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By Libya Herald reporter.
Tunis, 7 February 2016:
Salaries paid by the Central Bank of Libya (CBL) in 2015 to state sector employees . . .[restrict]were a third over what was planned. They amounted to LD 21 billion, prominent businessman Husni Bey has told the Libya Herald, citing a senior CBL official.
The amount budgeted by the CBL for the year was LD 15 billion, although the House of Representatives’ LD 41-billion ($30-billion) budget for 2015 made an LD 20-billion provision for salaries while the LD43-billion budget passed by the General National Congress in Tripoli put the figure at some LD 19 billion.
Those paid included teachers, police, doctors and hospital workers, state organisation employees, ministry officials and others, regardless of whether they were in east, west or south, or working for the Thinni government or the administration in Tripoli. They also included the Libyan National Army (LNA) and members of brigades, including those fighting against the LNA in Benghazi and elsewhere.
Adding to the salaries overspend, the drop in oil and gas sales to a current average of 450,000 barrels a day (these includes b/d-equivalent for gas sales) and in the oil price caused further financial havoc.
Around 97 percent of Libyan state spending comes from sales of oil and gas. The drop in price and sales resulted in earnings of just some LD 7 billion ($5 billion) in 2015.
This has created a 2015 spending deficit of some LD 35 billion ($25 billion) – LD 9 billion over the budgeted shortfall of LD 26 billion ($19 billion).
To fund the deficit, the CBL has had to draw on foreign currency reserves. These are now put at $55 billion.
However, the bank has made it clear that drawdowns at around $25 billion a year cannot continue. At that rate, all Libya’s currency reserves would be gone in two years. The CBL has said that the maximum it will draw down in future is $12 billion a year.
It means that if there is no improvement in oil sales, which is unlikely to happen without a political settlement, Libya is likely to run out of cash to pay salaries and subsidies by mid-summer. [/restrict]
