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Libya faces considerable hurdles in the drive for a more durable economic recovery following the resumption of oil production and exports. The countrys political leaders must address three short-term challenges in the policy agenda. First, the National Oil Corporation and the Central Bank of Libya must reach an urgent solution on the oil revenues held offshore at the Libya Foreign Bank. While fiscal transparency is a worthy objective, the impasse over

oil revenue deposits risks damaging government activities and fiscal operations. Second, the GNA in the west and the IG in the east must cobble together not only a unified but, more importantly, a reasonable budget for the remainder of 2021 that is consistent with the countrys development priorities and aligned with its institutional capacity. While they have struck an agreement for a unified budget for January-February 2021, they have left budget unification plans for the remainder of the year in limbo. Third, the competing branches of the Central Bank of Libya should advance the second generation of monetary reforms after the devaluation of the official rate in January. The next items on the agenda are the unification of the two branches of the central bank; the integration of the payments systems in the west and the east, and the resolution of liquidity problems both in the banking system and in the wider economy.

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Libya Economic Monitor - Spring 2021 - worldbank.org