Atwasat

Libya Pres. Council members and Central Bank reach agreement on fuel subsidies and exchange rate reforms




Alwasat - Cairo Tue 05 Jun 2018, 09:22 PM
alwasat radio

The governor of Libya's central bank in Tripoli said on Tuesday that officials in the capital had reached agreement on enacting key reforms, including to fuel subsidies and the exchange rate, by the end of July.

Libya is a major oil producer and was once one of the wealthiest countries in the region, but its economy has been crippled by conflict and political division over the past five years.

With international support, the National Oil Corporation and the central bank in Tripoli have retained control over oil production and revenues, which have partially recovered in the past year.

However, it remains unclear to what extent any reforms enacted in Tripoli can take effect across the whole country since eastern Libya is controlled by rival authorities with their own central bank.

Recent attempts to rein in the deficit and the informal economy by cutting huge fuel subsidies and public salary spending and by limiting the spread between the official and black market exchange rate have come to little.

Speaking in Tunis after the eighth in a series of Western-backed dialogue meetings on Libya's economy, Tripoli central bank governor Sadiq al-Kabir said there was agreement among participants on tackling deep-rooted economic distortions.

"A series of reforms have been reached, the most important of which concern fuel subsidies and the exchange rate," he said, without giving further details.

Kabir said practical steps would be addressed after the end of the holy month of Ramadan, in mid-June, and that following this, "at the most after six weeks the decisions for implementation will be ready".

"We hope that it will be a leap forward for Libya and contribute to alleviating the suffering of Libyans as much as possible."

Libya's official exchange rate has stood unchanged at 1.4 dinars to the dollar, while a dollar buys around 7 dinars on the black market, allowing those with access to dollars to make vast profits.

The Tunis meeting grouped together senior members of the internationally recognised government in Tripoli, Western diplomats and representatives from the International Monetary Fund and World Bank.

It comes after the Audit Bureau in Tripoli published allegations last month of widespread waste and corruption in western Libya in a report that ran to more than 900 pages, increasing public pressure on the government and Kabir, whom Libya's eastern-based parliament has tried to replace.

The Audit Bureau did not report on eastern regions.

"We urge all political leaders, ministers, and Libyan government officials to manage them judiciously, increase transparency, and minimise fraud, waste and abuse of power," the ambassadors of France, Germany, Italy, Britain, the United States and the European Union said in a joint statement after the Tunis meeting.

"Libya's institutions, including the central bank, must unify in order to effectively implement the change the country requires." 

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