR 1426 (1997)”, Arab Middle East Lawyers Association. (African Mining Legislation Atlas) https://www.a-mla.org/en/country/pdf/795?utm_ source=chatgpt.com

“Libya - State.gov”, U.S. Department of State. (State.gov) https://2009-2017.state.gov/e/eb/rls/othr/ ics/2009/117843.htm?safe=1

“Libya devalues currency for first time in four years”, Reuters, April 6, 2025. (Reuters) https://www.reuters.com/markets/currencies/ libya-devalues-currency-first-time-four-years2025-04-06/?utm_source=chatgpt.com

“Libya’s central bank announces reunification after nearly a decade of division due to civil war”, AP News, August 21, 2023. (AP News) https://apnews.com/ article/54727f32df4cc754c50af59cb8187c91?utm_ source=chatgpt.com

“Libya’s parliament approves appointment of Belqasem as new central bank governor”, AP News, September 30, 2024. (AP News) https://apnews.com/ article/97dff23a0ccb85fa81ab0cd8a37ebabf?utm_ source=chatgpt.com

“The Provisions of Law No. 9 of 2010 on Promoting Investment”, Itkan. (Itkan Law) https://itkan.ly/the-provisions-of-law-no9-of-2010-on-promoting-investment/?utm_ source=chatgpt.com

“Libya - Corporate - Tax credits and incentives”, PwC Tax Summaries. (Worldwide Tax Summaries Online) https://taxsummaries.pwc.com/libya/corporate/taxcredits-and-incentives?utm_source=chatgpt.com

“Understanding Libya’s 2010 Investment Law”, FS Legals. (Home -) https://fslegals.com/understanding-libyas-2010investment-law/?utm_source=chatgpt.com

“Libya - Law on Investment Promotion | Investment Laws Navigator”, UNCTAD. (UNCTAD Investment Policy Hub) https://investmentpolicy.unctad.org/investmentlaws/laws/193/libya-law-on-investmentpromotion?utm_source=chatgpt.com

The Middle East’s AI Ascent: A Strategic Opportunity for Global Engagement

The Middle East is swiftly emerging as one of the most dynamic and ambitious regions in the global artificial intelligence (AI) ecosystem. Fuelled by transformative national agendas, bold public investments, and a strategic vision for economic diversification, countries across the region are competing to become global leaders in AI. For UK-based firms and international stakeholders, the Middle East represents not only a thriving tech hub but also a strategic gateway for innovation, partnership, and growth.

A Strategic Race for AI Dominance

The race for AI supremacy is no longer confined to traditional technology powerhouses. Middle Eastern nations, particularly those in the Gulf Cooperation Council (GCC), have taken decisive steps to integrate AI across sectors from governance and healthcare to finance and infrastructure.

Saudi Arabia, through its Vision 2030 reform plan, has declared AI a central pillar of its economic transformation. With plans to inject $40 billion into AI-focused projects, the Kingdom is developing a full-stack AI ecosystem that includes education, research, regulation, and infrastructure. This bold ambition is reflected in efforts to attract top global talent, build smart cities, and invest in cutting-edge AI capabilities.

Meanwhile, the United Arab Emirates continues to lead regional efforts through national strategies and government-backed funds with multibillion-dollar mandates for AI development. The UAE was the first country globally to appoint a Minister of State for Artificial Intelligence, demonstrating its long-

term commitment to embedding AI into the very fabric of governance and commerce.

Qatar, Bahrain, and Kuwait are not far behind. These nations have launched AI strategies and regulatory frameworks designed to ensure responsible innovation while also creating favourable conditions for foreign investment. The regional AI race is both a cooperative and competitive one, marked by a shared vision to move beyond oil-dependent economies toward knowledge-based, tech-driven futures.

Economic Potential and AI Market Growth

According to PwC, the Middle East is projected to gain approximately $320 billion from AI by 2030, representing around 2% of the total global AI impact. Saudi Arabia and the UAE alone account for over 70% of this value, with AI expected to contribute $135 billion and $96 billion respectively to their economies.

The Middle East and Africa (MEA) AI market is experiencing exponential

growth. Grand View Research anticipates AI-related revenues in the region to increase from $11.9 billion in 2023 to $166.3 billion by 2030, registering a CAGR of nearly 46%. This rapid expansion is being driven by government investment, private sector collaboration, and increasing AI adoption across key verticals such as finance, logistics, defence, and smart cities.

From predictive analytics in public transport systems to natural language processing in judicial reforms, AI is not just an economic enabler but a transformational force that is reshaping the region’s socio-economic landscape.

Infrastructure, Policy and Talent: Building the AI Foundation

To support this evolution, Middle Eastern countries are rapidly scaling digital infrastructure, developing advanced data centres, and securing sovereign data storage capabilities. High-speed broadband, 5G deployment, and national cloud strategies provide the technical backbone needed to power AI innovation.

Equally important is the regulatory landscape. Countries like the UAE and Saudi Arabia have implemented robust national AI strategies that include ethical frameworks and governance models aligned with global standards. These policies foster innovation while also addressing data protection, algorithmic transparency, and societal trust.

Talent development is also a top priority. Government-sponsored scholarships, public-private training initiatives, and collaborations with global academic institutions aim to nurture the next generation of data scientists, AI engineers, and tech entrepreneurs. This human capital investment ensures that the AI revolution is not only imported but domestically sustainable.

Why UK Companies Should Engage

For UK businesses, the Middle East offers a strategic frontier with lucrative returns. The region’s appetite for AI solutions opens up significant opportunities across various domains:

Financial Services: AI-powered risk management, fraud detection, and personalised banking solutions are in high demand as financial institutions across the region modernise their operations.

Healthcare: AI is revolutionising diagnostics, patient care, and healthcare logistics. UK firms specialising in medtech and health informatics are well positioned to form strategic partnerships.

Education and Skills Training: As AI adoption increases, so does the need for education. UK academic institutions and edtech companies can help fill this gap through partnerships and bespoke training programmes.

Legal and Regulatory Consulting: With many countries drafting or refining AI legislation, there is growing demand for expertise in ethical AI, privacy, and cross-border data governance.

Research and Innovation Hubs: UK-based think tanks and R&D firms can collaborate with regional counterparts on developing indigenous AI applications that address local challenges, from water scarcity to energy efficiency.

Financial

Institutions: A Key Player in AI

Enablement

As AI reshapes the future of economies, financial institutions stand at the heart of this transformation. In the Middle East, banks are not only adopting AI to enhance customer experiences and streamline operations; they are also emerging as key enablers of AI innovation. Whether through venture financing, AI incubators, or direct investment in startups, the financial sector is fuelling AI-driven entrepreneurship across the region.

This provides a prime opportunity for UK banks and fintech firms to export services, share best practices, and co-develop AI capabilities tailored to the Middle Eastern market. By establishing a presence or forging strategic alliances, financial institutions can gain early-mover advantage in one of the most rapidly evolving AI landscapes in the world.

Conclusion: Aligning with a Visionary Region

The Middle East is not merely adopting AI; it is actively defining what the future of AI could look like through innovation, regulation, and

Artificial Intelligence

investment. For UK companies and global investors, this presents an unparalleled opportunity to engage with forward-thinking governments and ambitious partners.

AI is set to be the defining technology of the 21st century. Those who act now to align with the Middle East’s AI ambitions will be best placed to reap the rewards of a region poised to lead.

References

PwC. (n.d.). The potential impact of Artificial Intelligence in the Middle East. Retrieved from https://www.pwc.com/m1/en/publications/ potential-impact-artificial-intelligence-middleeast.html

Grand View Research. (2024). Middle East & Africa Artificial Intelligence Market Outlook 2030. Retrieved from https://www.grandviewresearch.com/horizon/ outlook/artificial-intelligence-market/mea Time. (2024). Yasir Al-Rumayyan Profile. Retrieved from https://time.com/7012835/yasir-al-rumayyan-2/ Wikipedia. (2025). MGX Fund Management Limited. Retrieved from https://en.wikipedia.org/wiki/MGX_Fund_ Management_Limited

McKinsey & Company. (2024). Generative AI in the Middle East and GCC Countries. Retrieved from https://www.mckinsey.com/capabilities/ quantumblack/our-insights/the-state-of-gen-aiin-the-middle-easts-gcc-countries-a-2024-reportcard

arXiv. (2025). AI Governance in the GCC States: A Comparative Analysis of National AI Strategies. Retrieved from https://arxiv.org/abs/2505.02174

AI Business. (2024). How the Middle East is Becoming the Next AI Infrastructure Hub. Retrieved from https://aibusiness.com/data-centres/howthe-middle-east-is-becoming-the-next-aiinfrastructure-hub-of-emea

Head of International Trade

Deftly weaving real life stories of some of the most colourful figures from the time of World War II Paris with an ingenious art thriller plot that brings the narrative up to the high octane auction houses of today. In the Frame is a page-turning adventure that is at once historically fascinating and dramatically compelling. What were the links between Hermann Göring and Coco Chanel? What became of the Nazi’s hidden art plunders once they had been defeated? And what dark secrets must a new generation confront to get to the ingenious truth behind the iconic artworks we see in our galleries today? This passionate celebration of art history’s intrigues, conjured from fact and fiction, is an adventure to delight and entertain.

To secure a copy of the book, contact the author by email at:

Available from Nomad Publishing https://nomad-publishing.com/in-the-frame.html#

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Banking on the Middle East: Why Global Businesses Should Pay

Attention to a Sector in Transformation

The Middle East banking sector is undergoing an ambitious and rapid transformation. What was once seen as a conservative and oil-dependent financial environment is now a growing hub for innovation, digital banking, and sophisticated liquidity management. At the heart of this transformation is a clear regional ambition to modernise financial services and build a future-proof economic ecosystem.

