On 12 March the Government of National Unity’s (GNU) Prime Minister Abdelhamid Dbeibah, directly challenged the Central Bank of Libya’s (CBL) recent report (Libya Politics & Security – 10.03.25) that painted a concerning picture of Libya’s economic health. 

On 6 March the bank had highlighted a US$2.6 billion deficit for January and February 2025 despite a surge in overall public revenue to LD18.256 billion (US$3.78 billion) compared to LD14.336 billion (US$2.97 billion) during the same period in 2024. It revealed that, while foreign currency revenue totalled US$3.6 billion for the period, expenditures and obligations surged to US$6.1 billion. The deficit has been fuelled by substantial government spending, increased imports, and the personal use of foreign currency. The CBL also raised concerns about the unsustainable demand for foreign currency and the disproportionate spending on state employee salaries. 

Dbeibah’s letter to the CBL governor Naji Issa questioned the accuracy of the bank’s  figures. He pointed out that its data failed to include LD4.4 billion (US$910 million) in revenue raised from fees imposed on the sale of foreign currency. He claimed that this omission meant there is an actual surplus.

Dbeibah also argued that linking the demand for foreign currency solely to public spending was misleading. He claimed that US$3.6 billion in forex revenues significantly outweigh the GNU’s US$1.5 billion in expenditure and that there is actually a surplus of US$2.1 billion. Dbeibah similarly highlighted the current trade deficit of around US$2.5 billion and linked it to the foreign currency being sought to exchange it for Libyan dinars thus leading to creation of huge flows of Libyan Dinar into the economy.

Dbeibah then shifted his focus to the root causes of the problem. He called for a thorough investigation into the sources of funds driving the unprecedented demand for forex in Q4 of 2024 and January-February 2025, and cited Law No. (2) of 2005 on Combating Money Laundering. He argued that simply controlling public spending would not address the fundamental issues within the banking system where rising deposit liabilities are directly linked to the money resulting from exchanging foreign currency for dinars. He insisted that the CBL had responsibility for ensuring financial balance and stability via its professional due diligence regarding the sources of forex. 

Dbeibah urged Issa to take immediate action by: guaranteeing full transparency in all financial data related to foreign currency; and, as legally required, providing the Council of Ministers with regular reports on the CBL’s assets and liabilities. He stressed that Libya is at a crucial juncture which necessitates decisive action to address these challenges. Many analysts believe that Dbeibah’s pushback against the CBL may actually herald the beginning of conflict with the bank and its governor. This is because Issa appears to be restricting the GNU’s access to funds and CBL attempts to produce a unified budget. Unless the conflict is resolved, it will exacerbate the financial instability and add to the complexities of the current political deadlock.