Libya's rival legislative bodies have signed a landmark US-mediated agreement to unify public spending across the divided nation for the first time in more than 13 years, according to the country's central bank.
The accord, signed by Issa Al-Arebi representing the Benghazi-based House of Representatives and Abdul Jalil Al-Shawish representing Tripoli's High Council of State, marks a rare breakthrough in efforts to reconcile the North African country's fractured political landscape. Libya has remained split since the 2011 Arab Spring uprising that ousted longtime ruler Muammar Gaddafi, fragmenting authority between a UN-recognised government in Tripoli led by Prime Minister Abdulhamid Dbeibah and an eastern administration backed by military commander Khalifa Haftar.
The central bank confirmed the new budget represents the first consensus on unified spending across Libya in over 13 years, describing the development as a significant step toward fiscal consolidation. "This step reflects real progress toward unifying fiscal policy and strengthening the good management of public spending," the bank stated.
The timing of the agreement is notable given Libya's acute financial pressures. Despite generating $22 billion in oil revenues last year—a 15 percent increase year-on-year—the country faces a foreign currency deficit of $9 billion, the central bank reported. In January, the bank devalued the Libyan dinar by nearly 15 percent for the second time in less than a year, citing multiple economic challenges, including the absence of a unified state budget.
The US played a central role in facilitating the talks, with the central bank commending Washington's "positive role in supporting mediation efforts" between the competing factions. Prime Minister Dbeibah also expressed gratitude to Massad Boulos, Donald Trump's senior adviser on Arab and African affairs, for his role in pushing the negotiations to a successful conclusion. "This is a step that carries promising signs, but the true test remains the serious commitment of all parties, so that it translates into tangible results for citizens in their daily lives," Dbeibah said in a statement.
Libya holds Africa's largest proven oil reserves at approximately 48.4 billion barrels and currently produces around 1.5 million barrels per day. The government has set an ambitious target to increase output to two million barrels per day, a goal that analysts say would be easier to pursue under a unified fiscal framework that ensures consistent investment allocation across the country's hydrocarbon sector.