Aproposal to dissolve the Iraqi Ministry of Electricity: Annual spending of $8 billion remains unaddressed.
Iraqi economic expert, Munar Al-Obaidi, revealed on Monday that the annual spending on the electricity sector in the country has exceeded 10 trillion dinars, in light of the absence of radical solutions to address the chronic imbalance in this issue. He proposed dissolving the Federal Ministry of Electricity and that local governments in the governorates should manage the issue by contracting for generation in exchange for collection.
Al-Obaidi said in a statement received by Shafaq News Agency, “Data issued by the Ministry of Finance for 2024 indicate that total direct spending on the electricity sector, including operating and investment expenses, amounted to approximately 10.45 trillion Iraqi dinars, equivalent to approximately 8 billion US dollars.”
He explained that “the distribution of these expenditures was as follows: electricity costs 3.39 trillion dinars, expenses for purchasing imported fuel to operate the stations 3.3 trillion dinars, expenses for the Ministry of Electricity’s investment budget 1.2 trillion dinars, other expenditures such as compensation, grants and salaries 2.3 trillion dinars, in addition to expenses for importing energy from abroad, which amounted to 238 billion dinars.”
Al-Abidi explained that “these figures represent direct expenditures only, and indirect expenditures related to the electricity sector, such as government subsidies and the costs of technical and commercial losses in the network, are added to them.”
He pointed out that “there are no accurate figures available to illustrate the annual volume of electricity sector collections, making it difficult to measure the financial gap between what is actually spent and what is collected from citizens.” He emphasized that “this gap represents annual losses borne by the state without any real solution.”
He stressed that “the electricity issue has become one of Iraq’s most complex challenges, and patchwork solutions are no longer viable,” emphasizing that “the radical solution lies in transferring the powers of electricity production, distribution, and collection from the central government to local governments.”
Al-Obaidi suggested that “provinces should contract to establish local electricity generation units based on diverse energy sources, in addition to directly managing collection operations, which would enhance efficiency and reduce waste and corruption.” He added that “the central government’s role could be limited to drafting general legislation and regulating the market, allowing governorates to operate flexibly according to their needs and creating a local market for exchanging electricity between governorates with abundant supplies and those suffering from scarce supplies.”
He pointed out that “over more than twenty years, Iraq has spent approximately $200 billion on electricity without achieving commensurate results due to centralized decision-making, weak management, and widespread corruption.” He explained that “abolishing the Ministry of Electricity entirely and transforming its departments and units into provincial directorates may be the only path to real reform.”
Al-Obaidi warned that “if this bold course is not taken, Iraq will continue to drain huge resources without achieving sustainable electricity security.”
Shafaq.com