Economic growth is a critical component to promoting long-term prosperity for all Iraqis. However, political instability, insufficient infrastructure, and lack of financial and institutional support has made it difficult for small and medium-sized enterprises (SMEs) in Iraq to thrive. Working hand in hand with the Government of Iraq (GOI), economic and civil society leaders, and vulnerable communities, USAID is helping to pull households out of poverty and promote long-term economic growth by diversifying and strengthening the private sector, and improving the business investment climate. 

Through the $21m Middle East and North Africa Investment Initiative (MENA II) activity, USAID is supporting qualified businesses in Iraq with access to capital investment and business development services to improve firm-level competitiveness and grow their revenue. The activity invests in Iraqi firms through GroFin, a development financier specializing in financing and supporting small and growing businesses across the Middle East and Africa. MENA II also provides technical assistance and other business services to support the selected Iraqi small and medium-sized enterprises (SMEs) set up, formalize, and sustainably scale up their businesses. To date, MENA II has supported 100 entrepreneurs and has invested an additional $4 million to support SMEs  in the north of Iraq to counter the negative economic impacts of the COVID-19 pandemic. 

The $125m Durable Communities and Economic Opportunities (DCEO/Tahfeez) project (known in Arabic as “Tahfeez”, meaning “encouragement”), helps enhance the livelihoods of Iraq’s most vulnerable communities through local private sector growth and job creation. The DCEO/Tahfeez project  is working with micro, small, and medium-sized enterprises (MSMEs) to support the development of local business associations and networks, identify barriers to growth and trade, and advocate collectively for policy changes to improve the local business environment.  DCEO/Tahfeez also identifies individuals eligible for support through the Marla Fund and supports them through entrepreneurship, business acceleration, and enterprise growth services. 

USAID’s Iraqi Governance and Performance Accountability (IGPA/Takamul) project (known in Arabic as “Takamul”, meaning “integration”), seeks to improve the livelihoods of ethnic and religious minorities in northern Iraq. IGPA/Takamul provides individualized business development services to SMEs to boost their access to different markets and attract new private sector investment opportunities. The project also aims to  restore the Ninewa Plains’ reputation as Iraq’s breadbasket and  promote vibrant, multi-ethnic investments in the region by matching local SMEs with potential sources of financing to help business owners rebuild and expand their businesses. In December 2019, IGPA organized the Ninewa Investment Forum in Erbil to showcase  20 investment-ready businesses to international private investors. The event sparked a virtuous cycle of both exciting project opportunities and increased investor confidence.