For UK and international companies, this evolving landscape is not just worth watching—it’s worth engaging with. From the Gulf Cooperation Council (GCC) states to North Africa, opportunities are emerging for partnerships, investment, and market expansion.

A New Era of Banking in the Middle East

Across the Middle East, governments are actively pursuing strategies to diversify away from hydrocarbons and establish knowledge-based economies. Central to these plans is a reimagining of the role of banks. No longer passive financiers of government projects or basic retail services, today’s banks are technologydriven, consumer-focused, and regionally integrated.

In countries such as the UAE, Saudi Arabia, and Qatar, digital banking is not just a trend—it is fast becoming the standard. These nations are implementing real-time payment systems, AI-driven customer service, and

blockchain-backed security frameworks. They are also actively fostering fintech ecosystems, supported by regulatory sandboxes and government funding.

Meanwhile, countries such as Egypt are making impressive strides toward financial inclusion. With nearly threequarters of its adult population now connected to financial services, Egypt’s banking sector is evolving through digital innovation and policy reform, ensuring that economic benefits are shared across urban and rural populations alike.

Liquidity: A Key Pillar of Stability and Growth

Liquidity management has emerged as one of the most critical priorities for Middle Eastern banks. Recent global interest rate hikes, inflationary pressures, and tighter credit markets have placed liquidity strategies under the microscope.

In Saudi Arabia, for instance, the loansto-deposits ratio surged to 106% by the end of 2024—up from 93% in 2021. This

shift reflects increasing credit demand and the need for banks to optimise their balance sheets to remain resilient.

To meet these demands, banks are adopting advanced liquidity tools. The launch of seven-day cash concentration solutions, such as those now offered in the UAE, enables corporate clients to automate their liquidity planning even over weekends and public holidays. At the same time, central banks are reinforcing regulatory frameworks that require local financial institutions to maintain strong liquidity buffers and stresstesting mechanisms. Such innovations are creating an attractive, stable environment for foreign partners and investors. For British financial institutions and fintech providers, the demand for liquidity solutions opens the door to valuable collaborations in treasury management, payments, and regtech.

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Influence and Integration

No discussion of the Middle East’s financial future is complete without considering the influence of the region’s sovereign wealth funds (SWFs). Countries like Saudi Arabia, the UAE, Qatar, and Kuwait control some of the world’s largest and most active investment vehicles. Collectively, these Gulf sovereign funds manage trillions of dollars, with mandates that extend far beyond oil and gas.

Increasingly, SWFs are playing a critical role in shaping the banking sector’s direction. By investing in local and regional banks, these funds are helping to strengthen capital positions, expand global outreach, and encourage mergers and acquisitions that enhance competitiveness.

Furthermore, SWFs are facilitating cross-border cooperation by aligning banking investment with national visions. For example, where a sovereign fund invests in infrastructure or renewable energy projects, local banks are often mandated to cofinance or support these endeavours, creating synergies that drive national development plans.

Sovereign wealth funds also act as a magnet for foreign capital. Their

involvement in regional banking instils confidence among global investors, as these institutions are known for their long-term strategy, financial discipline, and political backing.

For UK-based firms, this represents an opportunity not only to co-invest alongside these entities but also to tap into well-capitalised markets where policy, regulation, and capital are aligned toward progress.

The Case for International Engagement

There are several compelling reasons why global businesses, particularly those from the UK, should be paying close attention to the Middle East’s banking renaissance:

A Digitally Engaged Market: The region boasts one of the highest rates of mobile and internet penetration in the world. This digital maturity offers a fertile ground for launching new banking products and fintech solutions.

Geopolitical Access: The Middle East acts as a strategic bridge between Europe, Asia, and Africa. Financial hubs like Dubai and Riyadh are positioning themselves as gateways to a broader investment and banking network.

Regulatory Reform: Financial authorities across the region are aligning more

closely with international standards. Reforms in areas such as data privacy, capital adequacy, and anti-money laundering offer a more transparent and secure operating environment.

Public-Private Partnership Opportunities: Governmentbacked initiatives are encouraging collaboration with private firms in sectors such as cybersecurity, digital identity, and financial literacy.

Unlocking Strategic Value

The integration of sovereign wealth fund capital, advanced liquidity management, and digital transformation is creating a resilient and forward-looking banking sector across the Middle East. These trends are not isolated—they are interconnected, supported by economic visions, and reinforced by regulatory action.

For businesses in the UK and around the world, this presents a unique moment. Early engagement with banks in the Middle East can lead to long-term partnerships, shared innovations, and access to growing markets.

Whether you’re a technology provider, investor, advisory firm,

or financial services provider, aligning with the banking evolution in this region is more than a growth strategy—it’s a future-proof move.

Final Thought: Time to Take a Seat at the Table

The Middle East is no longer content to sit on the financial sidelines. Its banks are modernising, its sovereign funds are deploying capital with strategic intent, and its regulators are opening the door to international collaboration. The invitation is clear—now is the time for global businesses to take a seat at the table and participate in shaping the financial future of one of the world’s most dynamic regions.

References

Arthur D. Little. Shaking up Middle Eastern banking.

https://www.adlittle.com/en/insights/ viewpoints/shaking-middle-eastern-banking

EY. MENA Banking Report 2024.

https://www.ey.com/en_ps/technical/ banking-capital-markets/mena-bankingreport/mena-2024-banking-report

Consultancy-me.com. AI in the Middle East’s banking sector: Four innovations and impacts. https://www.consultancy-me.com/ news/10570/ai-in-the-middle-easts-bankingsector-four-innovations-and-impacts

Fitch Ratings. Saudi Banks’ Upside from Lower Rates Limited by Liquidity Tightening. (17 March 2025)

https://www.fitchratings.com/research/ banks/saudi-banks-upside-fromlower-rates-limited-by-liquiditytightening-17-03-2025

HSBC. HSBC launches liquidity solution for Middle East corporates in step towards realtime treasury.

https://www.about.hsbc.ae/news-andmedia/hsbc-launches-liquidity-solution-formiddle-east-corporates-in-step-towardsreal-time-treasury

Central Bank of the UAE. Annual Report 2024. https://www.centralbank.ae/media/ ymgnwy3x/2024-en-annualreport.pdf Wikipedia. Economy of Egypt. https://en.wikipedia.org/wiki/Economy_of_ Egypt

Reuters. Lebanon passes banking secrecy law in third attempt to meet IMF demands. (24 April 2025)

https://www.reuters.com/world/ middle-east/lebanon-passes-bankingsecrecy-law-third-attempt-meet-imfdemands-2025-04-24/

Arabian Business. Powering MENA’s digital future: How UK fintech is driving transformation.

https://www.arabianbusiness.com/ resources/powering-menas-digital-futurehow-uk-fintech-is-driving-transformation

Finastra. Middle East & Africa: Embracing symbiosis to accelerate digital transformation. https://www.finastra.com/viewpoints/ articles/middle-east-africa-embracingsymbiosis-accelerate-digital-transformation

Arab News. UK businesses eyeing Middle East investments amid growing opportunities. https://www.arabnews.com/node/2593889/ business-economy

Evalueserve. Middle East Banks Witnessing Digital Revolution.

https://www.evalueserve.com/blog/middleeast-banks-witnessing-digital-revolution

McKinsey & Company. MENA fintech’s ascent: Growth, investment, and the path forward. https://www.mckinsey.com/industries/ financial-services/our-insights/bankingmatters/mena-fintechs-ascent-growthinvestment-and-the-path-forward

Sovereign Wealth Fund Institute. Ranking of Sovereign Wealth Funds by Assets Under Management.

https://www.swfinstitute.org/fund-rankings/ sovereign-wealth-fund

Brookings Institution. Gulf Sovereign Wealth Funds and the New Global Order.

https://www.brookings.edu/articles/gulfsovereign-wealth-funds-and-the-newglobal-order/

The New Gold Rush: Why the Middle East Is the World’s Next Mining Powerhouse

The Middle East is undergoing a transformative shift in its economic landscape, with the mining sector emerging as a pivotal force in the region’s diversification efforts. As countries like Saudi Arabia, the United Arab Emirates (UAE), and Egypt invest heavily in mining, the region is positioning itself as a global hub for critical minerals essential to modern technologies and the green energy transition.

A Strategic Pivot Towards Mining

Traditionally reliant on oil and gas, Middle Eastern nations are now harnessing their vast mineral wealth to foster economic resilience and sustainability. Saudi Arabia, for instance, has nearly doubled its estimated mineral resources to $2.5 trillion, underscoring the immense potential of its mining sector . The kingdom’s Vision 2030 initiative aims to elevate mining as a cornerstone of its economy, reducing dependence on hydrocarbons.

Egypt, too, is making significant strides. The government’s comprehensive reforms, including the launch of a

Digital Mining Platform in 2025, aim to attract foreign investment and streamline operations. These efforts have already borne fruit, with gold exports reaching $2.17 billion in the first nine months of 2024, nearly doubling from the previous year.

The Global Race for Critical Minerals

The global demand for critical minerals—such as lithium, copper, and rare earth elements—is intensifying, driven by the proliferation of electric vehicles, renewable energy technologies, and digital infrastructure. This surge has ignited a geopolitical race to secure

these resources, with the Middle East emerging as a key player.

Saudi Arabia’s recent agreements, including a partnership with MP Materials to develop a rare earth supply chain, highlight its commitment to becoming a central node in global mineral supply networks. Similarly, Qatar’s investment in TechMet, a company

focused on reducing China’s dominance in critical minerals, underscores the region’s strategic ambitions.

Opportunities for UK and Global Enterprises

The burgeoning mining sector in the Middle East presents a wealth of opportunities for UK and international companies. The UK’s expertise in mining services, technology, and sustainable practices positions it as a valuable partner in the region’s mining ventures.

Moreover, the UK’s recent agreement with Saudi Arabia to cooperate on critical minerals aims to strengthen supply chains and create business opportunities. This collaboration aligns with the UK’s broader strategy to secure essential resources for its

industries and support global economic growth.

