Libya agrees unified budget but implementation doubts remain

TRIPOLI – Libya’s rival political institutions have approved a unified state budget for the first time in more than a decade, in a breakthrough deal that underscores both renewed coordination efforts and the fragility of the country’s fractured governance system.

The Central Bank of Libya said on Saturday that the House of Representatives and the High Council of State had agreed on a 190 billion Libyan dinar ($29.95 billion) budget, marking a significant step toward restoring financial unity in a country divided by conflict and competing administrations since 2014.

The agreement, signed in Tripoli by representatives of both chambers, Essa Aribi for the Benghazi-based House of Representatives and Abduljalel Shawesh representing the High Council of State, was concluded under the supervision of Central Bank Governor Naji Issa.

Issa described the deal as “a clear declaration that Libya is capable of overcoming its differences when a unified vision for its future is forged,” adding that it represents a shift toward financial stability and an end to years of fiscal fragmentation.

He said the agreement goes beyond a financial framework, marking the start of a new phase of cooperation and economic discipline, particularly in the management of oil revenues, which account for more than 95 percent of Libya’s economy.

Libya’s last unified national budget was approved in 2013, before the country’s civil war led to rival governments in the east and west and the emergence of parallel financial institutions.

Under the new agreement, around 73 billion dinars is allocated for salaries, 37 billion for subsidies, 40 billion for development projects, 18 billion for family allowances and 10 billion for operational spending, with a further 12 billion earmarked for the National Oil Corporation.

The internationally recognised Government of National Unity in Tripoli will oversee salaries, operational expenditure and subsidies, while a joint committee representing all parties will manage development priorities under Central Bank supervision.

The High Council of State said the deal reflects a commitment to balanced development across Libya and ensures fairer distribution of national resources. Osama Hamad, who heads a parallel administration in the east aligned with the House of Representatives, said it provides a foundation for nationwide development programmes and improved economic balance.

The Central Bank said the approval of the budget by both chambers could help reinforce financial stability and marked an important step toward ending years of institutional division, describing it as a “pivotal milestone” in economic reform.

Libya’s top political figures welcomed the wider spending framework, while stressing that its success depends entirely on implementation.

Presidential Council Chairman Mohamed al-Menfi and House of Representatives Speaker Aguila Saleh both endorsed the agreement on the governing principles of unified public expenditure, signed as an annex to the broader development spending framework.

Al-Menfi said in a post on X that the deal reflects the “legitimacy of the relevant institutions” and strengthens transparency, adding that it offers a pragmatic approach to managing Libya’s divided governance structure while broadening participation beyond exclusionary or bilateral arrangements.

He stressed that implementation must ensure the regular collection of oil revenues through official channels in line with the law, warning against distortions linked to marginal oilfield development contracts.

He added that spending must remain within available revenues in order to protect the currency, improve living standards and purchasing power, and avoid depletion of foreign reserves, saying these indicators would determine the agreement’s real success.

Saleh also praised the deal as a key step toward unifying public spending and strengthening financial discipline, saying it would support the national economy and help stabilise purchasing power across the country.

Prime Minister Abdulhamid Dbeibah of the outgoing Government of National Unity described the agreement as a positive signal, but stressed that its value will be measured by tangible results for citizens.

The eastern-based administration aligned with the House of Representatives said the agreement demonstrated Libya’s ability to overcome divisions when political will aligns, paving the way for greater financial discipline and cooperation.

The agreement also comes amid continued rivalry between eastern and western authorities, who have long struggled to reconcile competing budgets and parallel financial systems.

US Senior Adviser for Arab and African Affairs Massad Boulos welcomed the deal, saying it followed months of US-facilitated efforts as part of a broader roadmap toward peace and national unification, and would help support development projects while strengthening the capacity of the National Oil Corporation to boost production and revenues.

Despite the breakthrough, analysts caution that Libya’s fragmented political landscape means implementation risks remain high, with the real test lying in whether rival institutions can sustain coordination beyond the signing ceremony.

For now, however, the agreement marks a rare moment of convergence in a country where political division has long been mirrored by competing budgets and parallel state structures.