The Acting Special Representative of the UN Secretary-General, Stephanie Williams, has briefed the Security Council on the situation in Libya.
In her briefing, Williams reviewed the political, security, economic and financial developments in Libya, stressing the need for the UN Security Council to redoubled efforts to prevent the country from sliding into more chaos.
“The Libyan economy continues to suffer from the impact of the block on oil exports, the armed conflict and COVID-19. The block has cost the country over $7.5 billion in oil sales. It has caused significant damage to oil infrastructure, which may be further damaged as warring parties vie for control.” the UNSMIL stated.
The UNSMIL said that Libya may experience a high budget deficit exceeding 50 per cent in 2020. While the limits on access to foreign exchange imposed by the Central Bank, particularly during Ramadan, helped to mitigate the deficit, the measure also resulted in commodity shortages and higher prices. As tension between the need for austerity measures, and the Government’s responsibility for satisfying demand despite COVID-19-induced economic shocks, my acting Special Representative mediated between the Central Bank and the Government to facilitate a mutually agreeable solution.
“In eastern Libya, the ability of the parallel eastern branch of the Central Bank to extend credit lines to commercial banks to offset their lack of access to revenue began to reach its limits.” the UNSMIL siad, adding that the Central Bank in Bayda’ announced in March that it was unable to continue to finance the parallel “interim government” and would pay for salaries only until June. Although efforts are ongoing to find additional methods to extend the credit line, the dynamic is increasing pressure on local commercial banks, several of which have lost access to foreign exchange.