A Call to Action for Financial Institutions

As the Middle East’s mining sector accelerates, financial institutions have a unique opportunity to play a pivotal role in its development. Banks can facilitate investment, provide financial services, and support infrastructure projects that underpin mining operations. By engaging with this dynamic sector, financial entities can contribute to sustainable economic growth and diversification in the region.

Conclusion

The Middle East’s strategic shift towards mining marks a significant evolution in its economic narrative. With abundant resources, supportive policies, and a commitment to innovation, the region is poised to become a global leader in critical minerals. For UK and global companies, this presents an unparalleled opportunity to engage with a sector that is not only lucrative but also central to the future of sustainable development.

References

Reuters. “MP Materials, Ma’aden to jointly develop rare earths supply chain in Saudi.” May 14, 2025.

https://www.news.com.au/finance/business/ mining/two-countries-come-for-australiasbillions-from-critical-minerals/news-story/7 47de77929f19dc9aa93775155e3aa86?

Arab News. “Saudi Arabia ramps up mining investment as sector outpaces global growth.” April 30, 2025.

https://www.arabnews.com/node/2598283/ business-economywth

Middle East Institute. “The Middle East’s critical mineral resources: A key to the clean energy transition.” March 2024. https://www.mei.edu/publications/middleeasts-critical-mineral-resources-key-cleanenergy-transition

Reuters. “UK to sign critical minerals partnership with Saudi Arabia.” January 14, 2025. https://www.reuters.com/markets/ commodities/uk-sign-critical-mineralspartnership-with-saudi-arabia-2025-01-14/

Financial Times. “Qatar invests in US-backed fund to loosen China dominance of critical minerals.” August 2024. https://www.reuters.com/markets/ commodities/mp-materials-maaden-jointlydevelop-rare-earths-supply-chain-saudi2025-05-14/?utm_source=chatgpt.com

Wikipedia. “Future Minerals Forum.” Accessed May 14, 2025. https://en.wikipedia.org/wiki/Future_ Minerals_Forum?

Wikipedia. “Economy of Egypt.” Accessed May 14, 2025. https://en.wikipedia.org/wiki/Economy_of_ Egypt?

Navigating the Middle Landscape in 2025

The Middle East continues to be a pivotal hub in global maritime trade, bridging Asia, Europe, and Africa. In 2025, the region’s shipping industry is undergoing significant transformations, influenced by infrastructural developments, geopolitical dynamics, and evolving trade corridors.

Strategic Port Developments

Grand Faw Port, Iraq Iraq’s Grand Faw Port is poised to become one of the largest ports in the Middle East. With the completion of its first phase, including five berths, the port aims to handle 3.5 million containers by 2028. This development is integral to the $17 billion Iraq Development Road project, designed to connect the Gulf to Europe via Turkey, offering an alternative to the Suez Canal.

Mubarak Al-Kabeer Port, Kuwait

Situated on Bubiyan Island, the Mubarak Al-Kabeer Port is a key component of Kuwait’s Vision 2035 and China’s Belt and Road Initiative. The project aims to enhance regional trade and transportation,

contributing to Kuwait’s economic diversification by reducing its reliance on oil. Fieldwork officially began in March 2024, with significant progress reported in 2025.

Geopolitical Challenges and Trade Routes

Red Sea Security Concerns

The Red Sea has witnessed a significant decline in maritime traffic due to attacks by Yemen’s Houthi rebels, targeting vessels linked to Israel. Despite a ceasefire agreement between the U.S. and the Houthis, major shipping companies remain cautious, with some rerouting vessels around the Cape of Good Hope, leading to increased transit times and costs.

Suez Canal Incentives

In response to reduced traffic, Egypt’s Suez Canal Authority has introduced a 15% discount on transit fees for large container ships. This measure aims to attract vessels back to the canal and mitigate the financial impact of decreased revenues, which dropped from $2.4 billion in Q4 2023 to $880.9 million in Q4 2024.

Alternative Land Corridors

The UAE–Israel land corridor, established in December 2023, offers a land-based trade route connecting ports in the UAE and Bahrain to Israel via Saudi Arabia and Jordan. This corridor reduces transit times from 14 days to just four, providing a viable alternative amidst Red Sea security concerns.

East Shipping

Environmental Regulations and Fuel Dynamics

Stricter emissions regulations in the Mediterranean Sea, effective May 2025, have designated the region as an Emission Control Area. This change mandates a reduction in sulfur content in marine fuels from 0.5% to 0.1%, influencing fuel sourcing and shipping operations. Consequently, there has been an uptick in the import of lowsulfur crude oils, such as Chad’s Doba crude, to European refineries.

Outlook

The Middle East’s shipping industry in 2025 is at a crossroads, balancing infrastructural advancements with geopolitical complexities. Strategic investments in port developments and alternative trade routes underscore the region’s commitment to maintaining its pivotal role in global trade. However, ongoing security challenges and regulatory changes necessitate adaptive strategies to ensure resilience and growth in the maritime sector.

References

Reuters. “Iraq shortlists 11 firms for Grand Faw port operation, decision in January 2025.” November 12, 2024. https://www.reuters.com/world/middle-east/ iraq-shortlists-11-firms-grand-faw-portoperation-decision-january-2025-202411-12/#:~:text=The%20shortlisted%20 companies%20include%20China,and%20United%20Arab%20Emirates%2Dbased

The B1M. “The $17BN Plan to Make Iraq a Logistics Superpower.” March 2025. https://www.theb1m.com/video/iraq-al-faw-port Kuwait Times. “One year after revival, field work is underway at Mubarak Port.” May 4, 2025. https://kuwaittimes.com/article/27274/ kuwait/other-news/one-year-after-revivalfield-work-is-underway-at-mubarakport/#:~:text=Fieldwork%20officially%20 began%20in%20March,class%20logistics%20 and%20trade%20hub.

WUAB. “Mubarak Al-Kabeer Port – The Wider Impact on Growth and Sustainability in Arab Countries.” April 2025. https://wuab.org/category/magazine/

Reuters. “Egypt’s Suez Canal offers a 15% discount for big container ships to win back trade.” May 13, 2025. https://www.reuters.com/world/africa/egyptssuez-canal-offers-15-rebate-container-ships130000-tons-or-more-2025-05-13/

The New Arab. “Will the UAE-Israel land corridor replace Red Sea routes?” February 2024. https://www.newarab.com/analysis/will-uaeisrael-land-corridor-replace-red-sea-routes Bureau Veritas. “Sulphur emission control area (SECA) in Mediterranean Sea in 2025.” April 2025.

https://marine-offshore.bureauveritas.com/ newsroom/sulphur-emission-control-areaseca-mediterranean-sea-2025

Reuters. “New Mediterranean fuel rule helps bring more Doba crude to Europe.” May 8, 2025. https://www.reuters.com/sustainability/ climate-energy/new-mediterranean-fuel-rulehelps-bring-more-doba-crude-europe-202505-08/#:~:text=In%20May%2C%20the%20 International%20Maritime,Europe%20of%20 Doba%20crude%20soared.

The Wall Street Journal. “Shippers Are Skeptical of Trump’s Truce With the Houthis.” May 8, 2025. https://www.wsj.com/world/middle-east/ trump-houthis-truce-shipping-industrya3b01ecf

Seatrade Maritime News. “Red Sea threat to shipping remains despite US and Houthi ceasefire.” May 8, 2025.

https://www.seatrade-maritime.com/security/ red-sea-threat-to-shipping-remains-despiteus-and-houthi-ceasefire

The Future of Sustainable Urban Development in the Middle East

How

developers are reshaping regional cities through innovation, green design, and global partnerships

The Middle East stands at a defining moment in its urban evolution. With populations growing, natural resources under pressure, and economies diversifying beyond hydrocarbons, the way cities are planned and built has never been more important. Across the region, a new model of urban development is emerging—one that places sustainability, innovation, and liveability at its core.

Driven by national transformation strategies such as Saudi Vision 2030, the UAE’s Net Zero 2050 initiative, and Egypt Vision 2030, governments are reimagining how urban centres can serve not only as engines of economic growth, but also as sustainable habitats that support inclusive communities. In this rapidly shifting landscape, real estate developers are playing a pivotal role—not just as builders, but as architects of a greener, smarter future.

A Shift from Expansion to Integration

Urban expansion has long been a feature of development in the Arab world. But where past projects focused heavily on scale, the new wave of development is prioritising integration: blending residential, commercial, educational, and cultural functions into well-planned, environmentally conscious spaces.

This new approach is exemplified by The Line, a groundbreaking project in Saudi Arabia’s NEOM megacity. Stretching 170 kilometres across the desert and designed to house nine million residents in a zero-carbon, carfree environment, The Line is a radical departure from conventional urban sprawl. Its vertically layered design aims to preserve 95% of surrounding nature while integrating all daily needs within a five-minute walk.

Innovation as the New Urban Currency

At the heart of the region’s urban agenda is a commitment to innovation. Smart city technologies, renewable energy systems, AI-powered infrastructure, and advanced waste and water management are now standard features in many new developments.

The Line is a flagship for this vision. Entirely powered by renewable energy, the city will feature a highspeed transport spine, digital twin city planning, and smart public services integrated into its fabric. The project is redefining what it means for a city to be not only smart, but predictive, adaptive, and regenerative—anticipating resident needs through real-time data.

This transformation echoes a broader regional shift: the evolution of real estate from a traditional asset class into a launchpad for economic diversification, talent retention, and knowledge-based growth.

Sustainability in Practice

Sustainability is no longer a buzzword in Middle Eastern real estate—it’s a requirement. Developers are under increasing pressure to meet green building standards, reduce carbon emissions, and ensure long-term environmental resilience.

