Libya Approves First Unified State Budget in Over a Decade

Since the 2014 civil war, Libya has been divided between two rival administrations: the internationally recognized Government of National Unity led by Prime Minister Abdulhamid Dbeibah in Tripoli and the eastern-based House of Representatives (HoR) in Benghazi, which is backed by military leader Khalifa Haftar. This division has hindered the country's economic recovery following the chaos that erupted after the 2011 Arab Spring uprising that ousted longtime ruler Muammar Gaddafi.

Libya signs 1st unified state budget in 13 years

On April 11, 2023, Libya's two rival legislative bodies, the HoR and the High Council of State (HSC), approved the country's first unified state budget in over a decade, amounting to 190 billion Libyan dinars (approximately $38 billion). This budget marks the first consensus on unified public spending since 2013 and is seen as a significant step toward financial stability and national unification. The agreement was signed in Tripoli by Abduljalel Shawesh of the HSC and Essa Aribi of the HoR.

The Straits TimesLibya Approves First Unified State Budget in Over 13 YearsLibya signs 1st unified state budget in 13 years

The approved budget allocates funds for various sectors: 73 billion dinars for salaries, 40 billion for development projects, 37 billion for subsidies, 18 billion for family allowances, and 10 billion for operational spending. The central bank emphasized that this agreement would enhance fiscal management and public spending discipline, which are crucial for stabilizing the Libyan dinar and addressing the country’s foreign currency deficit, estimated at $9 billion.

The Straits Times

The Central Bank of Libya stated that the budget approval is a pivotal milestone for fiscal unification and will support efforts to improve macroeconomic indicators. Prime Minister Dbeibah acknowledged the role of the United States in facilitating the agreement, with Massad Boulos, the US senior adviser for Arab and African affairs, congratulating Libya on this development after months of mediation efforts. Boulos noted that the budget would enable financing for the National Oil Corporation, which is vital for increasing energy production and revenues.

Libya signs 1st unified state budget in 13 years

Despite the positive outlook, there are concerns regarding the actual implementation of the budget and whether it will translate into tangible benefits for Libyan citizens. Dbeibah highlighted the need for serious commitment from all parties involved to ensure that the agreement leads to meaningful improvements in daily life for the populace.

Libya signs 1st unified state budget in 13 years

While the central bank reported a significant increase in oil revenues, generating $22 billion last year, it also noted ongoing economic challenges, including a foreign currency deficit and the need for a unified budget to address these issues. The effectiveness of the new budget in overcoming these challenges remains to be seen.

Libya Approves First Unified State Budget in Over 13 Years

• “This is a clear declaration that Libya is capable of overcoming its differences when a unified vision for its future is forged,” — Naji Issa, Central Bank Governor

The Straits Times

• “This step reflects real progress toward unifying fiscal policy and strengthening the good management of public spending,” — Central Bank of Libya

Libya signs 1st unified state budget in 13 years

• “This is a step that carries promising signs, but the true test remains the serious commitment of all parties, so that it translates into tangible results for citizens in their daily lives,” — Abdulhamid Dbeibah, Prime Minister

Libya signs 1st unified state budget in 13 years