Speaking at today’s live-streamed session on ‘‘Financial Rebalancing and Addressing the Foreign Exchange Deficit’’ at the 6th Banking Sector Development Forum held in Tunis from 7 to 8 December, panellists agreed that 2.4 million working in the state sector is indeed a big burden on the budget with little productivity in return.
Only the state sector can provide enough jobs in absence of the private sector
Former Central Bank of Libya Board Member and former Deputy Finance Minister, Mraja Ghaith said ‘‘2.4 million is a big number, but has the government offered alternative jobs or supported the private sector? No. Where are Libyans to go? The only jobs available are in the state sector. And I don’t blame them.’’
There are no sources of financing for the private sector
Continuing during his interjection, Ghait said ‘‘You close sources of finance without providing correct alternatives with the imposition of Law no. 1 of 2013 (which prohibited interest bearing bank loans) and tell Libyans to head to the private sector. Where is the private sector going to get financing for their projects?
Law no. 1 of 2013 is impeding the growth of the private sector
‘‘Which bank will give loans free of profit? Even the Islamic banks want their profit. Don’t close the door in peoples face and say 2.4 million is too many. They have a right to the wealth of this country. Its theirs and not the state’s. As long as this law (Law no. 1 of 2013) is in place, people will head to the state sector for employment’’.
No unified government, no change of system
‘‘The problem is that we changed the regime in Libya (through the 2011 revolution that overthrew the 42-year-old Qaddafi regime) without changing the system. The (inherited) system needs to be changed. We must open up to the world. As long as there is no political will and a unified government there will be no change to the system.
Introducing Islamic banking overnight stopped the Libyan economy completely. Islamic banking is barely standing on its feet in Libya. Banks are not ready for it’’.
No reform without political will and without a unified government
‘‘There can be no reform without political will which will only come through a unified government. Otherwise, both sides will exploit issues politically in their favour. They can only take strategic decisions if there is a unified government to implement a decision’’.
Law 35 / 2023 was passed to allow for parallel non-Islamic banking
Even though law 35 / 2023 was then passed to allow banks to offer both Islamic and non-Islamic loans, the weakness of the two governments means they do not have the political strength to implement some laws – such as law 35 / 2023’’ (as in the Tripoli based Libyan government fearing a public backlash from Islamists and the Grand Mufti).
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The 6th Banking Sector Development Forum will be held in Tunis from 7 to 8 December
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4th Banking Sector Development Forum to be held in Tripoli in October 2022 (libyaherald.com)
Annual Libyan Banking Sector Development Forum to be held in Tunis (libyaherald.com)
Second Libyan banking forum to be held in Benghazi (libyaherald.com)