The Line’s car-free design alone reduces the need for paved roads and cuts emissions from private transport dramatically. Buildings are planned for passive climate control, energy efficiency, and reduced water usage. Vertical farms and innovative waste recycling systems will support local food and resource cycles.

These priorities reflect the region’s growing commitment to frameworks such as the UN Sustainable

Development Goals (SDGs), alongside national standards like the Saudi Green Initiative and Estidama in the UAE.

Collaboration as a Catalyst

None of this transformation is happening in isolation. The scale and complexity of modern urban projects demand robust public-private partnerships and extensive international collaboration.

NEOM, the parent initiative of The Line, has engaged a wide network of global partners—including tech giants, academic institutions, and engineering firms—to bring its ambitious vision to life. These partnerships not only bring world-class expertise to Saudi Arabia but also build confidence among foreign investors watching the region’s transformation.

As a project that sits at the intersection of sustainability, innovation, and investment, The Line is setting a new benchmark for integrated collaboration between governments, private capital, and knowledge economies.

Urban Developments

An Opening for International Investors

As the Middle East redefines the future of its cities, it is also opening its doors wider to international investment. For global investors seeking exposure to resilient, high-growth sectors, sustainable urban development presents a unique opportunity.

Infrastructure, clean energy, education, transport, and digital services are all integral to the success of projects like The Line. Investors who align with the long-term vision of NEOM are positioning themselves at the forefront of one of the most dynamic and forward-thinking urban transformations globally.

This is more than a real estate story— it’s a story about the future of how we live, work, and connect in a rapidly changing world.

Conclusion

Sustainable urban development in the Middle East is no longer an ideal—it’s a regional imperative. As governments chart ambitious futures for their nations, it is forward-thinking projects like The Line at NEOM that are bringing those visions to life. Through a combination of innovation, sustainability, and partnership, these projects are creating cities built not just for today, but for generations to come. For investors, collaborators, and policymakers alike, the message is clear: the future of the Middle East is being built now—and it’s sustainable by design.

References

The Line (NEOM) –https://www.neom.com/en-us/ regions/theline

Saudi Vision 2030 –https://www.vision2030.gov.sa

UAE Net Zero by 2050 Strategic Initiative –https://www.moccae.gov.ae

UN Sustainable Development Goals –https://sdgs.un.org/goals

World Green Building Council –https://www.worldgbc.org

ABCC Translation Services

For all your translations from English to Arabic or Arabic to English.

With over 40 years’ experience in technical translation, the Arab-British Chamber of Commerce specialises in Arabic/English and English/Arabic translation and has excellent facilities and top quality translators.

Our translators are officially qualified and trained to handle customer requirements accurately and professionally in both languages. Our experience lies in first class commercial, financial, legal and technical translation of the highest standard.

The Chamber’s translation service is officially recognised by all the Arab embassies in London and by the Foreign, Commonwealth & Development Office (FCDO).

However, we strongly advise clients that the FCDO should authenticate all official documentation translated from Arabic to English if it is to be used in the UK. Translation of official documents from English to Arabic, for use in the Arab world, must be authenticated by both the FCO and the Arab embassy of the country where the document is to be used.

The ABCC translation service covers all types of documents, including:

Birth/marriage/baptism/divorce/death certificates

Certificates of academic qualification

Certificates of Origin

Commercial invoices

Company/personal financial documents

Divorce documents from the Shar’i Mazun or from a court of law

Memorandum & Articles of Association

Passport details.

Exploring Middle Eastern Free Zones: A Smart Move for UK Businesses

As global trade shifts and businesses look for new, efficient ways to grow, the Middle East has become an increasingly attractive destination — and not just for oil and energy. At the heart of its economic transformation are free zones: specialised business hubs offering a host of advantages to international companies.

For UK firms of all sizes — from ambitious start-ups to established exporters — tapping into the region’s free zones could be one of the smartest decisions for expanding globally. These zones make doing business abroad simpler, faster, and more cost-effective. But what exactly are they, and why are so many companies choosing to operate from them?

What Are Free Zones?

Free zones (also known as free trade zones or special economic zones) are designated areas within a country where the usual rules around taxes, customs, and ownership are relaxed to encourage foreign investment. In these zones, businesses benefit from tailored regulations designed to reduce red tape and increase profitability.

Most free zones are strategically located near ports, airports, or industrial centres. Some cater to specific sectors such as logistics, manufacturing, media, or technology, making it easier for businesses to find the right environment for their needs.

Why the Middle East?

When it comes to free zones, few regions do it better than the Middle East. With decades of experience and some of the world’s most businessfriendly regulations, countries across the region have developed robust infrastructures to support international companies.

One of the biggest draws is location. Sitting at the crossroads of Europe, Asia, and Africa, the Middle East gives UK businesses access to a massive population base — over 2 billion people within a few hours’ flight. Whether you’re shipping goods, providing services, or seeking new markets, this region offers exceptional reach and connectivity.

Top Benefits for UK Businesses

Here’s why more and more British companies are looking to the Middle East’s free zones for their next step.

Full Foreign Ownership

One of the biggest advantages is the ability to own your business outright. In many parts of the Middle East, businesses outside of free zones need

to partner with a local shareholder. Free zones remove that requirement, letting UK investors keep full control of their operations.

Generous Tax Incentives

Tax breaks are another major plus. Most zones offer long-term exemptions from corporate tax, income tax, and import/ export duties. These savings can make a huge difference — especially for small businesses working to stay competitive in global markets.

Easy Repatriation of Profits

Businesses are usually allowed to send profits, capital, and dividends

back to the UK without restrictions. That kind of financial freedom makes international expansion far less complicated.

Simple

Setup Process

Setting up in a free zone is often much quicker and more straightforward than in the wider market. Many zones offer one-stop-shop services, with all the paperwork and approvals handled in a central location. You can often go from application to operation in a matter of days.

Modern Infrastructure

Free zones come well-equipped with the facilities businesses need to grow — from high-tech warehouses and manufacturing units to office spaces and logistics services. There’s also reliable access to utilities, highspeed internet, and a pool of skilled talent.

Where Are the Major Free Zones?

While nearly every country in the Middle East has embraced the free zone model, some have gone a step further to turn it into a national strategy.

United Arab Emirates (UAE)

With more than 40 free zones across its seven emirates, the UAE leads the region. These zones support industries from trade and logistics to media, healthcare, and finance. The country’s open economy, global airports, and strong legal systems make it a top choice for UK investors.

Saudi Arabia

Saudi Arabia is investing heavily in economic diversification. As part of its Vision 2030 plan, the kingdom has launched several new economic cities and free zones designed to attract international talent and innovation.

Oman

Oman’s zones, particularly in Sohar and Duqm, are well-positioned on the Indian Ocean and cater to industries like shipping, energy, and manufacturing. The country is known for its stable regulatory environment and strategic trade routes.

Jordan

Jordan’s free zones focus on services, technology, and export-oriented manufacturing. For businesses targeting markets in the Levant or the Gulf, it offers a practical, cost-effective base of operations.

Bahrain and Yemen

While smaller, Bahrain provides a flexible and transparent regulatory setup with a focus on logistics and light industry. Yemen’s Aden Free Zone, meanwhile, retains strategic maritime importance despite ongoing challenges.

Why Now? Why the Middle East?

With global trade becoming more competitive, UK businesses need every advantage they can get. Free zones offer a way to reduce risk, lower costs, and access new customers without getting bogged down in bureaucracy.

For businesses looking to test new markets or set up a regional base, free zones are the ideal entry point. They offer stability, support, and scalability — all in markets that are actively looking to attract international partnerships.

And it’s not just about goods and trade. With the Middle East investing in innovation, digital transformation, and sustainability, there are growing opportunities in emerging sectors too — from fintech and AI to green energy and smart logistics.

Final Thoughts

Free zones are no longer a niche concept — they are a powerful economic tool, and the Middle East has refined the model to a high standard. For UK businesses, they offer a smooth and supported way to go global.

Whether you’re launching a new venture, expanding an existing business, or simply exploring your international options, now is the time to look east. The free zones of the Middle East aren’t just open for business — they’re ready to help you thrive.

References

Ministry of Economy – UAE. “Free Zones.” https://www.moec.gov.ae/en/free-zones

MEED. “GCC Free Zones: A Catalyst for Economic Diversification.” https://www.meed.com/gcc-free-zones

Jordan Free and Development Zones Group. http://www.jfdz.jo

Oman Public Authority for Special Economic Zones and Free Zones. https://opaz.gov.om

Economic Cities and Special Zones Authority (Saudi Arabia). https://ecza.gov.sa

World Bank Group. “Ease of Doing Business in the Middle East.”

https://www.worldbank.org/en/news/pressrelease/2019/10/24/doing-business-2020-fourarab-countries-among-worlds-top-10-businessclimate-improvers

IRAQ

Country Name: Republic of Iraq

Capital: Baghdad

Total area: 438,317 sq km

Border countries: Iran, Jordan, Kuwait, Saudi Arabia, Turkey and Syria

Coastline: 58km

Population: 47 million (2025)

GDP: $ 250.84 billion (World Bank, 2023)

Currency: Iraqi Dinar (IQD)

Natural resources: petroleum, natural gas, minerals, phosphates, sulphur, gypsum

Agricultural produce: wheat, dates, tomatoes, maize, watermelons, grapes, potatoes, milk, cucumbers and aubergine

Industries: petroleum, chemicals, textiles, leather, construction materials, food processing, fertilizers, metals fabrication and processing

Exports: crude and refined petroleum, gold, petroleum coke and natural gas

Imports: refined petroleum, broadcasting equipment, motor cars, jewellery and garments.

The population of Iraq is concentrated in the northern, central, and eastern regions of the country, with many of the larger urban centres located along the Tigris and Euphrates Rivers. Large parts of the western and southern regions are sparsely populated.

