Government-by-Government Assessments: Libya

Internal political divisions continue to prevent the government from implementing regular budget processes, which adversely affected fiscal transparency and government operations.  During the reporting period, the Tripoli-based Government of National Unity (GNU) did not publish an executive budget proposal.  The GNU allocated and disbursed funds under a temporary financial arrangement absent parliamentary approval of its budget proposal, with limited oversight.  The parliament approved a budget for the so-called “Government of National Stability,” which was able to expend funds of unclear provenance without oversight and without coordination with Tripoli authorities.  An end-of-year budget execution report by the GNU was available online but lacked substantive detail.  Only limited information on debt obligations, including major state-owned enterprise debt, was publicly available.  The budget included earnings from and financial allocations to at least one major state-owned enterprise, however, budget documents otherwise lacked sufficient detail on earnings from and allocations to state-owned enterprises.  Information regarding expenditures to support executive offices was not publicly available.  The GNU does not yet prepare budget documents according to internationally accepted principles.  Although budget executions deviated significantly from budget projections, the GNU passed a supplementary budget.  Military and intelligence budgets were not subject to parliamentary or civilian public oversight.  The supreme audit institution did not meet international standards of independence and remained politically divided.  The supreme audit institution resumed publication of annual reports, which contained substantive findings, recommendation, and narratives.  The government specified in law or regulation and generally appeared to follow in practice the criteria and procedures for awarding natural resource extraction contracts and licenses.  Basic information on natural resource extraction awards was made publicly available.  The sovereign wealth fund did not disclose its source of funding or general approach to withdrawals.

Libya’s fiscal transparency would be improved by:

  • Publishing an executive budget proposal and enacted budget in a reasonable period;
  • Ensuring the end-of-year report is complete;
  • Disclosing in its budget documents information on debt obligations, including major state-owned enterprise debt;
  • Breaking down expenditures to support executive offices in the budget;
  • Subjecting military and intelligence budgets to parliamentary or civilian public oversight;
  • Preparing budget documents according to internationally accepted principles;
  • Ensuring the supreme audit institution meets international standards of independence; and
  • Ensuring the sovereign wealth fund discloses its source of funding and general approach to withdrawals.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future