The Minister of Economy and Trade in the Government of National Unity, Mohamed Al-Huwaij, discussed with the Deputy Director-General of the World Trade Organization, Zhang Xiangchen, during their meeting yesterday, Thursday, in the UAE capital Abu Dhabi, ways to capitalize on the opportunities provided by the organization to develop economic and trade policies in Libya.
Al-Huwaij clarified that the Ministry of Economy and Trade is still working on developing trade policies in line with the current events in international trade systems, noting that the ministry has implemented many economic and trade reforms and worked on updating the Libyan investment law, free zones, transit trade, and economic diversification strategy.
The Minister of Economy and Trade in the Government of National Unity emphasized the importance of employing Libya’s resources and harnessing its unique geographical location on the Mediterranean Sea, which makes it one of the international trade routes between African and European markets.
Our confidential source from the Central Bank of Libya disclosed the actual public expenditure from 2021 until the end of 2023, amounting to 420 billion dinars. Of this amount, 340 billion dinars were expenditures made through the accounts of the Ministry of Finance at the Central Bank of Libya, and 80 billion dinars for the years 2022 and 2023, at a rate of 40 billion dinars annually, spent by the National Oil Corporation for importing fuel to the Libyan market under what is known as the barter system, falling under the fourth item of the support category.
The Central Bank source added that the expenditures incurred by all state institutions, whether through the central bank or government institutions, are government expenditures under the auspices of the Government of National Unity and must be included. This follows the same approach adopted by the Libyan Audit Bureau when determining the size of government spending.
The Governor of the Central Bank of Libya, Seddiq Al-Kabeer, stated that the total direct and indirect subsidy expenditures in Libya have reached record levels, totaling 102 billion dinars annually.
Al-Kabeer clarified in a letter addressed to the Prime Minister of the National Unity Government, Abdul Hamid Dbeiebh, that the subsidy item increased from 20.8 billion in 2021, including fuel subsidies, to 61 billion during 2022. He expects the subsidy value to increase beyond 61 billion dinars in 2023, with 41 billion dinars allocated for fuel subsidies, which have significantly grown and annually drain approximately 8.5 billion dollars. This is in addition to other subsidy expenses directed towards the electricity sector, totaling 40 billion.
Al-Kabeer questioned how the expenses under the fourth section, “Subsidy Chapter,” jumped from 20.8 billion dinars, including fuel subsidies, in 2021 to 61 billion dinars in 2022, affirming that this is clear evidence of a flaw, distortion, and mismanagement in the fuel subsidy file.
The Governor of the Central Bank of Libya, Seddiq Al-Kabeer, during his address to the Prime Minister of the Government of National Unity, Abdul Hamid Dbeibeh, called on everyone to work together and adopt the necessary economic and financial policies to emerge from the suffocating crisis. This includes halting parallel and unidentified spending, approving a unified budget for the entirety of Libyan territories, rationalizing spending to preserve the state’s reserves and the rights of future generations, diversifying income sources, enhancing the role of the private sector, and reducing excessive reliance on external imports of consumer goods, which have exceeded 80%.
The Governor emphasized that economic policies require proper allocation of state financial resources to ensure a sustainable decent life for all Libyans.
He added that oil still remains the sole source of state income and the main financier of the general budget by over 95%. The unbridled expansion in public spending over the past years, totaling 420 billion dinars, where consumptive spending accounted for over 95%, at the expense of developmental spending, has exerted pressure on the exchange rate of the Libyan dinar. The payroll item jumped from 33 billion dinars in 2021 to 65 billion dinars in 2023.
The Governor noted the increase in demand for foreign currency and the rise in the exchange rate since the fourth quarter of 2023, which made it difficult for the central bank to defend the current exchange rate of 4.85 dinars per dollar, affirming that the decision to reduce the exchange rate of the Libyan dinar from 1.3 dinars per dollar to 4.85 dinars per dollar was the result of successive crises since 2013 and was not an option for the central bank.
The Governor pointed out that the reduction made by the bank resulted in clear stability during the years 2021 and 2022 in the overall economy, balance in the general budget and balance of payments, and stabilized the exchange rate of the Libyan dinar. He added that arbitrary oil production shutdowns, financial and trade policy distortions, and exacerbation of the deficit in the balance of payments have depleted a large portion of the state’s foreign currency reserves.
Additionally, Al-Kabeer stressed the importance of increasing oil production and exports in the short and medium term, with spending priorities directed towards comprehensive development investment.
