The Kurdistan Regional Government said on Monday that it is facing serious unfairness in the loan arrangements with the federal government, revealing that the region pays far more than it receives. According to the government, for every one dollar the Kurdistan Region gets in loans from Baghdad, it ends up paying back 26 dollars.
In a statement shared with dinaropinions.com, the regional government said financial data from Iraq’s federal budgets over the past twenty years, from 2005 to 2025, clearly shows a systematic problem that reduces the Kurdistan Region’s rightful share. It said the federal government expanded what it calls “sovereign expenditures” in an unprecedented way and used an “actual spending” system that turned the region’s constitutional rights into numbers that exist only on paper.
The government explained that in 2005, sovereign spending was limited to a few areas, such as the presidencies and the Ministries of Foreign Affairs and Defense. But in the 2023–2025 budgets, this category expanded massively, reaching about 47.4 trillion dinars every year.
According to the statement, many new items were added under the label of sovereign expenditures, including oil production costs, the budget of the Popular Mobilization Forces, and loan-related expenses. The Kurdistan Regional Government said this expansion effectively drains the region’s share before it even reaches Erbil, forcing the region to carry an annual burden of about 8.7 trillion dinars to cover these costs.
The government said the injustice is especially clear when it comes to internal and external loans. While the Kurdistan Region is required to pay around 1.6 trillion dinars each year as its share of repaying Iraq’s sovereign loans, it receives only about 62.4 billion dinars from those same loans. In simple terms, the region is paying for loans that were spent elsewhere in Iraq while getting almost nothing in return.
The statement also criticized Baghdad’s use of the “actual spending” mechanism instead of approved budget allocations. According to the regional government, this approach links the Kurdistan Region’s budget and public sector salaries to how well projects are moving forward in central and southern Iraq. It described this as a form of collective financial punishment.
The government stressed that under Article 121, Paragraph Three of the Iraqi Constitution, the region’s budget share should be based on population and actual needs, not on how much ministries in Baghdad spend. It warned that these policies automatically reduce the Kurdistan Region’s share every time a project stalls in another Iraqi city, further deepening the financial pressure on the region.