The Republic of Iraq is a federal parliamentary republic divided into 18 governorates. Under the Iraqi constitution, the president is the head of state while the prime minister heads the government. The Cabinet consist of a council of ministers proposed by the prime minister. The Central Bank of Iraq answers to the council of ministers.

Iraq has been ranked as the fourth largest economy in the Arab world in 2025. The country’s status is growing as a regional and international hub for trade and investment.

Opportunities for exporters, suppliers and investors exist across a wide range of sectors from energy, agriculture, construction, infrastructure, logistics, financial services, education and training, among others.

The National Investment Commission (NIC) has conveniently listed ten key reasons why investors should look to Iraq today:

• Iraq’s strategic location which makes it a gateway to the Middle East region.

• The availability of green and brownfield opportunities across multiple sectors.

• Opportunities to supply the unmet needs of its diverse domestic market.

• A rising middle class which creates demand for new products and services.

• Iraq’s highly educated, talented and available human resources.

• Competitive business operating costs, including salaries.

• Strong investment incentives, tax exemptions and legal guarantees.

• Low corporate tax rates.

• Opportunity for local partnerships.

• Abundant and untapped natural resources.

The NIC announced as recently as May 2025 that Iraq had attracted more than $64 billion in foreign investment over the past two years, underscoring the growing global confidence in the country’s economic trajectory. NIC Chairman Haider Makiya told Iraqi News Agency on 21 May that the majority of the investment capital stemmed from major international companies operating inside Iraq. The country’s Prime Minister had previously said that foreign investment exceeded $60-63 billion.

The figures are seen as clear evidence of sustained investor interest in doing business in Iraq and as indication of a shift toward long-term economic engagement, Iraqi officials believe.

In recent years, Iraq has witnessed a significant surge in trade. In the first half of 2024, Iraq’s trade volume with 11 regional countries reached $65 billion, a 10% year-on-year increase. Bilateral trade has seen substantial growth with

countries like Saudi Arabia (reaching $1.3 billion in 2024) and Jordan (exceeding $1 billion). UAE exports to Iraq hit $22 billion in 2024.

In May this year, the IMF reported on the resilience of the country’s economy, citing in particular agriculture, manufacturing and construction.

“Following a very strong growth of 13.8 percent in 2023, Iraq’s non-oil GDP is expected to have considerably moderated to 2.5 percent in 2024, driven by a slowdown in public investment and in the services sector, as well as a weaker trade balance. The agriculture, manufacturing, and construction sectors remained resilient, benefiting from postdrought recovery, expanded refining capacity, and strong growth in credit to households,” the IMF observed.

Economic diversification

Iraq is making efforts to diversify its economy. Expanding non-oil investment, especially in trade and transportation infrastructure should help economic diversification, the IMF states. Substantial investments are also required to modernise the electricity sector and develop natural gas resources, both of which are essential for improving energy security and reducing dependence on gas imports. The IMF has also urged Iraq to adopt measures to improve procurement and public financial management.

Iraq seeks to reduce its oil dependency, strengthening commercial ties globally, and enhancing regional integration with Arab states. Baghdad hosted an Arab Economic and Social Development Summit, on 17 May 2025. In a statement to that summit, Iraq’s Prime Minister, Mohammed AlSudani, stressed his country’s support for the creation of an integrated Arab investment environment over the next decade, driven by the liberalising of trade, and establishing free trade zones.

Iraq has reaffirmed its openness to productive partnerships in investment as it seeks new partnerships to develop infrastructure including road and railway networks, renewable energy, and industrial and agricultural integration through to joint industrial cities.

Lessening oil dependency

According to a World Bank report, Iraq’s oil revenues accounted for more than 99 percent of its exports in 2022, 85 percent of the budget, and 42 percent of GDP over the past decade. Oil and gas are projected to continue to see more foreign participation attracted by major untapped resources and oil and gas fields which need investment to be fully developed.

Iraq is actively seeking investment in various sectors and regions in order to achieve growth. Apart from oil and gas, other areas where Iraq is seeking investment include public infrastructure, electricity, water, housing, transport and communications.

According to the Minister of Foreign Affairs, Fuad Hussein, speaking on 19 May 2025, Iraq was currently in receipt of an estimated $87 billion in foreign investment. The Minister reportedly remarked that the increase in foreign investment demonstrated a growing international confidence in the country’s economy.

Investment needed by the electricity and water sector was estimated at around 20.2 trillion dinars over five years, in a 2024 investors’ guide, while the estimated investment required for construction amounted to about 12.2 trillion dinars in the same guide, to cover the years of the latest plan.

Investment Zones

Iraq is creating various investment zones, designed to attract foreign investors, as outlined in the country’s

National Investment Commission reports that are updated annually. The country’s investment zones include:

• Basra Investment Zone/Grant Faw port Zone, occupying a 2,400 hectare site, for petrochemicals, power station and oil refinery. Babylon Investment Zone/ Hitteen Zone, set up for heavy and medium engineering industries.

• Baghdad Investment Zone, located near to the International Airport, is set up for various economic sectors, housing, entertainment, services, education, fairs among others.

• Mid Euphrates Investment Zone, located between Najaf and Karbala, which is set up for agricultural industries such as dairy, fruit canning, vegetables, meat and food industries.

• Nineveh Investment Zone, designed for engineering industries, equipment and integrated engineering systems for medium and small projects.

• Diyala Investment Zone, for multipurpose activities related to tourism.

• Anbar Investment Zone, for construction materials and glass factories.

Development Road Project

Iraq has initiated a major $17 billion Development Road project, to fulfil its aim to become a key regional transport hub. The project, linking Al-Faw Grand Port on the Gulf to Türkiye and onward to Europe, offers vast opportunities for improving trade and investment in Iraq and across the region, including industrial and investment cities along its route and integration with global transport and energy networks. >>>

Iraq Country Profile

The completion of the first section of the Development Road was announced on 18 May 2025 by the General Company for Ports of Iraq (GCPI). The road project is being built with three lanes designated for heavy trucks and cargo, according to officials.

“The first section of the road stretches from Grand Al-Faw Port to the submerged tunnel, covering 51 kilometres (km), and then continues from the tunnel to the main Safwan road for an additional 11km, bringing the total length of this segment to 62 km,” the company Director Farhan Al-Fartousi said, quoted by various Iraqi news outlets.

The project includes two major bridges—one of 805 metres and the other 300 metres in length. The development road will be equipped with a solarpowered lighting systems implemented by South Korea’s Samsung, with the aim of providing sustainable energy and advanced technology.

Grand Al-Faw Port

The Grand Al-Faw Port is a strategic megaproject located on Al-Faw Peninsula in Basra province, that aims to transform the country into a regional trade hub by connecting it to global transport networks. The port project is estimated to cost around $4.6 billion and spans 54km2. It is expected to have a capacity of 99 million tonnes annually, positioning it among the largest ports in the Gulf and the tenth largest globally.

Agriculture

Iraq’s fertile arable lands yield an abundance of crops, sustaining communities as they have done for many centuries and contributing to regional trade. Despite recent challenges including climate change, farming remains a vital economic activity, providing livelihoods for millions of citizens and ensuring the nation’s food security.

Investment opportunities in Iraq’s agricultural sector exist in supporting initiatives to modernise the country’s irrigation systems, improvements in processing of fresh food produce, the introduction of more renewable energy sources such as solar to farming and smart farming methods that make use of technology to monitor soil quality, weather conditions and growth of crops.

The country is home to the Tigris and Euphrates Rivers, which historically have acted as the lifeblood of its agriculture and economic activities. However, the country faces significant challenges in maintaining sufficient water supplies, due to water scarcity, pollution, changes to the climate and inefficient water resource management. The adoption of efficient new agricultural technologies and conservation measures relating to irrigation methods offer potential solutions.

With over 22 million hectares of agricultural land, of which an estimated only 5 million are actively utilised, agriculture holds substantial untapped potential.

Central Iraq is a critical agricultural hub, contributing to the country’s production of wheat, rice, and vegetables. The region benefits from proximity to urban centres like Baghdad, which provide ready markets for the region’s produce. Southern Iraq is the heart of date and rice production. Basra accounts for over 65% of Iraq’s date exports, making it a cornerstone of the agricultural export strategy.

The Anbar region in western Iraq is focused on barley and livestock production, with ongoing efforts to introduce desert farming techniques.

Farming remains a traditional small scale family based activity. To adapt to changes in climate, UNDP has provided training to enable farmers to adopt more sustainable agriculture practices. Farmers are learning about crop diversification, crop rotation, soil management, water conservation, drought-resistant techniques, value chain analysis, and business management, boosting Iraq’s farm productivity and securing sustainability.

Construction

Activity in Iraq’s construction market is pivotal to driving growth. Much needs to be done to make progress on national reconstruction and essential infrastructure development. A building boom has been driven by public infrastructure initiatives, urbanisation, and essential reconstruction work. The construction sector offers diverse opportunities with projects at different stages of completion. These range from residential and commercial complexes to transportation infrastructure and energy facilities.

Iraq is modernising transportation networks, utilities, and public services with mega-projects such as road expansion, airport renovations, and water treatment facilities all driving demand for construction services and stimulating economic activity around the country.

Rapid urban development and growth in the population are fuelling demand for residential and commercial real estate in major cities from Baghdad to Basra in the south and Erbil in the north. Mixed-use developments, highrise buildings, and high end residential communities are emerging to meet diverse housing needs. This activity opens up opportunities for construction firms, suppliers and property developers.

Healthcare

The Ministry of Health is the primary healthcare provider in Iraq making the public health system the main provider of care though private sector providers have expanded their activities over the last decade. There is no formal private healthcare insurance system across the country.

In past decades Iraq’s health system was recognised as one of the best in the region for primary care. Most of the country’s healthcare infrastructure has now been rehabilitated, and the availability of services has improved greatly, but services remain unevenly distributed around the country. The health system consists of both private and public sector facilities.

