BusinessLibya

Libya: Nothing has changed as one year of “economic reforms” passes by

Today last year, the Presidential Council approved economic reforms’ package – 11 points – that included fees on foreign currency purchases for personal and commercial purposes worth 183% and then in last July, the Presidential Council dropped it to 163%.

The reforms also included an exclusion of family dollar grant transactions from the fees, while the transfers for health care and study were increased to 10.000 dollars per citizen a year.

Regarding letters of credit, the Presidential Council prevented approvals of any letters of credit to import goods that can be imported by the private sector, except for necessary and strategic commodities.

The Presidential Council said at the time that the fees incoming to the state’s treasury would be used to decrease the General Debt of the country, while economists criticized the reforms as they fail to tackle the general expenditure on salaries that are over 50% of the budget. They say the reforms tackled only the exchange rates’ margin between the official bank rates and those of the black market, which used to sell one dollar for above 6.75 dinars but nowadays it sells one dollar for 4.25 dinars – 2.5 dinars’ difference in one year.

The reforms also failed short of any solutions to the cash crisis at the Libyan banks, which are still plagued by lack of liquidity except for holidays and Eid days.

This is coupled with the failure of the Central Bank of Libya (CBL) to set up a plan to attract back into the banks the money circulated outside, which is worth over 36 billion dinars as of last June, while by the end of last year, the money circulated outside banks was worth over 34.730 billion dinars.

The question is; did the Presidential Council put a plan to enhance the economy of Libya for the new year of the reforms’ package? Or this year be just like the last one!

Related Articles

Back to top button