An economic report was published by Independent Arabia website. It highlighted what it described as Libya’s largest ever budget. The country is close to approving its first unified budget in two years. Its value is estimated at 33 billion dollars. The House of Representatives will approve it. A long period of delays has heavily impacted the economy. Citizens’ living standards have also suffered.
The report clarified this step is part of a US-sponsored agreement. Most political parties approved it. The Dbeibah government and the Libyan government both agreed. House of Representatives member Abdul Moneim Al-Arfi stated the precise legal term is ‘adoption,’ not ‘approval.’ The budget was submitted and approved in January. However, it has not been officially activated yet. Central Bank of Libya Governor Naji Issa emphasized the budget’s adoption. This is crucial for legal spending frameworks. It will also activate supervisory bodies to monitor expenditures.
Economic analyst Mokhtar Al-Jadid described recent statements by Presidential Council head Mohamed Al-Manfi. He called them obstructive. Al-Jadid believes they hinder the only realistic political solution. This solution could ease the suffocating political and economic crisis. Al-Jadid added that this path reflects internal power struggles. It is less about a clear national vision. He warned that this rhetoric erodes public trust. This is especially true given the country’s past challenges. Trust in various political parties is declining.
Economist Suleiman Al-Shahoumi expressed caution. He spoke about unifying the government structure and general budget. He explained that a unified budget is a positive step. However, its impact will be limited. It needs a strict executive framework. This framework must ensure it becomes a tool for financial discipline. It should not merely be a mechanism for resource sharing. Al-Shahoumi added that the core issue is not the agreement itself. It lies in its implementation. Past experiences show power-sharing settlements can temporarily calm conflict. However, they also reinforce rentier economy logic. This fuels competition over state resources. He warned against the unified budget becoming a tool for uncontrolled spending. There must be a clear spending ceiling. He affirmed it should be a means to rationalize and control expenditures. This is especially important given the absence of effective oversight mechanisms.
Al-Shahoumi raised several questions. These concern the agreement’s ability to solve or deepen the economic crisis. Will it impose a real spending cap? Or will it merely redistribute existing funds? Will it truly unify financial accounts? Or will it legitimize previous expenditures? Its impact on foreign currency demand is also a question. He believed that a lack of clear answers and weak oversight, along with poor accountability tools, could turn the agreement into a mere redistribution of surplus. It would not be an entry point for financial policy reform.
Economic journalist Mohamed Al-Sarit expressed concerns. He fears that focusing on budget unification, despite its importance, might overlook a deeper problem. This problem relates to the sheer volume of public spending itself. Al-Sarit stated that multiple budgets reflected a clear flaw in public financial management. This included dual spending and lack of oversight. However, it was not the sole cause of the crisis. Libya has experienced significant spending inflation in recent years. This was particularly in salaries and subsidies. Yet, there was no tangible improvement in services or infrastructure. He added that this high spending was often used to contain political and economic crises. It was not directed towards sustainable development projects. Revenues rely almost entirely on oil. They remain vulnerable to price and production fluctuations. This makes them unable to keep pace with the current spending level.
Al-Sarit indicated that the state practically spends more than it earns in revenues. This path is unsustainable. He considered the unified budget a necessary step but insufficient. It needs deeper reforms. These include reordering spending priorities and reducing unnecessary expenses. Reforming the subsidy system and enhancing transparency and oversight are also crucial. He affirmed that diversifying income sources is a fundamental challenge. This will reduce over-reliance on oil. It will also ensure public finance sustainability. He stressed that the challenge is not about the budget size. It is about how public funds are managed. The report concluded by noting this unified budget could be a starting point for real reform. This reform would restore balance between revenues and expenditures. Alternatively, it might become a mere rearrangement of the crisis in a new form. Economic pressures and citizens’ livelihoods would continue to suffer.
