TRIPOLI: Libya has put some government departments under special spending rules as a slump in oil revenue has hampered drafting a budget for this year, officials and experts said, highlighting the dire situation of its public finances.
A wave of protests at oilfields and ports have knocked oil production down to 230,000 barrels per day (bpd) from 1.4 million bpd in summer, which has hit public finances as oil exports are the sole foreign currency earner.
Western powers worry Libya could slide into instability as militias who helped topple Muammar Gaddafi in 2011 keep their guns to seize oilfields or ministries at will to make political and financial demands. Some ministries have started to struggle to pay their bills as parliament has not yet approved a budget for 2014, a government minister said on Sunday. These have been now put under a special budget procedure called 1/12 which allows them to continue spending one month at a time, the government said.
Under this rule the ministries get a sum based on last year’s average monthly spending to keep basic services running, said Abdelsalam Ansiya, who until this month headed parliament’s financial committee.
But he said even this approach was problematic because there was no budget approved to back up the payments. The government will also fund such spending with money originally earmarked for infrastructure projects. “So a project will stop because of the limits of funding available,” he said.Reuters
