Libya – A recent economic report by “Erem Business” highlighted the unification of Libya’s budget. This follows more than 13 years of division between the eastern and western governments. The report views this as a vital step to revive the economy and reduce double spending. However, the move remains dependent on clear executive procedures on the ground. It also requires the swift formation of a unified government to end the current division.
Salama Al-Ghuwail, head of the Competition and Anti-Monopoly Council, stated that the agreement is a move in the right direction. He noted that this new path was facilitated by American mediation to create a legal framework. Success depends on commitment to transparency, disclosure, and effective oversight. Development justice in spending is also necessary to balance different regions and prioritize citizens.
Al-Ghuwail emphasized that the real challenge lies in implementation rather than approval. He noted that success depends on moving from theoretical consensus to practical application. This requires the unity of institutions and fair results.
Helmi Al-Qamati, head of the Economics Department at the University of Benghazi, also spoke to the report. He described the adoption of unified public spending tables as an important institutional step. It reflects a shift toward a unified financial framework based on the state’s actual capacity.
Al-Qamati explained that expected oil revenues range between 90 and 120 billion dinars annually. This assumes an oil price between 65 and 75 dollars per barrel. Total spending is expected to reach between 120 and 140 billion dinars. This indicates a potential deficit of 20 to 30 billion dinars. This gap represents 15 to 25 percent of the total budget.
Libya’s economy remains rentier-based with a limited production base. The country relies on imports for over 85 percent of its needs. Al-Qamati warned that increased spending without local production creates direct economic pressure. The International Monetary Fund has previously issued similar warnings.
Fundamental questions remain regarding the authority to issue spending orders. It is unclear who will monitor development projects or if a unified oversight body truly exists. Al-Qamati warned that lack of institutional clarity could make financial unification merely formal.
A unified government is the decisive factor for success. Without it, risks of parallel spending and administrative duplication will persist. Weak oversight could threaten the entire unified development agreement. Success requires a realistic spending ceiling, a cautious oil price estimate, and a single executive authority.
Khaled Bouzeakouk, head of the Benghazi Forum for Economic Development, noted that unification helps rearrange economic priorities. The parallel market saw a slight drop in the dollar exchange rate to 7.90 dinars following the agreement. However, the economic impact remains limited due to the continued existence of two governments.
Economic expert Ahmed Al-Ghaber stated that the unified spending budget requires all resources to be sent to the Central Bank. The bank must then implement spending according to national needs. Bouzeakouk emphasized the need for local and international monitoring within the Central Bank. This ensures all revenues are collected and spending follows required standards.
This unified financial framework is intended to last until a unified government is formed. Such a government is essential for institutional stability. Stability is the primary factor for increasing local and foreign investment. The current agreement alone is not enough to achieve these goals.