Iraq today still faces a national shortage of healthcare professionals, including doctors and nurses, a situation created by past disruptions which compelled many medical professionals to leave the country, a UK Home Office report said, August 2024.

Access to healthcare can be difficult in rural areas where villages are often scattered and remote. In many areas there is an absence of local health services and patients need to travel long distances for treatment in health centres shared with many villages.

Private sector expansion in Iraq has been most evident in niche areas such as cosmetic medicine and laboratory diagnostics.

Banking sector

Global credit ratings agency, Fitch Ratings stated in February 2025 that the Iraqi banking sector would be made stronger as a result of the implementation of regulatory reforms. The reforms, introduced by the Central Bank of Iraq, should make the sector more transparent and better able to support economic growth, Fitch said. These reforms related to the minimum issued and paid-up capital requirements and the need to establish correspondent banking relationships for foreign-currency trading.

Established as the country’s independent central bank by law in 2004, the Central Bank of Iraq manages domestic monetary policy and supervises the financial system. Headquartered in Baghdad, the CBI has four branches in Basrah, Mosul, Sulaimaniyah, and Erbil.

Iraq is moving ahead with the digital transformation of its banking and financial sectors. According to the CBI up to 70 applications were under review in 2024 for licenses to allow banks to operate digital services in the country. The CBI is committed to advancing digital banking and overseas regulatory standards that

apply to the industry. Iraq sees international cooperation can make a vital contribution towards developing local banking.

Iraqi Finance Minister, Mrs Taif Sami Mohammed, along with the CBI Governor, Dr Ali Al-Alaq, met with leading officials from the World Bank and the International Monetary Fund (IMF) during the annual spring meetings in Washington, 20-23 April 2025.

Their extensive talks looked into the World Bank’s role in supporting Iraq’s reform programmes, particularly issues of revenue maximisation, expenditure control, digitisation, electronic systems, infrastructure and energy projects. The Iraq Finance Minister met with Mrs Haila Sheikh Rouhou, Regional Vice President, International Finance Corporation (IFC), to discuss investment barriers in Iraq and key projects under the IFC’s supervision in the transport, energy, and international trade finance sectors.

A high-level meeting was held with Mr Othman Dawani, Vice President of the World Bank for the Middle East, to review the Bank’s funded projects in Iraq, in particular rail projects. Issues of renewable energy, waste management and airports were all discussed.

The IMF’s provision of technical support for Iraq’s tax and customs authorities was also on the agenda, and in particular matters of automation. Further discussions included support for Iraq’s pension and social security systems. During the talks, the Iraqi delegation also met with Mr Jihad Azour, Director, IMF’s Middle East and Central Asia Department, who reiterated the IMF’s commitment to supporting Iraq’s financial, banking and monetary reforms.

Investing in Iraq

Further information about the Iraqi economy can be obtained from the country’s National Investment Commission, on whose website can be found a legal guide to investing in Iraq and an annual Investment Map of Iraq. The latter brings together details of the latest projects in different sectors and regions of the country. The data is regularly updated.

https://investpromo.gov.iq/

Trade between UK and Iraq

UK and Iraq See Growth in Trade

The UK and Iraq are presently witnessing a growth in bilateral trade and investment as their relations deepen and diversify. The latest available data on total trade in goods and services (exports plus imports) between the UK and Iraq was £1.1 billion in the four quarters to the end of Q4 2024, an increase of 3.9% or £43 million in current prices from the four quarters to the end of Q4 2023.

Of the £1.1 billion:

• Total UK exports to Iraq amounted to £898 million in the four quarters to the end of Q4 2024 (an increase of 7.8% or £65 million in current prices, compared to the same period in 2023);

• Total UK imports from Iraq amounted to £247 million in the four quarters to the end of Q4 2024 (a decrease of 8.2% or £22 million in current prices, compared to 2023).

Iraq was the UK’s 85th largest trading partner in the four quarters to the end of Q4 2024 accounting for 0.1% of total UK trade.

Of all UK exports to Iraq in the four quarters to the end of Q4 2024, £563 million (62.7%) were goods and £335 million (37.3%) were services. In the four quarters to the end of Q4 2024, UK exports of goods to Iraq increased by 15.1% or £74 million in current prices, compared to the four quarters to the end of Q4 2023 while UK exports of services to Iraq decreased by 2.6% or £9 million in current prices, compared to 2023.

In the four quarters to the end of Q4 2024, total UK imports from Iraq were £247 million (a decrease of 8.2% or £22 million in current prices, compared to 2023).

Of all UK imports from Iraq in the period, £7 million (2.8%) were goods and £240 million (97.2%) were services. In the same period, UK imports of goods from Iraq increased by 40.0% or £2 million in current prices, compared to 2023 while UK imports of services from Iraq decreased by 9.1% or £24 million in current prices, compared to 2023.

This means the UK reported a total trade surplus of £651 million with Iraq, compared to a trade surplus of £564 million in the four quarters to the end of Q4 2023. In the four quarters to the end of Q4 2024, the UK had a trade in goods surplus of £556 million with Iraq, compared to a trade in goods surplus of £484 million in 2023.

Meanwhile, in the four quarters to the end of Q4 2024 the UK reported a trade in services surplus of £95 million with Iraq, compared to a trade in services surplus of £80 million in 2023.

Source: The figures outlined above are based on Office for National Statistics data and released by the Department for Business & Trade in its fact sheet dated 2 May 2025.

Working towards an increase in bilateral trade

Iraq and the UK envisage a significant increase in bilateral trade in coming years.

In January 2025, UK and Iraq signed a landmark Partnership & Cooperation Agreement (PCA), a wide-ranging treaty on trade and strategic cooperation and agreed a trade package worth up to £12.3 billion, underpinned by a series of export agreements, to bolster the growing trading relationship between the UK and Iraq. This £12.3 billion package represents over 10 times last year’s total UK-Iraq bilateral trade.

This deal was the outcome of an official visit to the United Kingdom by the Iraqi Prime Minister Mohammed Shia alSudani who met Sir Keir Starmer in 10 Downing Street.

The deal included a £1.2-billion project in which British-made power transmission systems will be used for a grid interconnection project between Iraq and Saudi Arabia, as well as a £500-million plan to upgrade the Al-Qayyarah air base in northern Iraq.

A water infrastructure project by a UK-led consortium that will help provide clean water in arid southern and western Iraq is also part of the deal, the statement said. The project would be worth up to £5.3 billion in UK exports.

The two countries agreed to utilise UK private sector expertise on critical water, energy, telecoms and defence infrastructure, and to secure future investment projects in the clean energy, pharmaceutical, logistics, and financial services sectors.

This will be supported through a UK Export Finance (UKEF) Memorandum of Cooperation to boost private sector investment and financing in Iraq, signed by the UK Foreign Secretary and Iraqi Foreign Minister.

The Prime Ministers welcomed the recently announced agreement between Iraq and BP for a long-term investment in the country.

They also signed a defence deal that “establishes the basis for a new era in security cooperation”.

The two leaders reaffirmed their commitment to the vision of a prosperous, sovereign Iraq through a new partnership focused on trade and investment.

The visit by the Iraqi PM reaffirmed the “UK and Iraq’s commitment to work together on shared regional and global interests and underlines a shared commitment to the long-term strategic relationship”, their joint statement said.

Details of the following UK-led projects in Iraq have been released:

• De-mining: UK Companies have been appointed to remove legacy mines across all of Iraq: a contract worth £330mn.

• Rehabilitation and reconstruction of Al-Qayyarah airbase: UK private sector expertise will deliver the £500mn rehabilitation of Iraq’s Al Qayyarah airbase providing Iraq with air defence coverage and capability for North & West of Iraq.

• Comprehensive Water Project: a UK-led consortium will lead a significant water infrastructure project worth up to £5.3bn in UK exports. This will improve water quality, irrigate agricultural land, and provide clean water in the South and West of Iraq, improving living conditions for millions of Iraqis.

• Basra Water Project: a UK company has been appointed to build large-scale infrastructure for desalination and water processing plants, providing clean water for the 3 million Iraqis in the Basra province. This project is worth up to £3.3bn in UK exports.

• Iraq-Saudi Grid interconnection: UK made power transmission systems will interconnect the Iraq and Saudi grids, a project worth at least £1.2bn.

• Enhancement of the Iraqi National Grid: GE Vernova will supply and install £82mn worth of power substations to improve Iraq’s electricity grid.

• 5G rollout: Vodafone has been appointed to design the new 5G network planned by the government.

• Iraqi Railway project: A UK company will deliver a £82mn construction project to build a new railway in Iraq.

• Hilla Phase 2: a UK company has been appointed to deliver sewage and water processing solutions serving 3 million Iraqis, worth £260mn in exports.

• Baghdad Sanitation Project: a UK company has been appointed to provide up to £655mn worth of water management, and sewage treatment solutions for the Mayoralty of Baghdad.

• Provision of UK Firefighting vehicles: 62 British-made fire-fighting vehicles will be exported to Iraq, in a UKEFfacilitated £27.5mn export.

Trade between UK and Iraq

• Provision of radio communications equipment: UK firms will export £98mn worth of communications technology to provide the Iraqi emergency services with equipment to tackle emergencies and incidents more efficiently across Iraq.

• Border technology: UK companies will provide £66.5mn worth of border security equipment to the Iraqi Ministry of Interior, to make Iraq’s crossings, checkpoints, and airports safer.

During the visit, the two countries also reached a Memorandum of Cooperation on Climate Change, the Environment, Energy Transition and the Carbon Economy. This will deepen cooperation on a broad range of climate and environment issues. In particular, it recognises a partnership to enhance cooperation to deliver Iraq’s commitment to end flaring.

The official statement said that the UK PM strongly welcomed Iraq’s investment in international scholarships with the Iraqi PM announcing a significant scholarship scheme that will enable over 2000 Iraqi students to study in the UK. They noted the potential for high-quality teaching, learning and research collaboration between UK and Iraqi universities and academics with a number of highlevel agreements being signed with UK universities.

