During the First Ordinary Cabinet Meeting for 2025 held yesterday in Tripoli at the Victory Forest Halls Complex (Rixos Complex), Tripoli based Libyan Prime Minister, Abdel Hamid Aldabaiba embarked on a passionate defence of his government and its spending.
The PM was annoyed by the general accusations that his government’s poor governance of the economy, including its perceived corruption, were part of the cause of the latest devaluation of the Libyan dinar.
Aldabaiba, live on Libyan TV, shifted the blame on the Central Bank of Libya (CBL), the Attorney General and the unaccountable eastern based Libyan government and House of Representatives (HoR) Speaker Ageela Saleh.
Here is a summary of the 1 hour and 26-minute televised meeting:
- The CBL recognising the LD 59 billion of parallel spending (outside the official budget) by the eastern based Libyan government is a first step toward reform. The Central Bank of Libya acknowledged its existence and value for the first time. I warned early on about parallel spending at the end of 2023, and today the reality confirms this.
- The high price of the US dollar (and the devaluation of the Libyan dinar) in the black-market is caused by too much liquidity in the market. This is caused by unconstrained state spending. The top cause of this liquidity is the unaccountable LD 59 billion in the east which goes straight to purchasing dollars.
- The reasons for my problem with the former CBL Governor are how sums were spent by eastern Libya in parallel without knowing how they were spent.
- The CBL and its current Board must fix this problem to defend the Libyan dinar and so the price of the dollar and its demand and supply normalises, and citizens can afford it.
- The CBL should stop paying HoR Speaker Ageela Saleh based on simply his signature. The rest of the HoR are not approving this spending. I hold them responsible too. I call on Saleh to stop this spending.
- Libya inherited a deficit from the Thinni government. It took us all these years to clear it. We don’t want a new deficit. The CBL should not allow the east to incur another deficit.
- Whereas the Tripoli based Minister of Education has been sentenced to prison (but has not been imprisoned) for a delay in procuring schoolbooks, the Attorney General has not acted equally against those who have spent the LD 59 billion. Why?
- The education minister has Ministerial Immunity, and I could have used it, but I withheld from using it so that it does not look as if we are defending him.
- The Tripoli based government has not incurred any public debt throughout its tenure. The Public Budget belongs to the entire state, not just the Tripoli based government.
- The Tripoli government is responsible for only 10 percent of the LD 123 billion state budget, and its spending is conducted under strict oversight and without new debt.
- To those who say the (LD 67 billion) state-sector salaries section of the budget is too large and should be cut: I say it cannot be cut and must be endured because many Libyans have no money to spend except their salary. Only with the coming stability and avoidance of wars will it be possible to adopt a private sector capable of creating job opportunities so that workers can move from the public sector to the private sector.
- But meanwhile, in this period, this number must be endured, and even the increases that we increased in salaries are not random increases, but were due to changing the exchange rate, and the amount of 67 billion out of 123 billion is the right of Libyans, and I am obliged to deliver to anyone anywhere in Libya their salary to where they live.
- The salary is the right of citizens to ensure their livelihood, but those who hypothesise on televisions and say the salaries sector of the budget is too high should come and sit in my place and confront the people who want to eat and drink from this item. There is no hypothesising or courtesy on the issue and there is not even the possibility that I can scrape some (money off the section to spend elsewhere).
- The bill for diplomatic missions is too high and there is a process to recall staff – but it represents nothing in government spending and its effect on the high price of the dollar.
- Subsidies: I cannot on my own reform subsidies, especially fuel subsidies. Every time we try to reform subsidies we get opposition.
- The development/projects budget has not yet been disbursed, and implementation will begin in 2025.
- I am all for spending on development projects, but this must be done through planning and oversight procedures. Authorities are required to provide transparency regarding project details. All my government spending goes through all the oversight agencies, including the Audit Bureau and the Administrative Control Authority (implying that the eastern government has had no such restraints on spending its LD 59 billion).
- Aldabaiba said he will send a letter to those leading the crisis (the CBL, Saleh and the Hafters) who he said are not only fighting the Tripoli government but also threatening the state and the stability of citizens.
- He said those calling for demonstrations and civil disobedience action are the corrupt who want no oversight and want unconstrained access to hard currency to open fake Letters of Credit and import undervalued goods to smuggle hard currency abroad.
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