Libya's U.N.-backed government, central bank to cooperate in 2017

December 31, 2016
Source: Reuters
Libya's U.N.-backed government, central bank to cooperate in 2017

Libya's Government of National Accord (GNA) and central bank in Tripoli say they have agreed to work together to tackle urgent economic problems in 2017, creating a potential lifeline for the U.N.-backed GNA.

The government has struggled to extend its authority since arriving in Tripoli in March, hampered by its lack of control over public finances.

The GNA was created to reconcile rival governments set up in Tripoli and the east of Libya in 2014 and to end a conflict between their armed supporters, but it has faced resistance from various factions.

The central bank has been reluctant to release public funding before the GNA wins endorsement from Libya's eastern-based parliament, which it has so far failed to obtain.

With no hope of parliamentary approval for budgets, the GNA has been forced to seek instalments of emergency funding.

There have also been disagreements over how to tackle problems including a liquidity crisis, inflation, a widening black market exchange rate premium and a huge public deficit.

The GNA said in a statement on Friday that after meetings with the central bank, the Audit Bureau and the National Oil Corporation (NOC), 37 billion Libyan dinars ($25.7 billion) of public spending had been agreed for next year.

That includes 20.7 billion dinars to cover public salaries and 6.3 billion dinars for basic public goods and services and fuel subsidies, the statement said.