A report issued by the US State Department revealed that Libya is among the list of countries that do not meet the minimum standards of financial transparency, according to an evaluation that included the year 2021.
The report attributed the lack of financial transparency in Libya to the persistence of internal political divisions, which prevented the government from implementing regular budget operations, which negatively affected public financial transparency and state operations.
In the reporting period, the government did not publish an executive budget proposal or any budget summary that was enacted within a reasonable time, only a year-end budget implementation report was made available on the Internet, so limited information on debt obligations, including debt of state-owned enterprises, as the budget included only profits and financial allocations for one state-owned enterprise. Thus, the available documents lack sufficient details.
In addition, audit reports of large state-owned enterprises and information on expenditures to support executive offices were not publicly available, and military and intelligence budgets were not subject to civilian oversight.
Libya has not yet fully used internationally accepted accounting principles. The supreme audit institution did not meet international standards for independence. Though it reviewed some government accounts, no public reports were made available within a reasonable time.
In accordance with the law, the government follows the standards and procedures for granting contracts and licenses to extract natural resources, but the information available on this subject is general.
In a related context, the Sovereign Wealth Fund did not reveal its source of funding or its general approach to withdrawals, but only published that Libya’s financial transparency would be improved by publishing a proposal for an executive budget and a planned budget within a reasonable period and by disclosing in budget documents debt obligations, including debts of state-owned enterprises, publishing expenditures to support executive offices, subject military and intelligence budgets to general civilian oversight, and ensuring that the SAI meets international standards for independence. The fund also indicated that military and intelligence budgets would be subjected to more civilian oversight. Based on internationally accepted accounting principles, it also revealed that the reports of higher audit institutions on the budget implemented by the government and state-owned enterprises will be made available within a reasonable period, in order to ensure the source of funding for the sovereign wealth fund and its general approach to withdrawals.