Dr. Osama Hamad leads investigation into the impact of public spending and unveils a reform package to strengthen financial stability and social cohesion amid an economic crisis
Soldecanarias.net / Adeje
Libyan Prime Minister Dr. Osama Hamad led a crucial meeting this Wednesday with the Governor of the Central Bank of Libya, Naji Issa, and his deputy Marai Al-Barasi, to analyze the repercussions of the current economic and financial situation in the country. Joined by senior government and economic officials, they discussed the consequences of public spending and its direct relationship with the instability of the Libyan dinar, the national currency.
The meeting focused on evaluating the impact of fiscal policies and public spending management on the country’s economy, which is marked by high inflation and growing debt. The Prime Minister emphasized the need to strengthen monetary and financial policy to restore confidence in state institutions, highlighting the Central Bank as an essential pillar in the economic reforms that Libya urgently requires.
“It is vital to coordinate efforts to consolidate a cohesive national economy, capable of facing challenges and ensuring a better future for our next generations,” declared Hamad, stressing the importance of transparency and the unification of the country’s financial institutions.
Among the announced reforms are measures such as improving national oil production, abolishing the exchange system, and creating a transparent mechanism to support the country’s power plants. Proposals were also presented to activate Law No. 13 of 2023, focused on promoting social justice and balancing the public and private sectors, as well as strengthening support for small businesses.
In response, the Governor of the Central Bank, Naji Issa, stressed that public spending is the main driver of the economic crisis. “The gap between income and expenditure is alarming, and the shortage of foreign currency is further pressuring our ability to respond,” Issa explained, also calling for a review of subsidy policies and the implementation of a cash support system instead of generalized subsidies.
The governor also warned of the depletion of the state treasury reserves and the urgent need to establish a unified budget to stabilize the country’s finances. He did, however, praise the Prime Minister’s initiatives, particularly development projects in the city of Derna, an area devastated by recent conflicts.
As Libya moves toward a period of fundamental reforms, expectations center on these measures not only halting the economic crisis but also restoring confidence in Libyan institutions, strengthening their capacity to face long-term economic and social challenges.
