15 January 2025: Economic concerns rise as CBL figures for 2024 show 5.2 billion USD deficit
This week we look at the latest CBL figures, as well as outrage at leaked videos of abuse of prisoners at Qarnada prison in the East and GNU-aligned forces securing Zawiyya refinery.
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Economic concerns rise as CBL figures for 2024 show 5.2 billion USD deficit
Incident: The Central Bank of Libya (CBL) has released its figures for 2024, highlighting significant deficits.
On 13 January, the CBL released its monthly statement of public revenue and expenditure, covering the period from 1 January to 31 December 2024. Libya’s revenue was 123.51 billion LYD, of which 76.7 billion was from oil sales, 13.1 billion from oil royalties, and 22.5 billion was from the foreign exchange sales tax revenue. Expenditure was 123.2 billion LYD, of which 67.6 billion was on Chapter 1 (salaries), 7.7 billion on Chapter 2 (Operations), 22 billion on Chapter 3 (Development), and 16.1 on Chapter 4 (Subsidies) plus 6.7 billion and 3.1 billion for the 2023 exceptional budgets to the NOC and GECOL respectively up until October 2024. This reveals a surplus of only 300 million LYD. [O-A1] These figures are similar to 2023, when there was 125.9 billion LYD of income and 125.7 billion LYD of expenditure.
On foreign currency, the CBL reported total expenditure of 27.029 billion USD, of which 4.3 billion was used by the CBL and 22.7 billion by commercial banks. Total foreign exchange usage has risen from 26.446 billion USD in 2023 and 20.606 billion USD in 2022. Oil revenues and royalties transferred to the CBL in 2024 amounted to 18.6 billion USD (compared to 25.3 billion USD in 2023 and 27.3 billion in 2022) and returns on investments by the CBL amounted to 3.2 billion USD. This means there was a net foreign exchange deficit of 5.2 billion USD, with the CBL saying this was due to the reduced amount of oil revenues transferred to the CBL during the year. The statement explained that fuel bills have been directly deducted from oil sales by the NOC since November 2021.
Separately on 13 January, the CBL said that the platform for reserving foreign currency for personal use continues to operate with 593 million USD processed through the system so far this month.
Comment: It is notable that several Government of National Unity (GNU) ministries have received Chapter 3 funding under the new CBL Governor Naji Essa (having been cut off under his predecessor Sadiq al-Kabir), with the Ministry of Finance and affiliated bodies receiving the largest share at around 1.26 billion LYD, as well as the Ministry of Foreign Affairs, Ministry of Education and the Council of Ministers. The 22 billion LYD total figure excludes 1.88 billion LYD for development for the NOC and 3.1 billion LYD for GECOL under their exceptional budgets. Most of the 22 billion LYD is made up of 10 billion LYD to development projects and 10 billion LYD to NOC and GECOL projects, both of which are noted as ‘suspended’. These have been added on the December update – they were not listed on previous monthly statements this year.
The statement said 950 million USD was allocated until 30 September 2024 to finance the development of the eastern region. Cash liquidity of 67.7 billion LYD has been distributed to commercial banks across Libya throughout 2024. It also highlighted that the numbers of Points of Sale (POS) machines issued had increased, as had the numbers of cards issued and the numbers of payments using these methods.
Significance: The significant foreign currency deficit recorded for 2024 is a concerning indicator of the state of the Libyan economy. The bloated crude-for-crude barter system is certainly a major driver of this deficit but there are few signs of any genuine attempts to halt the system or to meaningfully tackle fuel subsidies. As such, it is likely to remain in place, meaning the deficit is only likely to grow in the coming months. This could see Libya eating into its foreign reserves and could drive the devaluation of the dinar, worsening the cost of living crisis in the country and pushing Libya towards economic decline.
State spending remains bloated and it is possible that there is additional spending that has not been recorded. Although the CBL has made an effort to increase the level of detail in its monthly reporting in the name of transparency, the reality is that these are very high-level figures that are easily manipulated. Indeed, the recent Audit Bureau report highlights a whole wealth of discrepancies and mismanagement. Despite international entreaties to Libyan actors to agree a financial mechanism to disburse resources equitably, no progress has been made on this front and nor is any progress likely in the short term.
If nothing changes, it seems likely the CBL will continue disbursing funds to both the GNU and to the eastern authorities without a budget or fiscal oversight. This is likely to further accentuate the brewing economic crisis. It could also lead to heightened concern among international financial institutions, increasing the risk of the CBL being cut off from access to international banking once more.
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Videos of abuse of prisoners at Qarnada prison in eastern Libya spark outrage
Incident: On 12 January, activists circulated videos showing horrific abuse and torture of detainees at the notorious Qarnada prison south of the city of Shahat in eastern Libya, which is under the control of the Libyan National Army (LNA). The videos show abuse of individual prisoners as well as groups of prisoners and have been widely shared across Libya. In response, on 14 January the LNA military police reportedly arrested 7 prison guards and members of the Tariq Bin Ziyad Battalion for investigation.
West Coast Military Region secures Zawiyya refinery and meets with refinery staff
Incident: The West Coast Military Region says it has secured Zawiyya refinery following the GNU operation in the city, with its commander meeting with key officials. On 7 January, the West Coast Military Region announced in a statement, the activation of fixed deployment points and mobile patrols around Zawiyya refinery and its entrances, ‘to ensure the smooth running of operations and the continuity of production,’ confirming its commitment to maintaining the security of vital facilities and protecting them. The statement stressed that operations will continue until their goals of restoring security and eliminating criminal activities are achieved, while ensuring the protection of civilians and preserving public and private property.
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Videos of abuse of prisoners at Qarnada prison in eastern Libya spark outrage
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