Our confidential source from the Central Bank of Libya revealed that the liquidity team at the Central Bank has begun sending the first liquidity shipments amounting to 17 million dinars to the city of Ghat in southern Libya, coming from the Central Bank in Tripoli to support the balances of branches of the National Commercial Bank and North Africa Bank, with 10 million allocated to the NCB and 7 million to NAB.
The source confirmed that the team will continue to transport shipments gradually according to a specific schedule to cover the needs of all bank branches across Libya.
The Supreme Court of Paris issued a final ruling rejecting all demands of the Emirati partner for compensation of approximately $1 billion from the National Oil Corporation. The court also ordered LERCO to pay National Oil Corporation around $140 million for past oil invoices that LERCO refused to settle.
Former Chairman of the National Oil Corporation, Mustafa Sanallah, stated that this final ruling confirms the arbitration ruling issued in January 2018 and the Paris Court of Appeals ruling in February 2021 in the “LERCO No. 1” case. This unappealable ruling affirms the justice of the National Oil Corporation’s position and the illegitimacy of the claims made by the Emirati partner.
Our source from the Central Bank of Libya revealed on Sunday that the Central Bank Governor, Seddiq Al-Kabeer, is considering a decision to withdraw the 50 dinar banknote from circulation. The acceptance and deposit of this denomination will be subject to regulations and procedures related to combating money laundering.
This comes after the Central Bank observed three different versions of the 50 dinar currency circulating in the market: one issued by the Central Bank of Tripoli, another by the Central Bank of Benghazi, and a third unidentified source.
Al-Kabeer cited several reasons for withdrawing the 50 dinar banknote, including concerns about increasing rates of counterfeiting, its continued circulation and widening trading scope without easy differentiation by citizens. Additionally, the 50 dinar banknote is considered a hoarding currency not commonly used in daily transactions among the general public, but rather in some legally dubious activities. This denomination is causing significant damage to the economy and affecting the exchange rate of the Libyan dinar.
Prime Minister of the Government of National Unity, Abdul Hamid Dbeibeh, confirmed that his government is seeking to provide full support for the real estate investment file and to facilitate investment opportunities and finance them in an organized manner.
This came during his opening of the Basheer Al-Jabu Hall at the Faculty of Medical Technology at Misrata University, with a capacity of 370 seats, and the Urban Forum in its fourth edition. Dbeibeh explained that real estate investment is considered one of the main pillars of the Libyan economy at the present time.
Prime Minister of the National Unity Government, Abdul Hamid Dbeibeh, today, Wednesday, followed up on the availability of essential goods and the mechanism for controlling their prices during the month of Ramadan, in the presence of the Ministers of Economy and Trade, Mohamed Al-Huwaij, Transportation, Mohamed Al-Shahoubi, and the State Minister for Cabinet Affairs, Adel Jumaa, and the Deputy Minister of Economy, Suhail Boushiha, and members of the Higher Economic Security Committee.
Dbeibeh emphasized the importance of continuous communication with the Central Bank of Libya and the Customs Authority to monitor documentary credits and their movement, to ensure their arrival before Ramadan.
The Prime Minister stressed the need for all relevant government institutions to collaborate during Ramadan to provide goods and commodities and to confront brokers and speculators after communicating with main distribution sources, emphasizing the necessity of supporting Libyan industries and giving them priority in all procedures, provided that they contribute to providing goods at appropriate prices.
Boushiha presented a position on the open documentary credits during the fourth quarter of last year and the first quarter of the current year in the field of foodstuffs and meat, indicating their contribution to price stability, confirming the availability of adequate quantities of the needs of Libyan families during Ramadan.
The Economic Security Committee also presented its plan to monitor the local market during Ramadan, aiming to prevent monopoly and speculation, and to communicate with major traders to ensure the availability of goods and verify their prices to achieve the comfort of citizens during the holy month.
Minister of Oil and Gas in the Government of National Unity, Mohamed Aoun, stated in his speech during the ceremony organized by the Russian Embassy in Libya on the occasion of the reopening of the embassy in the capital, Tripoli, yesterday, Thursday, that cooperation in the field of energy, oil, and gas is one of the most important and prominent areas of cooperation between Libya and Russia.
Aoun, who heads the Libyan-Russian Joint Committee, affirmed the depth of the relationship between the two countries, which began in 1955, pointing out that the reopening of the Russian Federation Embassy in the capital, Tripoli, is an important step that will enhance friendship and cooperation between the two countries.
He added that the reopening of the Russian embassy in Tripoli sends a strong message to the international community that Libya has become more stable and secure, confirming that the Government of National Unity will provide all services to facilitate the work of the Russian diplomatic mission.