Furthermore, the UK and Iraq also pledge to work together on areas such as culture, English language learning and sporting activities, including sports science and medicine.

Source: Joint UK-Iraq Statement, PM’s Office.

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Iraq’s Macroeconomic Outlook 2025: Between Fiscal

Strain and

Diversification Opportunities

Iraq enters 2025 at a pivotal juncture, contending with the legacies of decades-long conflict, oil dependency, and institutional fragility—yet showing glimmers of renewal. The country’s macroeconomic outlook is shaped by converging pressures: global oil market volatility, domestic political uncertainty, fiscal overreach, and a stuttering reform agenda. Yet within this high-risk environment, there are signals of emerging resilience.

This article provides a comprehensive analysis of Iraq’s current macroeconomic outlook, drawing on the latest assessments from the World Bank, IMF, and regional research. It delves into the dynamics of growth, public finance, and monetary policy, while exploring the constraints imposed by

governance, political instability, and security risks. It dissects the key drivers of Iraq’s macroeconomic trends, assesses structural vulnerabilities, and identifies opportunities for diversification and reform. Most importantly, the article places special emphasis on the prospects of Iraq’s most promising non-oil sectors:

from sustainable agriculture and mineral development to logistics, construction, and renewable energy. These sectors, if properly developed, could not only cushion the country from commodity volatility but also anchor Iraq’s long-term diversification and inclusive growth.

Iraq

Macroeconomic Performance and Forecasts

Real GDP growth in Iraq is projected to reach only 1.3% by the end of 2025, according to the World Bank, following contractions of -1.5% and -2.9% in 2024 and 2023, respectively. This tepid rebound reflects constrained oil output under OPEC+ quotas and weaker fiscal stimulus. Fitch Solutions (BMI) confirms this trend, highlighting the indirect impact of global trade friction and falling oil prices, particularly the drag created by U.S. tariffs on global demand. The IMF indicates that Iraq is showing continuous contraction of -1.5% as of April 2025.

Iraq’s economy remains deeply skewed: oil accounted for 58% of GDP and 95% of exports in 2023. Oil production is expected to decline by 1.4% in 2025 under OPEC+ obligations, offsetting any rebound in prices. The outlook remains clouded by geopolitical risks and production uncertainties in key fields.

Non-oil growth presents a mixed picture. The latest IMF visit in May 2025 estimated that growth in the non-oil economy has slowed to about 1%, citing tighter credit conditions and fiscal bottlenecks. Yet, the government expects non-oil GDP to grow by 4%, especially on the back of agricultural expansion and public spending. It is important to note the efforts to revitalize farming, transport, and services—supported by favorable seasonal conditions and new irrigation programs. Realistically, Iraq’s non-oil growth likely falls within a 1–4% range, depending on how efficiently budgeted capital expenditures are executed and how private sector constraints are addressed.

Looking ahead, the World Bank forecasts Iraq’s GDP growth will accelerate to 5.3% in 2026. This is contingent on the full return of northern oil exports via the CeyhanKirkuk pipeline, increased foreign direct investment, and effective budget implementation. However, delays in post-election fiscal consolidation or a renewed oil shock could easily derail this trajectory.

Public Finances and Fiscal Pressures

Iraq’s fiscal policy is caught in a procyclical trap: windfalls during high oil years are quickly absorbed by an expanding wage bill, while revenue shocks expose the state’s rigidities. In 2025, projections indicate a fiscal deficit of

14.3% of GDP—more than doubling from 2024’s 6.7%—as spending commitments from the three-year budget coincide with lower oil receipts.

Over 80% of Iraq’s expenditure is recurrent, dominated by salaries, pensions, and food subsidies. Capital investment, crucial for diversifying growth, remains under-executed. The 2023–2025 budget tripled public sector hiring and welfare outlays, with limited space for development projects. The Ministry of Planning has already flagged that no new investments will be initiated in 2025—a red flag for economic dynamism.

With oil revenues expected to decline by 13.2% in 2025, Iraq’s public debt is rising. The debt-to-GDP ratio is expected to exceed 65% by 2027, driven by domestic borrowing and off-budget financing. While IMF recommendations urge fiscal consolidation and targeting of social transfers, political constraints ahead of the 2025 elections make meaningful adjustment unlikely until 2026.

External Position and Monetary Stability

Iraq’s current account is expected to swing into a 4.4% deficit in 2025, down from a 4.0% surplus in 2024, reflecting lower oil export receipts and sustained demand for imports. Iraq is spending a large amount of money on imports, especially for food, fuel, and capital equipment. Without increased non-oil exports or stronger remittances, the trade imbalance is widening.

Iraq still has more than $90 billion in foreign currency reserves—enough to cover nearly a full year of imports. This gives the country some protection if oil prices fall or other economic shocks occur. But these reserves are being used up more quickly, and the IMF has warned that if Iraq doesn’t get its spending under control, this financial safety net could shrink significantly within two years.

The exchange rate peg of 1,300 IQD/ USD is under strain. While the Central Bank maintains the official rate, a parallel market premium persists due to capital flight, import restrictions, and limited interbank liquidity. Analysts increasingly expect a controlled devaluation post-2025 elections, especially if fiscal consolidation fails to materialize.

Iraq’s inflation has moderated, falling to 2.5% in 2024. This has been driven

by declining global energy and food prices, normalization of trade finance, and tighter monetary policy alongside modest currency stability. However, the IMF cautions that inflation could return later in 2025 if pressures mount on the dinar or if energy subsidies are reduced.

Monetary policy remains constrained by Iraq’s exchange rate regime. With few effective instruments available, the Central Bank relies heavily on administrative controls and reserve injections. Developing more robust monetary transmission mechanisms— through banking reform, deeper bond markets, and improved data—is a medium-term priority.

Governance Challenges and Structural Risk Environment

Iraq’s economic development remains hindered by deep-rooted governance issues and structural fragilities. Weak institutions, opaque regulatory processes, and politicized public administration have eroded public trust and investor confidence. Despite multiple reform announcements, implementation has been hampered by coordination failures between federal and regional governments, particularly Baghdad and Erbil.

Social development is critical to Iraq’s future competitiveness. The national poverty rate has declined to 17.5% in 2024 from 30% in 2022, and access to electricity and health services has improved marginally. However, youth unemployment is estimated above 27%, and labor force participation remains below 40%, with vast gender gaps. The education system lacks alignment with labor market needs. Vocational training programs are fragmented, and higher education suffers from outdated curricula. The World Bank notes that boosting female labor participation and equipping youth with digital skills could add up to 8 percentage points to Iraq’s long-term growth potential.

Security remains an unpredictable variable in Iraq’s risk profile. Although armed conflict has subsided, sporadic violence, militia activity, and unresolved tensions in disputed territories undermine long-term planning and capital investment. Political fragmentation— especially in the run-up to the 2025 elections—further complicates budget execution and consensus building.

External volatility adds to the fragility. The news reports warn that a drop in

global oil prices below $50/barrel could trigger a full-blown fiscal and social crisis, highlighting Iraq’s vulnerability in the absence of sufficient non-oil buffers. Stabilizing governance, enhancing institutional accountability, and shielding the economy from political cycles will be essential to ensure resilience and reform continuity.

Iraq’s Most Promising Sectors

Despite structural weaknesses, several sectors hold promise for Iraq’s long-term diversification:

Construction and Housing: Iraq’s construction sector is expanding due to population growth, urbanization, and post-conflict reconstruction needs. Government-backed housing schemes— especially low- and middle-income housing—and the National Investment Commission’s portfolio of public infrastructure projects have sustained demand. The sector also benefits from job intensity, making it a priority for

employment generation. Challenges include poor procurement practices, inconsistent financing, and delays in land allocation. If addressed, these bottlenecks could unleash a construction-driven multiplier effect.

Logistics and Trade Facilitation: Iraq’s central location offers potential to become a trade corridor linking the Gulf to Turkey, Iran, and the Levant. Projects such as the Faw Grand Port, the Development Road corridor, and customs digitization are intended to reduce transport costs and increase trade volume. The completion of a multimodal dry port near Baghdad could connect road, rail, and port networks, stimulating industrial zone development. However, logistics infrastructure remains fragmented, and bureaucratic obstacles continue to delay execution. Creating a one-stop-shop for trade and logistics services could accelerate sectoral transformation.

Telecommunications and Digital Economy: Iraq’s digital ecosystem is expanding, driven by high mobile penetration and a young, tech-savvy population. The launch of 4G and preparation for 5G rollout has improved network capacity. E-commerce, ridehailing, and delivery services are growing in major cities, albeit mostly in the informal sector. The Central Bank’s push for digital payments, e-KYC, and mobile banking has the potential to improve financial inclusion. Still, digital skills gaps, weak cybersecurity, and poor ICT governance remain serious constraints. A national digital transformation strategy, tied to education and entrepreneurship, could unlock exponential growth.

More on Iraq’s Agriculture and Strategic Potential

Agriculture in Iraq has long served as a vital livelihood for millions, even as its formal contribution to GDP hovers around 5-6%. As of 2024, nearly one in four Iraqis depends directly on farming, making it a critical sector for economic inclusion and rural stability. However, climate change, water scarcity, and infrastructure limitations are putting immense pressure on agricultural productivity—while also revealing the sector’s untapped potential for climate adaptation, job creation, and economic diversification.

Agriculture remains Iraq’s most immediate and scalable non-oil growth engine. Following a 6% expansion in 2024, growth is expected to continue in 2025, driven by improvements in irrigation infrastructure, seed distribution systems, and local fertilizer production. The government’s wheat self-sufficiency drive, along with palm date revitalization programs, has helped stabilize rural incomes and reduce food import

dependency. Further mechanization and adoption of climate-smart technologies, especially in water-stressed areas, will be critical. Additionally, agribusiness and food processing industries are beginning to emerge, offering downstream valuechain opportunities.

