KRG to start paying October salaries Tuesday despite deficit

ERBIL, Kurdistan Region - The Kurdistan Regional Government (KRG) will start paying the October salaries of its civil servants on Tuesday as its financial disputes with the federal government remain unsolved.

The KRG finance ministry said in a statement that the salaries will be disbursed over the next six days, adding that funds to cover the deficit and November salaries are yet to be transferred by Baghdad.

Civil servants in the Kurdistan Region and employees in disputed areas such as Kirkuk, whose payroll is managed by the KRG, have not received their salaries for over two months. Due to the delays, most schools and universities across the Sulaimani and Halabja provinces have boycotted classes since December 1.

This comes a day after the federal government and the KRG agreed on steps to address delayed salaries of the Region’s employees and other financial disputes.

The Iraqi finance ministry said that necessary reallocations will be made which accounts for 430 billion dinars (around $326 million) that is believed to be allocated for October, November, and December salaries.

“The amount of money allocated to fill the salary deficit has not yet been transferred to the bank account of our ministry,” the KRG finance ministry said, adding the budget for November salaries has also not been transferred to them.

The amount needed to cover the budget deficit is anticipated to be received in the coming days, as the KRG distributes employee salaries, allocating payments to groups of ministries each day. The KRG has already received 761 billion dinars ($580 million) from Baghdad to pay October salaries.

The Kurdish government did not initially accept the payment, holding out hope that its efforts to secure the full amount would succeed. The KRG has said that it needs over 900 billion dinars (about $687 million) monthly to cover its payroll.

During a parliamentary session earlier this month, Iraqi Prime Minister Mohammed Shia’ al-Sudani told lawmakers that the federal budget allocation for the Kurdistan Region’s civil servant salaries has been depleted, adding that increasing the funds would require a reallocation from another budget section. Sudani suggested that the resumption of the Kurdistan Region’s oil exports, which have been stalled since March last year, could help resolve ongoing issues.

He also remarked that the KRG needs to comply with its obligations, particularly regarding the handover of non-oil revenues to the federal government, adding that Erbil has failed to comply so far.