The government led by Prime Minister Abdurahhim Al-Kib has drawn up a draft budget for 2012 of LD 68.5 billion ($55 . . .[restrict]billion).
It is the largest in Libya’s history and reflects the need to rebuild an economy and infrastructure devastated by decades of maladministration and corruption compounded by eight months of bitter fighting last year.
The budget had been “transferred to the National Transitional Council for approval,” a statement from the prime minister’s office said after it was agreed at a cabinet meeting on Wednesday.
There are no expenditure details nor a figure as to anticipated income in 2012 nor anything on the size of the deficit.
There has been disagreement about the latter. According to a statement by NTC leader Mustafa Abdul Jalil at the beginning of the month, “the budget being prepared would see a deficit of $10 billion”. However in January, Central Bank governor Saddeq Elkaber said that that the 2012 budget would have an LD 7 billion deficit.
There will clearly be a deficit. Libya’s oil revenues were $32 billion in 2010, the last full year before the revolution — $23 billion short of the 2012 expenditure figure. According to a oil ministry statement on Tuesday, liftings are now running at 1.4 million barrels a day — far higher than had been anticipated three months ago and by summer may well exceed the 1.6 m b/d that Libya was pumping before the revolution. Nonetheless, government income is not going to match the planned $55 billion budget figure.
Libya is, however, well positioned to cover any deficit, given the $100 billion in funds that were frozen abroad but most of which, according to Elkaber, have now been released.
Libyan gross domestic product fell by some 60 percent last year and the International Monetary Fund (IMF) has described that Libya’s finances as “precarious”. However GDP looks set to grow massively as exports and business comes back on-stream.