Libyan Parties Agree on Two-Month Unified National Budget

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On Monday, the United Nations Support Mission to Libya (UNSMIL) said that the Libyan Council of Ministers agreed to a two-month interim budget for 2021. This is the first time since 2014, Libya has had one unified national budget.

In a statement, UNSMIL said that agreement on the budget was reached with the support of international financial institutions, and the Economic Working Group of the Berlin Conference. This brought together the relevant parties from both sides of the country to reach an agreement. They agreed to a two-month budget rather than a full year, to allow for the newly formed Presidency Council to decide on the complete budget for 2021.

It noted that the unification of the budget followed the Board of Directors of the Central Bank of Libya’s (CBL) decision to allocate a no-interest loan to commercial banks, in order to reduce the backlog in uncleared cheques. “This decision will not address the underlying cause of what is known as a credit crunch, but it will reduce pressure on the banking system,” the statement read.

These two reforms in addition to the recent unification of the exchange rate, the reactivation of the CBL board, and the progress made in the financial review of the CBL and the Libyan Investment Authority (LIA) are all vital reforms needed to regularize the management of Libya’s oil revenue.

UNSMIL expressed its hope that with a newly unified executive authority would be committed to working for the country’s national interests and restoring its sovereignty. This would allow Libya to be able to move closer to an equitable management of its oil resources for the benefit of its people.