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Launch of the General Financial Reform Program

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As a step towards legislating and reforming the public administrative financial systems in Libya, the Government of National Accord’s Ministry of Finance announced a general financial reform program in a release of which “Tabadul” received a copy.

The ministry stated that this announcement is a preliminary step towards a five-year program of reform initiatives that it has developed and set.

The ministry added that, according to the first section of the General Budget, Libya’s total of wages is estimated at 55 % of the gross domestic product, which is the highest number in the Middle East and North Africa. This is the result of paying salaries of about 2 million employees of Libya’s public sector.

The ministry affirmed that the initial assessment it has conducted proved that many resources and opportunities are available to carry out extensive reforms, that is why the reform program was designed to address the system’s waste of resources and to run streamlined processes across the Government.

The ministry revealed that the reforms will cover several measures, namely complementarity, communication, and designing an integrated accounting manual along with a technical information database to improve financial reporting.

Additionally, the reform will adjust the salary system by developing an integrated salary software to reduce waste due to inaccurate or redundant data, providing control systems, and setting out a comprehensive capacity-building plan for civil services within the Ministry of Finance.

Minister of Finance, Mr. Faraj Boumtari, expressed the ministry’s commitment to the reform program. “since I took my position a year ago, I have identified several key areas that require improvement, and today we are providing solutions as a reform program” he said. “By addressing the weaknesses of the first section of the budget, I believe that the ministry can reduce costs by up to 10 % during the first year of the program implementation” he added.

Furthermore, he indicated that the reform program will not only achieve the required effectiveness in the financial affairs of Libya’s public sector, but will also pave the way to renew the culture of transparency, accountability, and governance in the Libyan public sector’s administrative processes.

The Central Bank of Libya obstructs 2020 budget proposal

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During a press conference held today, the Minister of Finance Faraj Bumatari accused the Central Bank of obstructing 2020 budget proposal presented by the ministry to the Presidential Council of Libya, the Libyan Audit Bureau, as well as to the Central Bank of Libya, adding that there is an imbalance in the country’s structure.

He also confirmed that what his ministry suggested regarding the reduction of the Presidential Council salaries will minimize the gap between the salaries of citizens and officials.

Libya: Islamic instruments will finance the state’s projects

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In today’s press conference, the Minister of Finance Fraj Bomtari confirmed that there will be a project for handling salaries system due to the inflation in the administrative body.

Boumtari affirmed that they intend to link the system with Civil Status, funders and commercial banks with a view to updating data.

He also emphasized that the Cabinet agreed to establish joint public-private projects. For instance, next week, the Cabinet will launch the first body to start looking for participation in the government’s infrastructure and housing projects.

Another body has also been established in which part of the state’s projects are financed by Islamic instruments.

Boumtari also mentioned that permission was taken to establish a special purpose company in order to alleviate burden on the government spending, as well as to provide funds for certain projects.

It is worth mentioning that the Ministry of Finance declared, during the press seminar, the release of a general financial reform program.

Libya: a financial reform program for 2020

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During a press conference held today, the Minister of Finance Faraj Boumtari declared the launch of a financial reform program for 2020, in a step he described as “great” for the reform of public financial management systems in Libya.

The Ministry indicated that it is a step within a 5-year program that includes reform initiatives planned by the Ministry of Finance.

In addition, he expressed the Ministry’s commitment to the reform program, expressing his belief in the ministry’s ability to reduce costs by up to 10%.

He added that the reform program can also pave the way toward renewing the transparency, responsibility and governance confidence in the Libyan administrative systems.

“The reform program will achieve the required efficiency in the financial affairs of the public sector in Libya,” he said.

2020 financial arrangements should be reduced

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The governor’s director office at the Central Bank of Libya, Abdulatif Al-Tounsi, claimed that “Under the circumstances of oil blockades, which represents the country’s main source of income, the financial arrangements for 2020 should be reduced to a minimum of 35 billion dinars.”

Al-Tounsi clarified that the solution the Government must immediately take is to reduce public expenditures to the lowest levels.

Hence, it should limit itself only to 2020 financial arrangements related to the necessary and inevitable expenditures, such as the minimum wages and salaries, the minimum operational expenses, as well as being limited only to development programs and projects, like paying expenses for students studying abroad.

He also confirmed that Libya’s Central Bank presented a proposal to the government regarding the financial arrangements for 2020 so that the public expenditure in this stage will not exceed 35 billion dinars, instead of the government’s 50 billion dinars suggestion.

Libya’s Central Bank suggested some other measures too, the most important of which is limiting the basic salaries’ payments, suspending rewards and extra work allowances in an exceptional way this year.

“We also called for the gradual or total removal of subsidies on fuel and electricity”, he emphasized.

Libya: oil revenues are catastrophic

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In a statement published today on its official Facebook page, the Central Bank of Libya warned against the continuous suspension of oil production and exports as it represents the only source of the country’s revenues.

Libya had earnt no oil revenues in January 2020 due to the closure of oil facilities. For this reason, the Central Bank called for the necessity of restoring oil production immediately and claimed that last month’s oil revenues were zero.

Morover, it confirmed that the losses caused by this blockade reached about 2.5 billion dinars in January.

Shutting down Zawiya refinery: further financial losses

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National Oil Corporation (NOC) confirms that it was forced to shut down the Zawiya refinery on Saturday, February 8, 2020 as a result of a valve closure in the Hamada region, on the main pipeline between Sharara field and Zawiya refinery, halting production at the field.

The refinery shutdown will exacerbate the problem of managing, importing and distributing fuel and will lead to very significant costs to the treasury to import additional fuel to replace the refinery’s production.

“This illegal blockade is creating an unprecedented challenge for NOC to continue the supply of fuel to the Libyan people and the country’s vital facilities, such as power stations”, said NOC chairman Mustafa Sanalla.

He added, “Political interference in the Libyan oil and gas sector will have devastating short- and long-term effects on the Libyan economy and the Libyan people. This is developing into a true national crisis. Immediate action is needed to end this irresponsible blockade.”

The Zawiya refinery produces monthly: 120,000 metric tons of diesel, 49,000 metric tons of gasoline, 120,000 metric tons of fuel oil, 6,000 metric tons of liquid petroleum gas (LPG) and 90,000 metric tons of jet fuel.

LAICO managed to overcome its losses

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Member of the economic committee in the House of Representatives in Tripoli, Mohamed Raied, claimed that the Libyan African Investment Company managed to achieve profits and exceeded its previous losses.

In a statement to “Sada”, Raied emphasized that the company achieved good profits by restructuring and discarding troubled companies it owned.

“Compared to other companies and investment institutions, LAICO is operating properly”, He said.

According to the available data, the Libyan African Investment Company has a capital of one billion dollars, as it manages a group of companies and investments in different countries in the continent.

The dollar eases after rally

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Today, the dollar held gains after job market data provided the latest sign of U.S economic strength. For instance, it was stable at 4.26.

As far as the Australian dollar is concerned, it touched a fresh decade-low of $0.6657 in early trade, and last stood at $0.6680.

The euro rose to 4.63 after recording 4.60 yesterday. However, the pound hit 5.60, and the Tunisian dinar was at a rate of 1.51.


Today’s Gold Gains

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Today, gold rose to a near one-week high as mounting concerns about the impact from China’s coronavirus lifted the appeal of safe-haven assets, after the number of casualties exceeded 900.

Spot gold rose 0.2% to $1,572.86 per ounce by 10:53 GMT, having hit its highest since February 4 at $1,576.21 earlier in the session. Adding to that, U.S gold futures were up 0.2% at $1,576.50 .