Iraq is considered one of the world’s most climate-vulnerable countries, with increasing desertification, extreme heat, and prolonged drought cycles. Farmers across Basra, Nineveh, and Diyala have reported reduced crop yields, shorter planting windows, and growing pressure on irrigation systems. According to the FAO and national reports, vast tracts of once-arable land have been degraded due to poor soil management, overuse, and declining groundwater tables.

In response, Iraq has been investing in resilience-building programs. The Green Climate Fund (GCF) and FAO launched the $39 million SRVALI project, aimed at strengthening climate-resilient agriculture in southern Iraq. The program targets vulnerable farmers—especially women— through improved water infrastructure, solar-powered irrigation systems, better land-use planning, and the creation of local water user associations. Similarly, UNDP-led programs are helping farmers adopt drought-resistant seeds, apply efficient irrigation techniques, and restore degraded soil through crop rotation and composting.

Value chain development is also gaining traction. A joint FAO and UN study on key agricultural value chains—dates, grapes, tomatoes, and wheat—revealed significant potential for growth. Iraq is among

the top date producers globally, yet poor storage, packaging, and export logistics continue to limit global competitiveness. Investments in cold storage facilities, logistics centers, and agro-processing hubs would allow Iraq to expand value-added production and reduce post-harvest losses.

Recent developments underscore both promise and pitfalls. In 2024, Iraq reported a surplus of 1.5 million tons of wheat—thanks in part to favorable weather and increased procurement. However, this success came at a cost: the government paid local farmers almost double the international market price, straining the national budget and drawing on precious water resources. This highlights the need for better policy balance—supporting productivity without distorting market signals.

Looking forward, the integration of climate-smart practices, improved infrastructure, and better market access could unlock agriculture’s full potential. Women and youth remain at the center of these efforts. Programs funded by GCF and IFAD emphasize gender-responsive planning, rural training, and financial inclusion—critical steps for long-term resilience and inclusive growth. If supported with consistent policy, rural finance mechanisms, and infrastructure upgrades, agriculture could evolve from a climate-vulnerable sector into a resilient pillar of Iraq’s green and inclusive recovery. If scaled effectively, the sector also holds potential to contribute meaningfully to Iraq’s non-oil GDP, reduce its reliance on food imports, and generate rural employment—helping to balance the country’s heavily oil-dependent economy.

A Deeper Look at Iraq’s Mineral Resources and Economic Diversification Potential

Iraq, long defined by its oil wealth, is now turning attention toward the untapped potential of its mineral resources as part of a broader economic diversification agenda. With over 16 trillion USD in estimated natural resource value, Iraq possesses a range of metallic and non-metallic minerals with strong commercial potential. These include sulfur, phosphate, gypsum, silica, bentonite, kaolin, and notable occurrences of polymetallic minerals such as zinc, lead, copper, gold, and rare earth elements.

Mining is increasingly seen as a strategic pillar in Iraq’s efforts to diversify beyond oil. With vast geological assets, increasing investor interest, and ongoing legal reform, Iraq has the ingredients to grow a globally competitive mining sector. Integrating mining into national industrial policy—while safeguarding environmental and community concerns—will be key to unlocking inclusive and sustainable resource-led growth. >>>

Strategic Mineral Zones and Resource Mapping

The Kurdistan Region and several provinces in southern and western Iraq are particularly rich in mineral deposits. The Ministry of Natural Resources has highlighted key mining blocks for investment, with geological surveys confirming the presence of economically viable reserves. According to official Ministry data, over 25 mining blocks across Dohuk, Erbil, and Sulaymaniyah are ready for licensing. The western desert near Anbar and Nineveh also shows promise in phosphate and silica reserves.

Data from the Iraq Geological Survey and recent studies indicate concentrated mineralization belts with copper, zinc, and lead in the northern mountain ranges and central plateau. These areas present opportunities for integrated extraction and downstream beneficiation, particularly in cable production, battery metals, and cement inputs.

Private Sector Engagement and International Interest

Driven by investor interest and government reform, Iraq’s mining sector is gradually opening up to foreign participation. In 2023, Iraq launched a roadmap to promote public-private partnerships in mining, offering incentives such as reduced royalties, repatriation of profits, and longterm land access. Companies from Jordan, Turkey, and the UAE have shown growing interest in Iraq’s phosphate and bentonite reserves, especially as global demand rises for agricultural inputs and construction materials.

Furthermore, the government has begun revising its mining code to align with international standards, aiming to derisk exploration and attract long-term investment. Licensing transparency, environmental regulation, and ESG compliance are now being emphasized in both federal and regional contracts.

Value Chain Potential and Linkages to Industry

Mineral development holds major forward linkages to Iraqi industry. For instance, the exploitation of native gypsum and limestone can support a more competitive cement industry, while phosphate and potash can enhance domestic fertilizer production, reducing reliance on costly imports. Silica and kaolin reserves have potential applications in glass, ceramics, and electronics manufacturing.

Iraq also stands to benefit from global trends in green energy technologies that rely on rare earth elements and battery minerals. With proper investment, Iraq could become a regional supplier of select critical minerals. However, to realize this potential, the country will need to build geological data infrastructure, offer stable regulatory frameworks, and invest in skilled labor development for the extractives sector.

A Deeper Look at Iraq’s Sustainable Energy Transition

As Iraq navigates the dual challenges of post-conflict reconstruction and global energy transition, the push toward

sustainable energy solutions has taken on increasing urgency. Long dependent on oil for fiscal revenues and electricity generation, Iraq now confronts an electricity deficit exacerbated by rising population demand, outdated infrastructure, and the vulnerability of oil-based systems to climate shocks. In response, both government agencies and international partners are intensifying efforts to expand the renewable energy portfolio—primarily in solar, wind, and biomass—as part of Iraq’s long-term sustainable development and climate commitments under the Paris Agreement.

Solar Energy Potential and Initiatives

Iraq is geographically well-positioned to harness solar power, receiving more than 3,000 hours of sunshine annually across most regions. Baghdad alone reports solar irradiance of 833 W/ m2 during peak months, placing Iraq among the top solar-rich countries. Studies show consistent solar energy distribution from north to south, with southern Iraq achieving radiation levels up to 27 MJ/m2 in peak summer.

Despite this abundance, solar energy remains underutilized. Early solar PV initiatives were hindered by low-efficiency technologies and the country’s dusty climate. However, recent innovations in panel cooling systems and dust-resistant coatings are reviving momentum. Off-grid solar PV systems are being piloted in remote and underserved areas, while solar thermal water heating is expanding

in public buildings. With international support—notably from GIZ and UNEP— Iraq is gradually incorporating solar infrastructure into national energy strategies.

Wind Energy: Tapping a Seasonal Resource

Iraq’s wind energy capacity is another promising but underdeveloped resource. The country can be divided into three wind zones: about 8% of Iraqi territory experiences wind speeds above 5 m/s, particularly in areas like Al-Naseria and Al-Kout, with energy densities reaching 378 W/m2. Summer months show higher wind speeds, aligning well with Iraq’s seasonal peak in energy demand due to cooling needs.

Recent studies suggest that both onshore and offshore wind (particularly in the Gulf near Basra) can play a more strategic role in Iraq’s energy mix. However, large-scale deployment remains limited by regulatory uncertainty, grid integration constraints, and the absence of bankable investment frameworks. Investment in meteorological mapping and feasibility studies is necessary to unlock private sector participation.

Biomass and Bioenergy: An Untapped Rural Asset

Biomass energy—from agricultural residues, waste oils, and organic municipal waste—offers Iraq a path to both waste management and rural energy access. Crops like sugarcane

and date palm, particularly in the delta region of southern Iraq, can be converted into bioethanol. Animal fats, used cooking oil, and palm kernel waste can support biodiesel production.

Although global production of vegetable oils and biodiesel is rising, Iraq’s domestic biofuel industry remains nascent. Institutional barriers include limited agricultural credit, weak value chains, and aging irrigation infrastructure. Nonetheless, with proper investment and policy support, biomass could complement other renewables, especially in off-grid agricultural regions.

Policy, Investment, and Future Outlook

The Iraqi Ministry of Environment and Ministry of Electricity have begun aligning national frameworks with the country’s Intended Nationally Determined Contributions (INDCs) under the Paris Agreement. Iraq’s green energy ambitions include achieving 30% renewables in the electricity mix by 2030. With support from GIZ, UNDP, and UNEP, Iraq has initiated capacitybuilding programs, drafted regulatory incentives, and explored public-private partnership models for scaling up renewables.

Yet, significant challenges remain. These include bureaucratic delays, limited technical expertise, and a lack of coordination between governorates and central agencies. To address these, a more coherent policy package is needed—including feed-in tariffs, renewable energy auctions, and

improved access to concessional climate finance.

Conclusion and Outlook

Iraq’s macroeconomic landscape in 2025 reflects a fragile equilibrium: short-term stabilization achieved at the cost of growing fiscal imbalances and deferred structural reforms. While oil remains the backbone of the economy, its volatility—and eventual depletion— underscore the urgent need for a diversified development model. The continued erosion of public finances, coupled with underperforming non-oil sectors, reveals the limits of the status quo.

Yet Iraq’s path forward is not predetermined. The country possesses considerable human and natural capital—fertile land, abundant solar energy, promising mineral reserves, and a youthful population increasingly engaged in digital enterprise. Unlocking this potential will require a more disciplined fiscal policy, deeper investment in productive sectors, and a governance model that fosters transparency and coordination across all levels of government.

In a year marked by both economic headwinds and emerging sectoral promise, the real question is not whether Iraq can grow, but whether it can grow differently—anchored in sustainability, inclusion, and resilience. The decisions made in the coming 12–24 months will determine whether Iraq merely recovers or begins to truly transform.

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