Tuesday, 7 February 2012

Libya's budget deficit to reach $10 billion

According to Libya's government the country's budget deficit will be $10 billion this year, as the it struggles to pay its public sector workers and meet energy costs. Speaking about the issue, National Transitional Council's (NTC) head Mustafa Abdel Jalil told French newspaper Figaro that the country has only recovered a fraction of $100 billion in assets frozen abroad during the civil war.

Abdel Jalil noted: “The production of oil has brought in $4 billion in the last five months, while the salaries of civil servants are $22 billion a year and spending on electricity and fuel $14 billion...The budget being prepared should be in deficit of $10 billion.”

On Monday 6th February, International Monetary Fund (IMF) said that restoring order to oil and gas production in Libya is central to rebuilding the country's infrastructure, which has endured considerable damage during the eight months of civil war.

Speaking on January 19th, Libya's Central Bank governor Saddeq Omar Elkaber, said that the government's 2012 budget would register a 7 billion dinar ($5.6 billion) deficit and that the lifting of UN sanctions on the central bank's assets had unfrozen 95 per cent of its $100 billion in assets.

The government, however, is in the process of recovering frozen funds. Abdel Jalil told the media: "Only $6 billion has been repatriated. We're still working to recover the rest.” He also said that local councils were putting together organisational structures and once they were in place money would be injected to pay civil servants. He added that the process should be completed by 17th February.

The NTC won NATO's backing with the removal of Colonel Mu'ammar Qadhafi last year, but it has to restore order in the country and disarm the various militia groups. Abdel Jalil noted that it would be easier to amalgamate militias into the police and national army. He added: “Within two months we think we will have incorporated 60-70 per cent of the revolutionaries.”

Sources: Reuters, Albawaba, WSJ

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

No comments:

Post a Comment