Libya’s 2019 Budget: Fact or Fiction?

Libya’s ‘government’ has finally agreed a budget. Planned oil revenues are puzzlingly conservative while a third of revenue is accounted for by a dubious foreign exchange ‘tax’. Capital spending at LD7bn is a pittance relative to what needs to be spent on rebuilding the war-torn country. And Tripoli is unlikely to be able to spend even that.

Three months late, Libya’s Tripoli-based government finally has a budget. The UN-backed Government of National Accord (GNA) plans a balanced budget of LD46.8bn ($33.4bn at the official rate of $1=LD1.39). This implies a 19% rise in spending on 2018’s LD39.3bn ($28.9bn), according to the full 2019 budget obtained by MEES.

Almost all revenues in Libya are accrued from oil and gas sales, and this hasn’t changed since the country started exporting oil in 1961. But planned oil and gas revenues of LD26.4bn ($19bn) for 2019 are suspiciously down 21% on 2018’s five-year high LD33.5bn ($24.5bn; MEES, 25 January 2019 ).

With the 4 March restart of the country’s 315,000 b/d El Sharara field ( MEES, 8 March 2019 ), overall output has steadily risen to 1.2mn b/d, in line with levels before armed protests took the key Sharara field offline in early December. If National Oil Corporation (NOC) can somehow sustain this until the end of the year, it could clock crude exports of over 1mn b/d for 2019 – a six year high. And with futures markets indicating $65/B until the end of December oil revenues could come in at a healthy $25bn (LD34.6bn). And that doesn’t include revenue from Libya’s gas exports to Italy (4.5bcm for 2018). (CONTINUED - 1364 WORDS)

DATA INSIDE THIS ARTICLE

table 1: Libya Public Finances* (Ld Bn)
chart Allocated Spending by Institution (LD BN)*
table 2: Libya 2019 Budget In Detail (Ld Bn)