Tripoli: The Government of National Unity (GNU) has attributed the erosion of the Libyan dinar’s value, rising prices, and the deterioration of citizens’ purchasing power to the spending activities of the government assigned by the House of Representatives, which amount to 59 billion dinars.
According to Libyan News Agency, this statement from the GNU came in response to a report issued by the Central Bank of Libya (CBL) that highlighted the dire financial situation of the Libyan state. The report warned of potential future risks and current economic challenges if the ongoing dual spending by the two governments isn’t unified, as it would exert further pressure on the economy and affect the stability of the exchange rate.
The CBL report indicated that governmental division within state institutions and ministries has led to inconsistent decisions, weakening the CBL’s ability to implement effective monetary policies. The GNU’s statement elaborated that the 59 billion dinars spent by the House of Representatives’ government were outside of official financial arrangements, contributing to the erosion of the dinar’s value and negatively impacting the purchasing power of citizens.
The GNU criticized this spending as not only a legal violation but also a burden on the national budget and public debt, resulting in inflation, weak purchasing power, and financial instability for Libyan citizens. The statement highlighted that the “parallel government” spending is five times the 12 billion dinars allocated by the GNU for development projects across Libya.
The GNU detailed its official spending of 123.2 billion dinars, with 54.9% allocated to salaries across Libya, amounting to 67.618 billion dinars. Additionally, 6.3% was spent on operating expenses for ministries and public institutions, totaling 7.741 billion dinars. The government emphasized its development spending, including infrastructure projects, educational facilities, and water services, which were distributed throughout all Libyan regions.
Regarding support spending, the GNU stated that it had allocated 16 billion dinars for grants, pensions, fuel, electricity, and medicine. An exceptional budget for central projects was also mentioned, with significant allocations for the National Oil Corporation and the General Electricity Company.
The GNU asserted that its spending benefits all Libyan citizens and regions, stressing that efforts outside approved arrangements undermine transparency and accountability, harming the national interest. The government labeled “parallel spending” as a threat to state unity and development opportunities, calling for unified approaches to ensure fair distribution and national stability.
The statement concluded by highlighting the economic damage caused by such spending, including a $9.8 billion deficit due to increased foreign currency demand outside official channels, which depleted foreign reserves and weakened the Central Bank’s intervention capacity. The GNU claimed not to have incurred public debt, attributing existing debt to previous governments’ actions, and warned that current spending policies risk financial sustainability and future generations’ well-being.