The International Monetary Fund (IMF) said that the resumption of IMF monitoring in Libya “is a critical step towards the country’s stability and economic recovery.”
In a report, the IMF added that “it is a signal of the international community’s confidence in Libya’s ability to undertake necessary reforms, and address its economic challenges.”
However, while this development is promising, the IMF cautions that “success will hinge on Libya’s ability to maintain a stable political and security environment. It is also dependent on the government’s ability to develop the institutional capacity to implement these reforms effectively.”
The IMF confirmed that it will “continue to work with Libya, providing technical assistance and policy advice, in the country’s quest to restore stability and secure a prosperous future for its people. As Libya embarks on this crucial journey of economic transformation, the rest of the world watches, hopeful and supportive.”
The Fund said that “Libya faces a unique set of challenges. The nation is still recovering from a decade of conflict, and its economy heavily depends on oil production which can be volatile. Meanwhile, the country is also grappling with outdated infrastructure, rampant corruption, and a lack of diversified income streams. Inflation is high, and many Libyans still lack access to basic services.”
The IMF’s surveillance mission is designed to address these issues head-on. The fund is working closely with the government to implement a comprehensive reform program. This plan will include measures aimed at modernising and diversifying the economy, combating corruption, improving infrastructure, and making the provision of services more equitable and efficient.
Libya is also making strides in fiscal reform. The government is in the process of designing a medium-term fiscal framework (MTFF) that will aim to balance spending needs, with revenue potentials. The MTFF will work towards reducing reliance on oil revenue, in favour of diversifying the country’s revenue sources.
In addition, improving governance, particularly within the oil sector, is a key priority for the government and the IMF. Measures are being implemented to increase transparency in revenue management and strengthen regulatory oversight. A commitment to ensuring the country’s wealth is distributed fairly among its population is essential to ensure the success of the reform program.
