A major step forward in the ongoing political and economic drama in Libya was the approval of a large 2024 budget by the eastern-based parliament, totaling 90 billion Libyan dinars (about $18.5 billion). The Benghazi-based administration, headed by Osama Hamad, took office in March 2023, and this budget is particularly for them. Khalifa Haftar, the military leader, supports Hamad’s administration, which is in charge of the eastern provinces and a sizable chunk of southern Libya.
Funding for development projects is not included in this budget approval, which was a significant cause of controversy. Aisha Tublqi, a member of the House of Representatives (HoR), claims that the reason for this exclusion was that the parliament demanded more money while the administration only offered a sizeable 30 billion LYD for development over three years. This choice highlights the continuous difficulties and close examination of Libya’s legislative procedures, illustrating the difficulties of leading a country with a sharply divided political environment.
The uncertainty surrounding the collaboration between the Benghazi-based administration and Sadiq Kabir, the governor of the Central Bank of Libya (CBL) in Tripoli, further complicates the fiscal position. The CBL is unique in that it is the only internationally acknowledged clearinghouse for the country’s oil earnings, which constitute the backbone of Libya’s economy. The unanswered question of whether Kabir will give money to Hamad’s government serves as a reminder of the divisions that exist between the administrative groups on the east and west.
The approval of the budget coincides with broader concerns about Libya’s political unity and budgetary management among the national and international community. Kabir pushed for the creation of a new national budget and unified government in February. This action seemed to put his old friend, Abdulhamid al-Dbeibah, the acting prime minister of the Government of National Unity in Tripoli, under pressure. Dbeibah has made no secret of his refusal to step down in favor of a new government without first holding a national election. His government was founded in 2021 through a process supported by the United Nations.
A nation that has struggled with more than ten years of conflict and turmoil serves as the backdrop for these financial and administrative developments. Since the anticipated elections scheduled for December 2021 did not take place, the political process intended to stabilize Libya has come to a complete halt. Disagreements about election laws and candidate eligibility caused the election to be thrown off course, widening political rifts and creating the possibility of new violence and division.
The fight for authority over public funds and government operations is symbolic of the larger struggle in Libya for a long-term political settlement, as the country has been in turmoil since Muammar Gaddafi was toppled in 2011. The international community, including the United Nations fears that Libya could return to a state of conflict and split administration as a result of the current unrest.
U.N. special envoy Abdullah Bathily stressed the need of reaching a national budget agreement and addressing the serious shortcomings facing the nation during his speech to the U.N. Security Council earlier this month. Bathily, who recently submitted his resignation to Antonio Guterres, the Secretary-General of the United Nations, emphasized the terrible economic circumstances that Libya is currently suffering, particularly the Central Bank’s cautions about an imminent liquidity crisis.
