Unified budget deal signals shift towards financial stability in Libya

Libya has reached a landmark agreement to unify its public spending for the first time in more than a decade, in a move widely seen as a critical step towards ending financial division and restoring economic stability.

The deal, announced by Central Bank Governor Naji Issa, brings together the House of Representatives and the High Council of State around a unified national budget and a consolidated framework for public expenditure.

Speaking during the signing ceremony, Issa described the agreement as a “real expression of national will”, signalling that Libya’s rival institutions can overcome political divisions when aligned around a shared economic vision.

He said the accord would end years of fragmented and parallel spending, establishing a more disciplined and transparent financial system based on unified state expenditure.

In a statement, the Central Bank of Libya confirmed the signing of the first annex to the unified development agreement, which includes the adoption of comprehensive expenditure tables covering all four chapters of public spending.

The bank described the move as a pivotal milestone, noting that it represents the first agreement on unified spending in over 13 years. It added that the new financial framework is grounded in the state’s actual fiscal capacity, with the aim of ensuring sustainability and balanced development across all regions.

According to the bank, the agreement is expected to support efforts to stabilise the exchange rate and strengthen the Libyan dinar by improving control over public spending and reducing long-standing financial distortions.

The Central Bank also highlighted the role of coordination between Libyan stakeholders in reaching the deal, and acknowledged the contribution of international mediation efforts, including technical support from the United States.

The agreement was signed by Abduljalil Al-Shawesh, head of the Financial Committee at the High Council of State, and Issa Al-Aribi, head of the Energy Committee in the House of Representatives.

Prime Minister Abdulhamid Dbeibah welcomed the development, describing it as a turning point after years of political and financial deadlock.

He said the agreement would ensure that public spending is managed on a unified basis across the country, adding that its success would depend on full commitment from all parties involved.

“The primary beneficiary of this agreement is the Libyan citizen,” Dbeibah said, noting that effective implementation could lead to improved living standards, greater price stability and renewed strength for the national currency.

He stressed that development must extend to all regions of Libya, but within the limits of the country’s financial capacity, warning against unsustainable spending that could place additional burdens on citizens.

While describing the agreement as a positive start, Dbeibah cautioned that its true impact would be measured by tangible improvements in people’s daily lives.

He also commended the efforts of the Central Bank, representatives of both legislative bodies, and international partners who contributed to securing the agreement, including mediation led by adviser Massad Boulos.