The rebuilding efforts post-conflict, combined with the country’s strategic location and diverse economy, makes Iraq a compelling destination for foreign investment. As a result of its huge oil and gas wealth, Iraq has one of the largest projects markets in the region, with some GBP 355 billion worth of schemes either planned or under way.
The United Kingdom recognizes Iraq’s potential and has actively engaged in trade and investment partnerships. Total trade in goods and services (exports plus imports) between the UK and Iraq was GBP 1.3 billion in the four quarters to the end of Q1 2023, an increase of 83.4% or GBP 611 million in current prices from the four quarters to the end of Q1 2022.
The UK’s success can be attributed to several factors including government support, where the UK government provides support and resources to British businesses and exporters looking to invest in Iraq. UK companies bring their expertise in various sectors, aligning with Iraq’s needs. This has led to successful collaborations in energy, infrastructure, and technology.
Other sectors offering opportunities and growth that UK SMEs can explore further include,
- Energy Sector
As one of the world’s largest oil producers, Iraq’s energy sector has been a cornerstone of its economy. For instance, Kurdistan (autonomous area northern part of Iraq) exports some 400,000 barrels of oil a day, equating to 10 percent of the overall Iraqi exports and 0.5 percent of global production.
With substantial reserves, the country remains a crucial player in the global oil market. However, Iraq is also looking to diversify its energy portfolio, presenting significant opportunities for renewable energy project (solar & wind farms) and infrastructure development.
- Infrastructure Development
After years of conflict, there’s a pressing need for infrastructure development across various sectors including roads, bridges, airports, and utilities. In Q2 2023, Iraq unveiled plans for the GBP 13.5 billion Development Road project that will link Asia to Europe and enhance regional co-operation and economic opportunities. This offers profitable prospects for UK SMEs specializing in construction, engineering and project management.
- Telecommunications and Technology
Iraq’s young population (56.5 % of the working age) and increasing digital connectivity create a growing demand for telecommunications and technology services. For instance, E-commerce, digital payments, and IT solutions are areas poised for expansion that UK tech focus SMEs and solutions providers could tap into in this market.
- Agriculture and Food Processing
Iraq has fertile lands and a long agricultural history. With the agriculture sector employing approx. 20 percent of the country’s workforce and is the second largest contributor to the country’s gross domestic product (GDP) after the oil sector. There is a need to revitalise the agricultural sector, thus presenting ample amount of opportunities for UK business and exporters in areas of modernizing farming techniques, food processing, and distribution.
- Consumer Goods and Retail
Iraq’s retail industry has continued to expand and develop during the post-pandemic era. The growing middle-class in Iraq is fuelling demand for consumer goods and retail services. This sector offers opportunities for both UK consumer goods manufacturers and retail chains looking to explore new market.
The UK’s successful engagement in Iraq serves as a testament to the potential this market holds. A deep understanding of Iraqi culture, business practices, and local needs has contributed to the UK’s success in forging long-lasting partnerships. It is worthwhile remembering that certain market barriers and security challenges (in different parts) remain, in which UK exporters still need to overcome in doing business in Iraq. As Iraq continues to rebuild and modernize its economy, British businesses and exporters that seize the moment stand to benefit from the nation’s transformation while contributing to its growth and development.
For more information on doing business in Iraq, please contact: